The Use of Violence in Illegal Markets: Evidence from Mahogany Trade in the Brazilian Amazon

Agents operating in illegal markets cannot resort to the justice system to guarantee property rights, to enforce contracts, or to seek protection from competitors' improper behaviors. In these contexts, violence is used to enforce previous agreements and to fight for market share. This relationship plays a major role in the debate on the pernicious effects of the illegality of drug trade. This paper explores a singular episode of transition of a market from legal to illegal to provide a first piece of evidence on the causal effect of illegality on systemic violence. Brazil has historically been the main world producer of big leaf mahogany (a tropical wood). Starting in the 1990s, policies restricting extraction and trade of mahogany, culminating with prohibition, were implemented. First, we present evidence that large scale mahogany trade persisted after prohibition, through misclassification of mahogany exports as "other tropical timber species." Second, we document relative increases in violence after prohibition in areas with: (i) higher share of mahogany exports before prohibition; (ii) higher suspected illegal mahogany activity after prohibition; and (iii) natural occurrence of mahogany. We believe this is one of the first documented experiences of increase in violence following the transition of a market from legal to illegal.illegal markets, violence, homicide, mahogany, Brazil

The use of violence ini llegal markets: evidence from mahogany trade in the Brazilian Amazon

Agents operating in illegal markets cannot resort to the justice system to guarantee property rights, to enforce contracts, or to seek protection from competitors’ improper behaviors. In these contexts, violence is used to enforce previous agreements and to fight for market share. This relationship plays a major role in the debate on the pernicious effects of the illegality of drug trade. This paper explores a singular episode of transition of a market from legal to illegal to provide a first piece of evidence on the causal effect of illegality on systemic violence. Brazil has historically been the main world producer of big leaf mahogany (a tropical wood). Starting in the 1990s, policies restricting extraction and trade of mahogany, culminating with prohibition, were implemented. First, we present evidence that large scale mahogany trade persisted after prohibition, through misclassification of mahogany exports as “other tropical timber species.” Second, we document relative increases in violence after prohibition in areas with: (i) higher share of mahogany exports before prohibition; (ii) higher suspected illegal mahogany activity after prohibition; and (iii) natural occurrence of mahogany. We believe this is one of the first documented experiences of increase in violence following the transition of a market from legal to illegal.illegal markets, violence, homicide, mahogany, Brazil Jel Codes: K42, O13, O17, Q58

Drug Legalization: The Importance of Asking the Right Question Symposium on Drug Decriminalization

As a policy analysis, this article\u27s central argument is that that the costs imposed by markets in licit psychoactives are significantly greater than those imposed by drug prohibition

ALCOHOL REGULATION AND CRIME

We provide a critical review of research in economics that has examined causal relationships between alcohol use and crime. We lay out several causal pathways through which alcohol regulation and alcohol consumption may affect crime, including: direct pharmacological effects on aggression, reaction time, and motor impairment; excuse motivations; venues and social interactions; and victimization risk. We focus our review on four main types of alcohol regulations: price/tax restrictions, age-based availability restrictions, spatial availability restrictions, and temporal availability restrictions. We conclude that there is strong evidence that tax- and age-based restrictions on alcohol availability reduce crime, and we discuss implications for policy and practice.Health Economics and Policy, Public Economics,

The Price of everything The Value of Nothing: A (Truly) External Review Of BERL’s Study Of Harmful Alcohol and Drug Use

In March 2009, Business and Economic Research Limited ("BERL") published “Costs of Harmful Alcohol and Other Drug Use,” a report jointly commissioned by the Ministry of Health and ACC. BERL was asked to measure the costs of drug and alcohol abuse to New Zealand society, but not to evaluate specific interventions. BERL calculated annual social costs of alcohol and illicit drug consumption of $6.8 billion, including$4.8 billion in social costs from alcohol alone. The report was cited by Law Commission President Sir Geoffrey Palmer as evidence in support of greater regulation, gaining considerable media coverage. We find substantial flaws in BERL’s method that together account for well over 90% of BERL’s calculated costs of alcohol use. Corrected external costs of alcohol use amount to $662 million and are roughly matched by the$516 million collected in alcohol excise taxes. The BERL report is wholly inadequate for use in assisting policy development.costs and benefits of alcohol usage; alcohol policy; New Zealand; adequacy of consultancy reports

Healing a Broken System: Veterans and the War on Drugs

This report examines the plight of returning veterans who struggle with incarceration and psychological wounds of war such as addiction and post-traumatic stress disorder -- and suggests reforms that could improve the health and preserve the freedom of American soldiers returning from war zones and transitioning back to civilian life. Roughly 30 percent of veterans from Iraq and Afghanistan report symptoms of post-traumatic stress disorder (PTSD), traumatic brain injury, depression, mental illness or other cognitive disability. Left untreated, these medical conditions often contribute to substance misuse and addiction, fatal overdose, homelessness and suicide, as well as violations of the law, particularly nonviolent drug offenses. This report recommends alternatives to incarceration for nonviolent drug offenses, increased access to overdose prevention programs and medication-assisted therapy, and research evaluating innovative treatment modalities such as medical marijuana and MDMA-assisted psychotherapy

Pleasure, profit and pain: Alcohol in New Zealand and the contemporary culture of intoxication

This book details the rich, complex and often contested role of alcohol in New Zealand society. It explores the three fundamental alcohol rights that continue to fight for dominance of the national drinking culture: the rights of individual drinkers to enjoy the pleasures of alcohol, the rights of society to protect itself from the harms of alcohol, and the rights of the alcohol industry to profit from the sale of a legal commodity. Historically, most of our intoxicated drinkers were adult males and drinking was typically separated from family, food and entertainment. With the sweeping social changes of the 1960s and 1970s, women and later young people, increasingly engaged with alcohol. A growing proportion of these groups have since joined men in a culture of intoxication, or binge drinking culture as it is often termed. New Zealand is not alone however, in having a culture of intoxication, with similar alcohol consumption patterns evident in many other developed nations. This book identifies the local and the global influences that have affected New Zealand society (and much of the rest of the world) since the late 1900s and details how these influences have sustained the contemporary culture of intoxication. Finally, this book will propose that to implement effective change to our national drinking culture, the rights of the alcohol industry and of individual drinkers will need to be pulled back from the liberal excesses that the 1980s and 1990s provided. A re-balancing is required in order to strengthen and sustain society’s right to protect itself from alcohol-related harm

The development impact of the illegality of drug trade

This paper reviews the unintended consequences of the war on drugs, particularly for developing countries, and weighs them against the evidence regarding the efficacy of prohibition to curb drug use and trade. It reviews the available evidence and presents new results that indicate that prohibition has limited effects on drug prevalence and prices, most likely indicating a combination of inelastic drug demand (due to its addictive properties) and elastic supply responses (due to black markets). This should turn the focus to the unintended consequences of drug prohibition. First, the large demand for drugs, particularly in developed countries, generates the possibility of massive profits to potential drug providers. This leads to the formation of organized crime groups, which use violence and corruption as their means of survival and expansion and which, in severe cases, challenge the state and seriously compromise public stability and safety. Second, prohibition and its derived illegal market impose greater costs on farmers than on drug traffickers. In many instances, this entails the transfer of wealth from poor peasants to rich (and ruthless) traders. Third, criminalization can exacerbate the net health effects of drug use. These consequences are so pernicious that they call for a fundamental review of drug policy around the world.Health Monitoring&Evaluation,Crime and Society,Economic Theory&Research,Post Conflict Reconstruction,Markets and Market Access