Vice Policy in a Liberal Society: An Analysis of the Impasse in the War on Drugs

The liberal order rests on the assumption that individuals making their own choices about their own well-being will make better choices for themselves than the state could choose for them

Illicit Trade as a Countervailing Effect: What the FDA Would Have to Know to Evaluate Tobacco Regulations

The Family Smoking Prevention and Tobacco Control Act [P.L. 111–31] gives the US Food and Drug Administration (FDA) the authority to regulate tobacco products, including placing restrictions on product composition, sale, and distribution. A complete accounting of the costs and benefits of any tobacco regulation includes harms from possible illicit trade in tobacco products (ITTP): costs of enforcement, violence, incarceration, etc. Indeed, the law instructs the FDA to take into account the “countervailing effects” of regulation on public health, “such as the creation of a significant demand for contraband or other tobacco products that do not meet the requirements.” While the law’s narrow focus on public health may limit the scope of an inquiry by the FDA compared to a full benefit-cost analysis, aspects of ITTP such as violence and incarceration have substantial health impacts. Illicit markets in drugs such as cocaine, heroin, and methamphetamine, not to mention the grand experiment of alcohol Prohibition in the early twentieth century, illustrate the substantial risks of unwanted side effects of drug prohibition. But taxes, product limitations, access restrictions, and narrowly defined product bans constitute “lesser prohibitions,” and are subject to the same kind (if not degree) of risks. All tobacco policy-making should therefore consider ITTP. This article sets forth a research agenda for the FDA to consider in order to estimate the effects of contemplated tobacco-product regulation and ITTP. To carry out fully its legislative mandate, the FDA would have to determine the current size and impacts of ITTP, analyze how these may be expected to change under new regulations, and look for interdependencies among tobacco-product markets that may complicate single-product regulation. A more challenging element of the research agenda would be to develop a better theoretical groundwork for the prediction of the emergence, size, and side effects of illicit markets. We close with discussion of how the proposed research agenda may lead to insights into other policy areas as well

Illicit Drugs and the Terrorist Threat: Causal Links and Implications for Domestic Drug Control Policy

The international traffic in illicit drugs contributes to terrorist risk through at least five mechanisms: supplying cash, creating chaos and instability, supporting corruption, providing “cover” and sustaining common infrastructures for illicit activity, and competing for law enforcement and intelligence attention. Of these, cash and chaos are likely to be the two most important

Targeted Enforcement against Illicit Trade in Tobacco Products

Illicit trade in tobacco is a substantial and growing problem in the U.S., causing loss of tax revenue, damage to public health, and threats to public safety. Decisions about enforcement against ITTP involve tradeoffs among competing objectives. Good policy design can improve the terms of those tradeoffs but cannot eliminate them. We examine questions about the allocation of enforcement resources against ITTP, and its distribution across activities, individuals, and organizations: in particular, whether and how to differentially target ITTP that involves violence or support for terrorism. We consider the problem of developing effective strategies for enforcement, applying both lessons from experience with markets for illicit drugs and theoretical insights about enforcement targeting and dynamic concentration. We show that targeted enforcement and focused deterrence are more efficient than unfocused enforcement, and that – when other policy changes increase the potential rewards to illicit activity – enforcement resources applied earlier (before illicit markets have grown) will have greater impact than enforcement resources applied later (and therefore to larger markets). We discuss additional considerations, ranging from real-world complications left out of the simple models to examination of how insights from behavioral law and economics may modify conclusions based on a theory of deterrence designed for homo economicus