The War on Drugs and Violence in Latin America: Time to Hit Reset
Note: This article is featured in the Kennedy School Review’s 2022 print journal.
The War on Drugs and Violence in Latin America: Time to Hit Reset
Latin America is the most violent region in the world, with only 8 percent of the global population accounting for 38 percent of the global share of murder. That is 140,000 homicides per year, more than have been lost in wars around the world in almost all of the years this century. This intense violence is intimately related to drug-trafficking organizations (DTOs).
Different drugs constitute the market of illegal drugs being manufactured and distributed around the world—cocaine and heroin representing around 66 percent of the market, with annual sales of around $240 billion. Based on acres dedicated for cultivation, less than 26 percent of opium is produced in Latin America, leaving cocaine as the main drug to be taken into account for drug-trafficking-related violence and policy review considerations in the region.
The way the use of (some) harmful drugs is kept from increasing is what we call The War on Drugs, a set of policies spearheaded by the United States of America, intended to minimize their distribution and consumption. Fifty years after this approach was first implemented, and in light of the evidence and addressing various dimensions of this issue, this article aims to reflect on whether this approach is working and how we could deal with this problem more effectively.
The War on Drugs: Origins and Fundamental Mechanics
In 1971, President Richard Nixon officially declared the War on Drugs, though the real drivers behind this are not exactly clear as of today. Nixon’s domestic policy chief, John Ehrlichman, has been quoted as saying:
“We knew we couldn’t make it illegal to be either against the war or Black, but by getting the public to associate the hippies with marijuana and Blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course, we did.”
During the Reagan administration, “possession of five grams of crack led to an automatic five-year sentence while it took the possession of 500 grams of powder cocaine to trigger that sentence. Since approximately 80% of crack users were African American, mandatory minimums led to an unequal increase of incarceration rates for nonviolent black drug offenders and claims that the War on Drugs was a racist institution.”
Whatever the original ends of this policy were, history suggests that the way this approach was conceived and implemented didn’t respond only to public health motivations but to a group of other external factors—particularly those related to politics.
One of the main components of the War on Drugs is the enforcement against supply. The rationale and mechanics are simple: the illegal drug market is a business rooted in risk. The higher the risk of participating, the higher the risk premium drug cartels will incorporate in prices. This way, penalizing drug trafficking makes this business riskier, driving prices up and consumption down.
Since this war was officially declared, most of us alive today grew up under the strong paradigm that because some drugs are harmful, the best public policy is to make them illegal. However, because of significant negative externalities arising from penalization that we will review in the next section, this logically flawed reasoning has resulted in a deeply held anchor about the way we think we should address this problem, which is not supported by evidence but has not been seriously questioned or reviewed by policy decisionmakers. It is the objective of this article to leave this anchoring bias aside and review some telling available evidence to challenge this conception, exploring new approaches from which we could more effectively address this problem.
Good intentions, terrible outcomes: Why a drug policy paradigm shift is urgent
Reason #1: Counterintuitively, drug law enforcement boosts drug revenue
An extensive amount of research indicates that the demand for illegal drugs is solidly inelastic. An example of this is a literature survey that found that 1 percent increase in the price of cocaine leads to a consumption reduction within the range of 0.51-0.73 percent. This is a key premise that significantly affects the outcomes of the War on Drugs, and one of the main reasons why it has failed.
Demand being inelastic means that driving prices up through law enforcement drives consumption down, but proportionally less than the price increase. Thus, enforcement efforts directed against suppliers to increase the risk of the business and drive prices up actually help them earn higher revenue. This, in turn, means more resources are available for them to spend on countering drug trafficking enforcement, as explained by Nobel Prize-awarded economist Gary Becker in his famous work The Market for Illegal Goods: The Case of Drugs.
In other words, cartels either make more profits and increase their power as a result of law enforcement or, if needed, spend the extra revenues on efforts to counter it, such as salaries for “thugs who guard shipments and shoot anyone in the way, bribes to officials on both sides of the border, and pay and equipment for more thugs who are assigned to inter-gang warfare, with innocent victims caught in the crossfire,” which is even worse. Either way, the overall size of the organized crime machinery, the power of drug-related organized crime, and the resulting violence increase.
This is a self-defeating strategy—the same way alcohol prohibition was during the 1920s, thanks to which some of the most prominent crime organizations in the US were born. For example, by 1929, the organization led by Al Capone derived more than 60 percent of its income on illegal alcohol trafficking.,
Reason #2: Taking down cartel leaders drives competition for power, which unleashes the worst spikes in homicides
An essential part of the strategy of the War on Drugs has focused on the beheading of big criminal organizations (i.e., capturing their leader). The first reason for this is to take power away from them by making their own internal organization more difficult as they face a lack of a leader. The second is to show exemplary measures and make the career of warlords visibly less attractive.
However, evidence has shown a substantially harmful effect of this strategy. Whenever any of these organizations is beheaded, violence (i.e., homicide rates) peaks significantly, affecting hundreds of thousands of innocent people on the way.
This issue is further examined by Gabriela Calderón et al. in their work The Beheading of Criminal Organizations and the Dynamics of Violence in Mexico. In the study, the authors show that captures or killings of drug cartel leaders increase both DTO-related homicides and homicides that affect the general population, the latter being more enduring.
The evidence they show is daunting: between 2006 and 2012, when a governmental high-leadership crackdown strategy was implemented in Mexico, 25 capos (i.e., top ranks) and 160 DTO lieutenants (i.e., middle ranks) were captured or killed, but at the same time drug-related violence escalated by almost 300 percent. Violence not only increased in the treated municipalities but also in the neighboring ones.
The prospect of violence escalation as a result of combating drug-trafficking organizations has made it common to see entire regions in Latin America where there is a de facto acceptance of defeat: the state has no choice but to subdue its power and the rule of law to DTOs, who even impose their own taxes. The state doesn’t have the monopoly of the use of force to guarantee basic rights anymore. This weakens its authority in areas different than drugs as well; the general population can see that it is possible to openly and shamelessly break the law and get away with it. Again, in this particular strategy, the medicine seems worse than the disease itself.
Reason #3: In practice, this is a form of civil war that corrupts and destroys democracy
We can also see how these dynamics destroy the practice of democracy itself. As Andreas Schedler puts it in his study The Criminal Subversion of Mexican Democracy, “When confrontations between armed groups within a state cause more than a thousand ‘battle-related deaths per year, academics speak of ‘civil war.’” This way, certain areas in Latin America have been, in practice, in a form of civil war throughout the years. As the author describes, this not only means that there is the violence coming from DTOs against the state and the civil society—seeking profit from everything they can to support their activities, from kidnapping to human trafficking—but also from the state itself which, in a state of pseudo-war, commits notorious human rights abuses.
Since drugs are illegal, big-time suppliers already face decades in prison if caught, so they have little incentive to avoid committing other crimes that allow them to protect their tremendous wealth and themselves from going to jail. As Schedler points out, DTOs push for distortions to democracy in which their wealth sustains their violence, which in turn sustains their wealth. They shape politics to make their most suitable candidates win. For them, “the best candidates are those who offer the prospect of discriminatory law enforcement, tolerating the group while combating its competitors. Naturally, the best candidates for one criminal group are the worst for its adversaries. Criminal competition is thus likely to translate into the political competition.”
The author describes six different ways in which drug cartels undermine electoral competition and democracy as a whole: fielding friendly candidates, driving candidates out of politics through intimidation and violence, silencing candidates without criminal ties through intimidation (setting their agenda), deterring voters from participation and/or intimidating them to vote for a specific candidate, removing certain policy areas from the effective decision-making power of already elected authorities, and preventing winners from taking office or dislodging elected officials from office.
The War on Drugs: Two alternatives at a glance
Even though the aim of this article is to spark a productive discussion rather than to offer a definitive solution, we will broadly review two potential alternatives to the status quo at a high level. Their serious consideration, research, and public discussion are critical work to be done in light of 50 years of a drug policy that has had questionable effects on consumption but nevertheless has boosted unfair violence against innocent people.
The first, still in the early phases of public discussion, implies shifting the current paradigm around harmful drug use from criminalization and punishment to a public health one, implementing reforms in which some drugs are legalized—most notably cocaine, considering its illegal market size—and instilling a package of measures oriented toward prevention and education. This would also entail a cultural and media prevention strategy that treats users as people who need help instead of glorifying drug use. These accompanying measures could critically differentiate success from failure. As a reference, even though tobacco is a highly addictive substance, an effective preventive campaign has driven its use among youth in the US to less than one-fourth of its level in 1997.
Legalizing drugs such as cocaine would dismantle the tremendous business over which DTOs carry out their illegal trafficking activities, which powers others, such as kidnapping, arms, and human trafficking, and bribing. Such is the approach that Nobel Laureate economist Gary Becker advocates for, arguing that “taxes have a major advantage over quantity reductions when either demand for or supply of the product being taxed is not very elastic.” A number of studies from different disciplines, ranging from sociology to medicine, share a similar position on this issue on the grounds of additional arguments, such as the prevention of infectious disease.
A second and less controversial alternative—which could be implemented independently or in addition to the first strategy, though it is still to be reviewed in terms of cost feasibility—is to orient law enforcement toward demand. For example, this can include minimizing the market size of illegal drugs via lower willingness to pay per unit per person or via fewer people who are willing to use drugs at all. This could also turn demand for drugs into an elastic one, causing revenue to shrink rather than go up due to law enforcement against cartels.
This would be done in a way that does not put users into jail with a mix of non-incarcerating penalization measures, such as carrying out community work for several weeks or months—a common sentence for other misdemeanors—in addition to strong education and prevention measures. This is a more conservative alternative but probably a less effective one in terms of violence reduction.
A final note: The urgency for US leadership
A serious reassessment of drug policy cannot be undertaken by any country unilaterally. Even though several high-profile political leaders have manifested the need for fundamental change, the reality is that, except for the US, countries in the Americas don’t have the political power to start this change. The first reason for this is the fear of their political relations with the US suffering as a result; there is a chance of being penalized on the way, depending on who is occupying the US’s highest seat. The second is that the US is the biggest funder of the global illegal drug market and all of its negative externalities we just described.
If the US government leads this change with the same proactiveness it spearheaded the implementation of the current failed War on Drugs, a brighter future can await, especially for the millions of innocent victims of violence who have nothing to do with drugs and are unfairly affected by such a large social problem being addressed from a wrong policy approach year after year.
“Shining Light on Latin America’s Homicide Epidemic,” The Economist, 5 April 2018, https://www.economist.com/briefing/2018/04/05/shining-light-on-latin-americas-homicide-epidemic.
 Deborah J. Yashar, Homicidal Ecologies Illicit Economies and Complicit States in Latin America (Cambridge: Cambridge University Press, 2018).
 Estimate based on figures from Worldometer.
 Estimate based on figures from Statista.
 Alex Lockie, “Top Nixon adviser reveals the racist reason he started the ‘war on drugs’ decades ago”, Business Insider, 31 July 2019, https://www.businessinsider.com/nixon-adviser-ehrlichman-anti-left-anti-black-war-on-drugs-2019-7.
 “War on Drugs | United States History,” Encyclopædia Britannica, https://www.britannica.com/topic/war-on-drugs.
Charles Manski et al., Assessment of Two Cost-Effectiveness Studies on Cocaine Control Policy (Washington, DC: National Academies Press, 1999).
 Manski et al., Cocaine Control Policy.
 Gary S. Becker, Kevin M. Murphy, and Michael Grossman, “The Market for Illegal Goods: The Case of Drugs,” Journal of Political Economy 114, no. 1 (2006): 38–60.
 Ed Dolan, “Why It’s Obvious We Are Losing the War on Drugs,” Business Insider, 31 March 2011, https://www.businessinsider.com/econ-101-hayek-and-why-we-are-losing-the-war-against-drugs-2011-3.
 Source: FBI History website.
 Estimate based on figures from “Al Capone,” HISTORY, 14 October 2009, updated 26 April 2021, https://www.history.com/topics/crime/al-capone.
 Gabriela Calderón et al., “The Beheading of Criminal Organizations and the Dynamics of Violence in Mexico.” Journal of Conflict Resolution 59, no. 8 (2015): 1455–85.
 Andreas Schedler, “The Criminal Subversion of Mexican Democracy,” Journal of Democracy 25, no. 1 (2014): 5–18.
 Schedler, “Criminal Subversion.”
 “Overall Tobacco Trends,” American Lung Association, https://www.lung.org/research/trends-in-lung-disease/tobacco-trends-brief/overall-tobacco-trends.
 Becker, Murphy, and Grossman, “The Market for Illegal Goods.”
 Moises Naim, “Wasted,” Foreign Policy, 30 September 2009, https://foreignpolicy.com/2009/09/30/wasted/.
Pedro Ossa Guzmán is an MPA/MBA candidate at the Harvard Kennedy School and The Wharton School at the University of Pennsylvania. He is a former consultant for both NGOs and for-profit organizations across continents and a technology entrepreneur. He has also worked in homelessness, student politics and educational justice in Latin America. His primary interests are in violence mitigation and the influence of illegal drug markets policy in this region.