Understanding drug markets and how to influence them

This paper provides a review for policy makers of what is known about the economic structure of illicit drug markets and the business operations of high level dealers operating within it. It is based on interviews with imprisoned drug traffickers and dealers in UK prisons carried out by Matrix Knowledge Group, and also owes a substantial debt to the valuable work done in this field by Peter Reuter, Jonathan Caulkins and Frederick Desroches, amongst others. The paper does not review the harms caused by law enforcement, some of which have been looked at in previous reports. It assumes that the structure of drug markets influences the primary harms arising from drug use (e.g. excess mortality and disease), the violence that is related to drug markets and the opportunity costs of people spending time and money on illicit substances. Some of these harms might be reduced by introducing alternative arrangements for the international regulation of psychoactive substances. These alternative arrangements are not reviewed here. Rather, the aim is to provide policy makers with information on drug markets as a basis for focussing enforcement resources, and devising more effective policies, to reduce the damage done by the trade in illicit drugs.