Violence, Decriminalization, and Legalization

The states and countries that have decriminalized drug use have nevertheless maintained criminal penalties against production, transportation, and sale. In econo-speak, they have legalized the demand side but not the supply side.

To economists, this is exactly backwards. The negatives of drugs do not come from growing the pre-cursor plants or selling the finished products; they come from use. Legalizing possession only, moreover, does not eliminate the black market and therefore does not reduce violence in the drug trade. 

So, if policy intervenes in drug markets at all, the right approach is penalties for use (e.g, a sin tax) but legal production and sale (i.e., the alcohol/tobacco model).

Mexico’s recent history is consistent with this perspective.   Mexico decriminalized marijuana, cocaine, heroin, LSD, and methamphetamine in August, 2009, yet drug violence continues apace.

Many decriminalizations are associated with low violence, but that is becasue the societies that decriminalize are typically using it as a political cover for de facto legalization (e.g., Portugal). Production and sale remain illegal, but since law enforcement does little to perturb the underground market, traffickers have less need for violence.

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