Narcotics Policy and Enforcement Expenditures: Blog Update #1

At the time of this blog post over one week has passed since work on this project began. Predictably, much of my time has been spent reading and investigating academic literature on the subject of narcotics policy, particularly authors who account for many recent changes in international policy liberalization. My project focuses heavily on how much world governments spend and how that can be related to their choices of policy and the degree of severity that their laws contain for those who choose to participate in the black market for and consumption of illicit substances. A recent review of the LSE report on the Economics of Drug policy that had contributions and signatures from several Nobel prize-winning economists declared the importance of new research in this field. John Collins, A PhD candidate at the London School of Economics had this to say:

“A more thorough cost-benefit analysis of the merits of prohibition relative to the costs of enforcement which takes into account the cross-border spillovers [of the war on drugs] is required for a global cooperative framework. From this analysis a better appreciation of regulatory options and potential for experimentation and the readjustment of resources can be decided”

Clearly, this research project is one small part of a much larger movement that appears to be shifting toward a belief in alternative policy, or at the very least a re-evaluation of the existing status quo. This also means that, luckily for me, I’m not alone in my quest for additional research data in this field. A couple of days ago I stumbled onto a database run by a libertarian research group known as The Drug Freedom Index, which for the last several years has been scoring nations on a 10 point scale of personal liberty based on each nation’s laws towards narcotics possession and consumption. This type of data happens to be the type of ordinal independent variable that my project will be hoping to explore. I will be spending additional time investigating the integrity of this database, though it is certainly promising as a starting point for building my own dataset.

I’ve also been exploring variables to be used as controls within my regression models in order to isolate the potential associations between policy and enforcement expenditures. One variable which I postulate will be important to account for is unemployment. Because unemployment is often associated with lower earnings and potentially more crime, I hypothesize that legal enforcement expenditures will likely be associated with the unemployment rate, at least partially. As such, using data on each nation’s unemployment rate from the World Bank will be necessary and I have begun construction of the larger dataset that includes this unemployment data using an excel document that will eventually be imported to Stata. Among my other ideas for control variables is a dummy variable which will code every nation either as being “western” (or perhaps a NATO member) or “non-western” as well as GDP per capita, the poverty rate, Average years of education, and potentially usage rates per capita. Obviously the control variables will need to be examined and considered more thoroughly, but I am confident that the data for most of them will be available.

One of the most difficult portions of this project is going to entail constructing a variable that contains useful and accurate information regarding my dependent variable: national enforcement spending per capita. It will be key to find a reliable database, otherwise this type of information may be scattered and its integrity questionable. Nevertheless, I believe that it can be found and organized in my dataset. In the coming weeks I will be adding to my dataset and find as much information available for my variables. I will also continue to read academic literature on the issue and my hope is to begin testing some statistical hypotheses in Stata within 2 weeks.