Thursday, 9 January 2014

What do economists think about drug policy?

Since the late 1960s, Gallup has been asking Americans whether they think marijuana should be legalized. The proportion favouring legalization has been creeping up since the early 1990s, and 2013 was the first year in which a majority of Americans (58%) favoured legalization. In this post, I examine professional economists' opinions on drug policy. I was able to find two relevant surveys. Unfortunately, neither is particularly comprehensive. The first is a survey of a random sample of 117 members of the American Economic Association, which was carried out by Mark Thornton. The second is a survey administered to the IGM Economic Experts Panel.

The main finding from the first survey is shown in the chart below. 52% of the economists surveyed supported decriminilization, while 38% opposed it. Among those who supported decriminilization, only 30% were in favour of full-scale legalization. Thornton also carried out a qualitative survey of economists who had published in the area of drug prohibition. There he documented "an even greater consensus which is critical of prohibition and supportive of policy reforms in the direction of decriminalization, and to a lesser extent, legalization."

The findings from the second survey are shown in the charts below. The economists were first asked to state their agreement with, "All else equal, making drugs illegal raises street prices for those drugs because suppliers require extra compensation for the risk of incarceration and other punishments." An overwhelming majority agreed. This is important because many addicts turn to crime primarily in order to fund their exorbitant drug habit. The economists were then asked to state their agreement with, "The Netherlands restrictions on “soft drugs” combined with a moderate tax aimed at deterring their consumption would have lower social costs than continuing to prohibit use of those drugs as in the US." Again, a large majority agreed.

Overall, economists seem to strongly support legalization of soft drugs, and are inclined toward the decriminilization of all drugs. Furthermore, those who have studied the issue in the greatest detail are the strongest advocates of decriminilization and legalization.

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