Daniel Mejia

Cocaine Production and Trafficking: What Do We Know?

The main purpose of this paper is to summarize the information currently available on cocaine production and trafficking. The paper starts by describing the available data on cocaine production and trade, the collection methodologies (if available) used by different sources, the main biases in the data, and the accuracy of different data sources. Next, it states some of the key empirical questions and hypotheses regarding cocaine production and trade and takes a first look at how well the data match these hypotheses. The paper states some of the main puzzles in the cocaine market and studies some of the possible explanations. These puzzles and empirical questions should guide future research on the key determinants of illicit drug production and trafficking. Finally, the paper studies the different policies that producer countries have adopted to fight against cocaine production and the role consumer countries play in the implementation of anti-drug policies.

The War on Illegal Drug Production and Trafficking: An Economic Evaluation of Plan Colombia

This paper provides a thorough economic evaluation of the anti-drug policies implemented in Colombia between 2000 and 2006 under the so-called Plan Colombia. The paper develops a game theory model of the war against illegal drugs in producer countries. We explicitly model illegal drug markets, which allows us to account for the feedback effects between policies and market outcomes that are potentially important when evaluating large scale policy interventions such as Plan Colombia. We use available data for the war on cocaine production and trafficking as well as outcomes from the cocaine markets to calibrate the parameters of the model. Using the results from the calibration we estimate important measures of the costs, effectiveness, and efficiency of the war on drugs in Colombia. Finally we carry out simulations in order to assess the impact of increases in the U.S. budget allocated to Plan Colombia, and find that a three-fold increase in the U.S. budget allocated to the war on drugs in Colombia would decrease the amount of cocaine that succesfully reaches consumer countries by about 17%.

Scarcity Without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War

This paper asks whether scarcity increases violence in markets that lack a centralized authority. We construct a model in which, by raising prices, scarcity fosters violence. Guided by our model, we examine the link between scarcity and violence in the Mexican cocaine trade. At a monthly frequency, scarcity created by cocaine seizures in Colombia—Mexico’s main cocaine supplier—increases violence in Mexico. The effects are larger in municipalities near the US, with multiple cartels, and with strong PAN support. Between 2006 and 2009 the decline in cocaine supply from Colombia could account for 10%-14% of the increase in violence in Mexico.

The Health Consequences of Aerial Spraying of Illicit Crops: The Case of Colombia

This paper exploits the variation in aerial spraying across time and space in Colombia and employs a panel of individual health records in order to study the causal effects of aerial spraying of herbicides (Glyphosate) on short term health-related outcomes. The results show that exposure to the herbicide used in aerial spraying campaigns increases the number of medical consultations related to dermatological and respiratory related illnesses and the number of miscarriages. This finding is robust to the inclusion of individual fixed effects, which compares the prevalence of these medical conditions for the same person under different levels of exposure to the herbicide used in the aerial spraying program over a period of 5 years. Also, the results are robust to controlling for the extent of coca cultivation of illicit crops in the municipality of residence.

Crime and Conspicuous Consumption

We study how property crime distorts consumption decisions. Using an incomplete information model, we argue that consuming conspicuous goods reveals information to criminals seeking bountiful victims and increases the likelihood of being victimized. Thus, property crime reduces the consumption of visible goods, even when these cannot be directly stolen but simply carry information about a potential victims wealth. We exploit the large decline in property crime in the U.S. during the 90s to test this mechanism. Using data from the U.S. Consumer Expenditure Survey from 1986 to 2003, we find that households located in states experiencing sharper reductions in property crime increased significantly their consumption of visible goods, even when these goods are not generally stolen, both in absolute terms and relative to other consumption goods. Our findings hold when we instrument the decline in property crime during the 90s using a variety of strategies.

Bushes and Bullets: Illegal Cocaine Markets and Violence in Colombia

This paper proposes a new identification strategy to estimate the causal impact of illicit drug markets on violence using a panel of Colombian municipalities covering the period 1994-2008. Using a UNODC survey of Colombian rural households involved in coca cultivation, we estimate the determinants of land suitability for coca cultivation. With these results we create a suitability index that depends on the altitude, erosion, soil aptitude, and precipitation of a municipality. Our exogenous suitability index predicts the presence of coca crops cross sectionally and its expansion between 1994-2000. We show that following an increase in the demand for Colombian cocaine, coca cultivation increases disproportionately in municipalities with a high suitability index. This provides an exogenous source of variation in the extent of coca cultivation within municipalities that we use as an instrument to uncover the causal effect of illegal cocaine markets on violence. We find that a 10% increase in the value of coca cultivation in a municipality increases homicides by about 1.25%, forced displacement by about 3%, attacks by insurgent groups by about 2%, and incidents involving the explosion of land mines by about 1%. Our evidence is consistent with the view suggesting that prohibition creates rents for suppliers in illegal markets, and these rents cause violence as different armed groups fight each other, the government and the civil population for their control and extraction.

Police Reform, Training and Crime: Experimental Evidence from Colombia's Plan Cuadrantes

The Plan Nacional de Vigilancia Comunitaria por Cuadrantes (PNVCC) is a new police patrolling program introduced in the eight major cities of Colombia in 2010 by the National Police. The strategy divides the largest cities into small geographical areas (cuadrantes), assigns six policemen to each, establishes a new patrolling protocol involving more community contact, and holds officers accountable for crime in their assigned area. The plan warranted a comprehensive training program for over 9,000 police officers aimed at improving interpersonal skills and implementation of the new patrolling protocols. By staggering the training schedule between three randomly chosen cohorts of police stations, we generate experimental variation in the exposure to training and in the effective implementation of the new police protocols induced by the Plan Cuadrantes. Comparing the 4 months immediately after training with the same months from the previous year, we find a significant reduction in several types of crime attributable to the training program, ranging from around .13 of a standard deviation for homicides to .18 of a standard deviation for brawls. These impacts are driven by very large effects in high crime areas and very small -or zero- effects in low crime neighborhoods. Once we take into account the high spatial concentration of crime, the estimated effects account for an overall reduction in the number of homicides of about 22%. We suggest that the training program affected crime by increasing the patrol police´s sense of accountability to the population and also possibly through higher police motivation. Large efficiency gains in public service provision may be attainable with relatively inexpensive interventions that bring public servants closer to their clients.

The economics of the war on illegal drug production and trafficking

We model the war on drugs in source countries as a conflict over scarce inputs in successive levels of the production and trafficking chain, and study how policies aimed at different stages affect prices and quantities in upstream and downstream markets. We use the model to study Plan Colombia, a large intervention aimed at reducing the downstream supply of cocaine by targeting illicit crops and blocking the transport of cocaine outside this source country. The model fits the main patterns found in the data, including the displacement of the drug trade to other source countries, the increase in coca crops’ productivity as a response to eradication, and the lack of apparent effects in consumer markets. We use a reasonable parametrization of our model to evaluate the cost-effectiveness of different policies implemented under Plan Colombia. We find that the marginal cost to the U.S. of reducing cocaine transacted in retail markets by one kilogram is

Is Violence against Union Members in Colombia Systematic and Targeted

940,000, if it subsidizes eradication efforts; and

The Deterrent Effect of Public Surveillance Cameras on Crime

175,000, if it subsidizes interdiction efforts in Colombia.