Drug Policy

Unreal Numbers

Drug abuse cost estimates


When surveys indicate that drug use is steady or falling, bureaucrats and politicians trying to shore up support for the war on drugs can turn to another set of numbers: According to analyses commissioned by the federal government, "the economic costs of drug abuse" rose from $102 billion in 1992 to $143 billion in 1998. In a new Drug Policy Alliance report (available at drugpolicyalliance.org), Boston University economist Jeffrey Miron takes these numbers apart and explains why they do not constitute an argument for prohibition.

To begin with, many of the costs the government attributes to drug use—such as spending on law enforcement, productivity losses due to incarceration, and HIV-related health care expenses—are due wholly or partly to prohibition. Miron, author of the forthcoming book Drug War Crimes: The Consequences of Prohibition (Independent Institute), argues that "at least $93.1 billion should be entirely eliminated from the economic cost of drug abuse, and another $50.4 billion should be at least partially eliminated." In other words, prohibition-related costs represent more than two-thirds of the burden that drug warriors cite to justify prohibition.

Another problem with the government's numbers is the failure to distinguish between costs borne by drug users themselves and costs borne by others. "From the perspective of policy evaluation," Miron writes, "only the external costs matter." He also notes that people deterred from using illegal drugs may spend their money in ways that are equally damaging and that associations between drug use and criminality, poor health, or low productivity do not necessarily signify cause-and-effect relationships.

More fundamentally, Miron points out that calculations like these "say nothing about whether prohibition is a good policy" because they do not compare its costs and benefits to those of an alternative approach. They do not even tell us whether the costs of drug use are lower than they would be without prohibition. While the drug laws may reduce overall use of banned intoxicants, they also make drug use more dangerous—for example, by exposing users to the risks of arrest and black-market violence, encouraging drug injection and needle sharing, and making drug quality and dosage unpredictable. The upshot, Miron notes, is that "prohibition potentially increases total harm even while reducing drug consumption."