Illicit drug market and its economic impact

The research report summarizes results of the Workstream 6 under the EU Project New methodological tools for policy and programme evaluation (JUST/2010/DPIP/AG/1410). The overall goal of the project was increased knowledge of illicit drug market from demand a supply side, behaviours of drug users, and of drug legislation in countries participating in the project, in order to produce effective global indicators to evaluate actions and policies of drug supply and drug demand reduction.

The objectives of the Workstream 6 were to provide models to estimate the impact of the illicit drug market on the economy (in particular in relation to the GDP in terms of its size). Expected results under the Workstream 6 were (i) development of methodology for estimation of drug trade from the demand side, (ii) definition and (iii) identification of suitable indicators for the estimation of drug market with the possibility to include the drug trade into the system of national accounts as a part of illegal economy, (iv) data collection of available indicators and estimation of illicit drug market in project partners countries (Czech Republic, Italy, Portugal, Spain), (v) data collection of labelled public expenditure on drug policy (divided into prevention, harm reduction, treatment, law enforcement) and (vi) estimation of non-labelled public expenditure on drug policy. Finally, economic impact of illicit drug trade on GDP was analysed, and comparison of public expenditures on drug policy with total public expenditures was performed in a time series.

Expected utilizers of the Workstream results are the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) in terms of the list of collected data; and the statistical office of the European Union (Eurostat) in terms of the financial indicators from drug market that should be included in national accounts by the national statistical offices. And of course, the results are available for other experts and policy makers for future research and decisions.

The research report is written with the use of terminology from the field of drug policy makers, same as of national accountants, so that it is comprehensive to both groups of experts.