The fiscal expenditure of the war against possessors of illicit drugs: an approximation for Colombia

Around the world, governments spend enormous amounts of public funds in controlling possession, manufacturing and trafficking of illicit drugs. These costs are usually difficult to observe, as they correspond to the opportunity cost of many bureaucrats involved in the process. In this paper, we estimate the expected cost per arrest for possession, manufacturing or trafficking of illicit drugs for the case of Colombia. We find that the expected cost of an arrest is roughly COP$11 million, hence the expected total cost associated with the 984,106 arrests carried out between 2001 and 2015 adds up to COP$10.6 billion. Also, we analyse whether these expenditures are justified by the control of international drug trafficking, crime associated with drug dealing in local markets or drug abuse deterrence. We conclude that none of these reasons justify such fiscal expenditures; rather, these seem to be explained by an issue of incentive compatibility in Colombian authorities