This chapter presents a detailed analysis of the microeconomics of cocaine production and trafficking in Colombia. The chapter first presents a brief description of the evolution over time of the aggregate figures on the production of cocaine, then focusing on describing in detail each link in...

Using the case of the cocaine trade in Mexico as a relevant and salient example, this paper shows that scarcity leads to violence in markets without third party enforcement. We construct a model in which supply shortages increase total revenue when demand is inelastic. If property rights over...

This paper explores if scarcity increases violence in markets without a centralized authority. We construct a model in which, by raising prices and revenues, temporal supply shortages foster violence. Guided by our model, we examine empirically the link between scarcity and violence in the...

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,...

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...

We model the war on drugs in source countries as a conflict over scarce inputs of successive levels of the production and trafficking chain. We explicitly model the vertical structure of the drug trade as being composed of several stages, and study how different policies aimed at different...