Abstract

RAFFO LOPEZ, Leonardo. DRUG TRAFFICKING AND CONFLICT: WHY HAS THE PRICE OF COCAINE DROPPED?. Rev.econ.inst. [online]. 2010, vol.12, n.23, pp.229-258. ISSN 0124-5996.

Combining the approaches of Ortiz and Mejía et al., this paper proposes a new model of drug trafficking and conflict. In a general equilibrium framework, an explanation of the downward trend in the price of cocaine over the last two decades is developed. The model shows that the main factor causing this trend is the increase in productivity in the production of cocaine, which has counterbalanced the impact of the supply-side control policies and the decrease in the number of hectares of land planted with coca.

Keywords : illegal markets; drug trafficking; economic theory of contests; illegal armed groups.

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