Evaluating Deterrence

We have taken a mixed qualitative-quantitative approach to studying the relationship between drug enforcement operations and cocaine trafficking. The qualitative portion of the study is based on the belief that interviewing smugglers can tell us much about what factors affect their decision making process and the extent to which drug enforcement efforts play a role. To date, perceptions about deterrence have been built largely on an understanding of drug smuggling from the perspective of those charged with the task of intercepting, arresting and prosecuting smugglers. There have been notably few studies of drug smuggling and the impact of interdiction efforts from the perspective of those involved in the process themselves—drug smugglers. We interviewed a sample of high-level cocaine smugglers in federal prisons to determine how smugglers assess risk, what smugglers perceive as risk, and how these perceptions vary according to the smuggler’s role in the organization.

The first step in the quantitative analysis was to evaluate how certain types of counterdrug measures affect cocaine prices. To the extent that drug prices in the United States are affected by supply, successful interdiction operations should increase cocaine prices, at least until cocaine traffickers adapt. Accordingly, this part of the analysis evaluated how selected interdiction and other drug enforcement operations, conducted between 1991–1999, affected monthly cocaine prices (at both retail and wholesale levels). We used time-series analysis techniques to accommodate the facts that the effects of operations on prices are likely delayed and could be distributed over time (rather than happening in a single period).

Demonstrating that prices are temporarily sensitive to interdiction events is important, but that demonstration says nothing about how traffickers actually adapt to special counterdrug operations. The objective of the second part of the quantitative analysis was to determine whether or not traffickers respond to interdiction operations by altering how and where they move drugs through the transit zone and across U.S. borders. Specifically, when a special interdiction operation is focused on a specific geographic area and transportation mode for a defined period, we would expect two adjustments:

• Traffickers would reduce shipments through the targeted geographic area and by the targeted conveyance mode for the period of operation; and

• They would increase shipments through other geographic area and conveyance modes for the same period of operation.

The approach taken here is different from that taken for the price series. For the price-series, the analysis was focused on national or regional prices, so there was one observation per month. In this second part of the analysis, the focus is on geographic/conveyance mode combinations, so there are seventeen observations per month. Inferences are based on the time-series (as above) and also on the cross-section (the seventeen observations per month).

The Cocaine Threat and Evolution of Drug Trafficking Organizations

Being able to evaluate the effect of specific counterdrug efforts is particularly important given the magnitude of the drug problem. The volume of cocaine production in South American source countries was estimated at roughly 666 metric tons in 1999 (Layne, 2000). Estimates developed by Abt Associates (1999) indicate that approximately 300 metric tons of cocaine entered the U.S. in 1999, roughly 45 percent of the total production⁶. While these figures may not be precise, they provide rough gauges against which the magnitude of cocaine importation can be understood. (Appendix A presents an analysis of cocaine flow.)

Trafficking behavior and cocaine prices are influenced by many factors, not the least of which are the nature and roles of the various drug trafficking organizations. For many years, Colombian organizations dominated the cocaine industry—from production to transportation to distribution. Over the past decade, however, this monopoly crumbled as non-Colombian organizations, particularly Mexican, challenged the stranglehold Colombia once had on the industry. The incarceration of the Cali Cartel kingpins in 1995 and 1996 has further increased the influence of the Mexican drug trafficking organizations on U.S. markets and enabled less established trafficking groups in Colombia to assume a greater role. (Appendix B provides detailed information about the history of drug smuggling organizations.) It is interesting to note that much of these changing dynamics appear to be attributable to drug enforcement. One wonders, for example, if Mexican organizations would be as powerful as they are today had Colombian organizations not been denied access to more direct transportation routes and forced to turn to routes through Mexico. Given the effect that the dismantlement of the Cali Cartel had on the drug industry, one must also consider the impact of investigative efforts as well.

Accordingly, one of the dilemmas in deterrence research is that it poses the question, "What would have happened if some interdiction activity was not present?" Measuring what would have happened in the absence of some intervention is difficult. It is useful to think of the deterrence that results from interdiction as operating on a continuum. At one end of the continuum, is the level of smuggling in the absence of any interdiction effort. Here drug smugglers would be free to move their supplies with impunity. The other end of the continuum would be perfect deterrence, in which the level and sophistication of interdiction efforts would successfully deter all efforts to bring drugs into the U.S. Such a system would have to combine the certainty of detection and arrest with certainty of conviction and appropriately severe penalties to deter all smuggling activities. Implicit in such a calculus is the notion that these costs would exceed the hypothesized benefits of smuggling (cash, thrills, relationships, etc.) by such a level as to prevent anyone from smuggling.

Of course we know that perfect deterrence does not exist. The presence of strong demand for drugs in the United States and the high margin of profit create powerful incentives for smuggling. Deterrence operates to stop some fraction of the drugs that begin on a smuggling venture into the U.S. The questions that arise include which aspects of the deterrent effort are most effective and what steps do smugglers take to reduce the risk of losing their payload, being captured, and being punished? It is to those questions that the current study is devoted.

There is strong evidence that deterrence can be measured (Appendix C presents an overview of prior research) and that some level of deterrence of drug smuggling exists. In this paper we will show how specific drug enforcement operations undertaken between 1991 to 1999 impacted cocaine prices (both retail and wholesale) and trafficker behavior. This analysis can provide the basis for an on-going replicable effort aimed at measuring the impact of drug enforcement operations on the larger cocaine smuggling system.

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