The production, distribution, and consumption of drugs has long been seen as a threat to social and economic development. On the other hand, conditions of unemployment and poverty foster expansion of illegal drug markets. In this study, I offer a nuanced view of the drugs/development connection...

This paper presents a general equilibrium model for the production, trafficking, and consumption of illegal drugs which endogenously determines relative prices and quantities. The model is calibrated to characterize the market for cocaine and is used to analyze the effects of three types of...