Policy Analysis
A social cost perspective in the wake of the Portuguese strategy for the fight against drugs

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Abstract

The Portuguese National Strategy for the Fight Against Drugs (NSFAD), approved in 1999, was explicitly grounded on the values of humanism and pragmatism and paved the way for the decriminalization of illicit drug use in Portugal in 2000. This paper presents an analysis of the social costs of illicit drug use in the wake of the strategy's approval. Taking into consideration health and non-health related costs, we find that that the social cost of drugs decreased by 12% in the five years following the NSFAD's approval and by a rather significant 18% in the eleven-year period following its approval. Whilst the reduction of legal system costs (possibly associated with the decriminalization of drug consumption) is clearly one of the main explanatory factors, it is not the only one. In particular, the rather significant reduction of health-related costs has also played an important role.

Introduction

In November 2000, the Portuguese Government approved the decriminalization of illicit drug possession and consumption. This has stimulated an interest, among the international community, on the Portuguese policy of drug decriminalization (e.g., Greenwald, 2009, Hughes and Stevens, 2010, Loo et al., 2002). However, there is a tendency to focus on the decriminalization of illicit drug use per se (e.g., Coelho, 2010, Greenwald, 2009), overlooking that it was part of a wider institutional framework dealing with the drug problem: the National Strategy for the Fight Against Drugs (NSFAD), approved by the Government in 1999. This strategy, which was rooted in a health-oriented rationale, paved the way for a number of policy measures that included, but were not restricted to, the decriminalization of illicit drug possession and consumption. But, as it is evident in parliamentary debates, all these measures were highly controversial regarding their expected social and economic effects.

Therefore, this paper's main objective is to provide an assessment of the social cost of illicit drug use in Portugal since the NSFAD's approval in 1999. In doing so, we follow as closely as possible Kopp and Fenoglio (2001), who analyse the social costs of drugs – taking into account health and non-health related costs, both direct and indirect, associated with illicit drugs – using the cost-of-illness approach.

It is tempting to use this type of framework to, simultaneously, carry out an impact assessment of the NSFAD.1 However, the crucial element of impact assessments is the determination of causality: to identify and test causal relationships between a given policy and all of its possible and significant consequences. Although the social cost analysis we carry out in this paper does allow for the identification and measurement (in social cost terms) of the main changes which have occurred regarding illicit drug use in Portugal since the NSFAD's approval, it is difficult to establish clear and direct causal relationships. For example, the NSFAD contains multiple policy objectives as well as multiple mechanisms in order to achieve them. Moreover, some of those mechanisms – for instance, the deployment of a national network of centres for drug addiction treatment – were implemented partly before the approval of the NSFAD in 1999, while others – such as the decriminalization of drug use in 2000 – were implemented sometime after its approval. Therefore, the evolution of social costs of illicit drug use after 1999 reflects not only various policy measures, some of which are directly associated with the NSFAD while others are not, but also other factors – economic, sociologic, demographic, etc. – which make it difficult to establish such causal relationships.

Several other authors have estimated the social cost of drugs in a variety of countries. However, as Vander Laenen, Vandam, and De Ruyver (2008) note, these estimates are not directly comparable, because they typically have different objectives, follow different methodologies and use different definitions of social costs. For instance, looking at Canada, Rehm et al. (2007) quantify the social costs of drugs, as well as of alcohol and tobacco, while Fenoglio, Parel, and Kopp (2003), making use of a social cost definition very close to the one we have used, estimate the social cost of drugs in France in 1997. Origer (2002) has quantified the social cost of drugs for Luxemburg in 1999, but focuses mainly in direct costs.

Our findings are, in our opinion, interesting and somewhat surprising. First, we observe a reduction of approximately 12% (on average) in the social cost of drugs in the 5-year period that followed the NSFAD's approval, in 1999, and a rather significant 18% (average) reduction until 2010. Second, this social cost reduction is rooted only partly on the observed reduction of the (direct and indirect) legal system costs associated with (the fewer) individuals imprisoned for drug-law offences, especially after the decriminalization of drug use. Third, another main explanatory factor for the reduction in social costs was the rather significant reduction in indirect health costs, namely the reduction of drug-related deaths. Although there has been an increase in (direct) health-related costs for drug addiction, this increase was small compared to the rather significant reduction in the remaining health-related cost categories we look at.

Following this introduction, section ‘Overview of the Portuguese drug policy’ briefly describes the NSFAD. Section ‘Methodology’ summarizes the methodology. Section ‘Research findings’ presents the main research findings, and section ‘Conclusion’ concludes. An Appendix describes in greater detail the data and the methodological assumptions underlying our results.

Section snippets

Overview of the Portuguese drug policy

The Portuguese drug policy is shaped by the ideas of pragmatism and humanism, and it has evolved towards the decriminalization of drug consumption (Agra, 2009, Dias, 2007, Poiares, 1995). But it took a long way to develop into its current state: according to Agra (2009), the trajectory of regulation on the drug problem has been marked by three stages:

  • ‘attentiveness and resistance’ (ranging from 1909 to 1970): the Portuguese drug policy resisted the prohibitionist movement led by the US and

Overview

Our primary objective is to quantify the social costs of illicit drug use since the approval of the NSFAD, in 1999. We largely follow Kopp and Fenoglio (2001) both in the definition of social costs of illicit drug use, as well as in the calculation methodology. The latter is based on the cost-of-illness approach, that is, “the social cost of illness is equivalent to the cumulative costs generated by the illness without taking account of the fact that some activities to which the illness gives

Health-related costs

As outlined in Table 1, we have looked at direct and indirect health-related costs. The majority of labelled direct costs associated with treatment, prevention and risk and harm reduction of drugs were supported, from 2003 onwards, by a single public institute – IDT – created by Decree-Law no. 269-A/2002. Therefore, we have used IDT's annual budget (from 2003 onwards) as a proxy for these direct costs. For the years 1999–2002, we have used a pseudo-IDT annual budget, collecting cost data from

Conclusion

In this paper, we have carried out an analysis of the social costs of illicit drug use in Portugal after the approval of the NSFAD in 1999, following the cost-of-illness methodology described by Kopp and Fenoglio (2001) and using, as much as possible, relevant publicly available data – even though, in several occasions, assumptions had to be made in order to obtain estimates for each and every year in the 1999–2010 period under analysis.

Our results point towards a significant (average)

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