Abstract
This article presents a model for a drug law enforcement policy whose objective is harm reduction, including the net cost of law enforcement, social harm and surplus of agents. We consider a vertically organized distribution system with two levels, traffickers and retailers. The two questions concern which type of sellers have to be prosecuted and which law enforcement policy should be implemented that is, the probability of being caught and the severity of the punishment. We show that a trafficker-oriented law enforcement regime can avoid counter-productive policies. Moreover, decriminalization or depenalization is optimal under some conditions depending on the relationship between social harm and consumption.
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