Why we need a cost-benefit analysis part II

The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) has recently released a report 'Towards a better understanding of drug-related public expenditure' which backs up calls for a cost-benefit analysis of the current drugs laws.

Click on image to read the report

The report argues that,

'Quantifying a government’s drug-related expenditure is a first step in formulating an economic evaluation of drug policy interventions. This evaluation will provide information that can be used to determine whether or not intended outcomes have been achieved.'

The report also recognises that any form of CBA must also look at the alternatives to prohibition in order to fully evaluate the most viable options.

'Public expenditure figures are ultimately intended to enhance policymakers’ decision-making on drug policy. But decisionmakers must be very careful and refrain from taking decisions based on raw public expenditure figures without carefully trading-off the alternatives involved or without a sufficient evaluation of the possible consequences of spending choices. The simple identification of an area of low (or high) expenditure cannot in itself suggest inefficiency. An inefficient allocation of resources exists when the resources concerned could generate greater benefits if used elsewhere, but without an understanding of the benefits gained, it is not possible to assess whether expenditure in a particular area is efficient or not.'

This report is welcomed by Transform who have consistently called for a CBA (see my previous blog on why we need a cost-benefit analysis).

The new report, in conjunction with the Eurobarometer poll (blogged here) that asked young people their opinions about support for the control and regulation of drugs, suggests that within the EU and EC there is a willingness to look at alternatives to the status quo.

Unfortunately the UK goverment has repeatedly rebuffed calls for a CBA. In 2003 at a press conference, Danny asked the then drugs spokesperson at the Home Office, Bob Ainsworth MP, whether the government would support a cost benefit analysis of drug law enforcement. Quick as a flash his reply came back: "Why would we want to do that unless we were going to legalise drugs?"

Well it seems that within Europe those important questions are being asked now with a view to creating an evidence-based policy rather than one based on outdated, and irrational solutions.