Portuguese Discoveries: The Costs and Benefits of Drug Decriminalization V 541

Transcription

1 Portuguese Discoveries: The Costs and Benefits of Drug Decriminalization V 541

2 Abstract Portugal, despite its nature as a small, conservative, Catholic nation, is at the forefront of the liberalization of drug policy, having fully decriminalized the purchase, possession, and consumption of all drugs in Under Law 30/2000, drug violations are dealt with by Commissions for Dissuasions of Drug Addiction, housed in the Ministry of Health, a fitting location as the reform is considered to be a public health initiative to better the Portuguese citizens overall quality of life. As the first nation to so dramatically alter its narcotics policy, it is important to examine the Portuguese case to begin to understand the costs and benefits associated with decriminalization. This paper will examine Portuguese decriminalization using cost-benefit analysis. The appropriate baseline, accounting domain, and stakeholders are identified to illustrate the scope of the reform. As little research and data are currently available on the monetary costs and benefits of decriminalization, this study will instead explore the reform s positive and negative outputs and inputs. Initial data suggests significant administrative costs for the Public Stakeholders, and without further monetary data, it is not yet clear benefits of decriminalization will outweigh the costs and produce a positive net present value. Even without a complete Kaldor-Hicks Tableau, the cost-benefit analysis is useful when comparing the current situation against the original Portuguese baseline. If successful against the baseline, Portugal s experiment should serve to guide other nations attempting to liberalize their own drug policy.

3 Table of Contents 1. Introduction 1 2. Background a. Introducing Portugal 2 b. Drafting Reform... 3 c. Legal Language Accounting Domain, Baseline, and Major Stakeholders 5 4. Inputs a. Administrative Services.. 6 b. Treatment and Educational Programs Outputs a. Legal Savings.. 9 b. Social and Medical Savings c. Quality of Life Benefits, Costs, and Transfers a. General Benefits. 11 b. Public Expenditure Costs Conclusion Appendix Works Cited 17

4 Introduction In recent years, proposed and approved laws liberalizing drug policies have made international news. In 2012, voters in Colorado and Washington state made United States history by legalizing adult recreational marijuana use. 1 Mexican lawmakers in the national legislature and Mexico City s Legislative Assembly introduced twin bills in February 2014 that proposed comprehensive changes to the nation s drug possession and marijuana laws. 2 Yet, neither of these countries is at the forefront of the liberalization of drug policy. That distinction goes to Portugal, which decriminalized the purchase, possession, and consumption of all drugs in Now, nearly 13 years after complete decriminalization, the Portuguese case is beginning to offer some data that can provide the base for an ex post analysis of the costs and benefits of liberalizing drug policy. Those against reform claim that drug use will grow exponentially while those in favor of reform claim that reductions in the cost of police and medical services will outweigh negative costs. As more nations re-evaluate their own policies of zero-tolerance and face growing pressure from both sides, it is even more important to understand the true costs and benefits of Portugal s experiment. This study will examine the development, implementation, and execution of Portugal s reform. The policy s accounting domain and baseline must be established first in order to better illustrate the scope and alternatives. Major stakeholders will be 1 Valerie Richardson, Colorado, Washington Legalize Pot for Adult Recreational Use, The Washington Times, November 6, 2012, accessed February 15, 2014, 2 Thursday: Mexico to Introduce Series of Sweeping Drug Policy Reform Bills, Drug Policy Alliance, February 13, 2014, accessed February 15, 2014, 1

5 identified along with the inputs and outputs required from each group. Recent studies provide some data on the actual monetary costs and benefits of decriminalization, but at the moment, there is not enough data to fully monetize all costs and benefits. A Kaldor- Hicks Tableau is used to succinctly present the distribution of known costs and benefits across all stakeholders. The current lack of monetary data prevents the completion of the Tableau, and while a net present value cannot be calculated, certain conclusions can be drawn from comparing the policy s output with the baseline. Background Introducing Portugal Portugal, a small, Catholic, conservative nation on the periphery of Western Europe would seem like an unlikely country to first implement comprehensive drug reform. Portugal s experiences under the authoritarian Salazar regime and the African colonial wars offer insight into the origins and motivations behind this progressive, liberal policy. Salazar s Estado Novo, which ruled Portugal from 1933 to 1974, closed the nation to the progressive reforms occurring in other western nations. The 1960s counterculture movements that celebrated drug use and experimentation did not exist in Portugal. 3 Drug use first became a noticeable issue in the 1970s, a decade of immense Portuguese societal and political change. From 1961 to 1974, Portugal fought repressive colonial wars in Angola, Mozambique, and Guinea-Bissau. Portuguese soldiers and citizens returning to Europe from the conflict brought cannabis with them as it was openly grown and used in the colonies. In response, the regime drafted Portugal s first drug policy to regulate the production, traffic, and use of narcotics and stressed the 3 Artur Domosławski, Drug Policy in Portugal: The Benefits of Decriminalizing Drug Use, Open Society Foundations (June 2011), 17. 2

6 physical and moral degradation of drug use. 4 On the 25 th of April 1974, the Portuguese military successfully led a non-violent coup against the Estado Novo regime. The Carnation Revolution, as the coup is remembered, quickly opened Portugal to the rest of western society for the first time in four decades. 5 Portuguese society felt ill equipped to manage the rapid societal changes that followed. By the 1980s, hashish and marijuana were the most commonly used drugs in Portugal, but heroin usage was visible by the late 1970s. With little to no prior experience or knowledge of narcotics, drug usage quickly became a leading national concern; in 1997, a EuroBarometer survey found drug-related issues to be the country s perceived main social problem. In reality, Portuguese drug usage never reached the same levels present in other European nations, but for the small country, the issue appeared to be severe. 6 Drafting Reform While the overall illicit drug consumption rate in Portugal during the 1980s and 1990s was among the lowest in all of Europe, levels of problem drug use, especially heroin, and drug- related harms were closer to, and sometimes above, the European average. 7 Widespread heroin use fuelled the spread of HIV/AIDS, and an estimated 60 percent of Portugal s HIV-positive population was also heroin users, a trend the conservative nation found especially troubling. 8 Additionally, international drug cartels recognized that the Iberian Peninsula is an idea gateway to the rest of Western Europe, 4 Drug Policy Profiles: Portugal, European Monitoring Centre for Drugs and Drug Addiction (2013), Domosławski, Ibid., Ibid., Ibid., 20. 3

7 and Portugal became a leading transit center for narcotics distribution. 9 With rising levels of hard drug use and HIV infections as well as trafficking, the Portuguese government in 1998 began to examine alternatives to typical zero tolerance drug policies. 10 The national government appointed a committee of specialists doctors, lawyers, psychologists, and social activists to create a new national strategy to combat drug use. The committee s proposals centered on the idea that drugs were not an absolute evil, stemmed from a variety of personal and social factors, and drug users for the most part did not directly harm others. As such, the committee recommended a new national narcotic agenda based on humane and pragmatic considerations to focus on prevention education, harm reduction, and improved treatment programs for problem drug users. 11 In a surprising move, the national government accepted nearly all of the committees recommendations; many experts cite the nation s experience under dictatorship as the root of Portuguese sensitivity and understanding towards the needs of society s weaker members. 12 Legal Language On July 1, 2001, Law 30/2000 came into effect, decriminalizing the purchase, possession, and consumption of all drugs for personal use in Portugal. 13 Possession must be for one s own consumption and cannot exceed the quantity required for [ ] 9 Michael Specter, Getting a Fix: Drug Decriminalization, The New Yorker October 17, 2011, Domosławski, Ibid., Ibid., Glenn Greenwald, Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies, Cato Institute (2009), 2. 4

8 average individual consumption during a period of 10 days. 14 Decriminalization removed all narcotic violations from the criminal law and justice system to instead be processed as administrative offenses equivalent to a parking ticket. The Portuguese government hoped that decriminalization would remove the fear and stigma surrounding drug use and provide assistance to dependent users without the threat of criminal arrest. 15 Police officers who witness drug use are required to issue a citation but cannot make an arrest. The Commissions for Dissuasions of Drug Addiction, housed in the Ministry of Health, processes possession violations and are tasked with judging narcotics infractions. Dissuasion Commissions are comprised of three members, one appointed by the Ministry of Justice and the two others, usually from a medical or social services background, jointly appointed by the Ministry of Health and the national government s coordinator of drug policy. The Commissions may fine non-addicts, but in most cases, only issue a warning. When an offender is found to be an addict, proceedings will be provisionally suspended if the addict agrees to enter treatment. 16 Should the Commissions find evidence of drug trafficking, only then is the case referred to the criminal system. 17 Accounting Domain, Baseline and Major Stakeholders As a national policy, Portuguese drug reform takes place within Portugal s accounting domain. Portugal is a member of the Euro Zone and shares its currency, the euro, with 18 other European Union Member States. 18 Reports by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) assess public expenditures 14 Ibid., Domosławski, Greenwald, Ibid., The Euro, European Commission, last modified March 27, 2014, 5

9 through Reitox, a national focal point system, and adjusts for the occurrence of financial costs at a rate of six percent. This allows for comparable reporting across the 27 EU Member states, Norway, and candidate states. 19 Central to this is the international Classification of the Functions of Government (COFOG), which provides a consistent system of categorization across nations and helps to minimize discrepancies due to organizational differences among nations. 20 In this scenario, the baseline would be if Portugal had not implemented comprehensive drug reform and instead still continued to classify all drug possession and usage as a criminal offense. This baseline situation would continue to stigmatize drug use and more closely resemble the war on drugs present in other nations. Portuguese drug reform involves three major stakeholders drug users, the Portuguese national government, and private employers. The policy itself is directed at drug users; four distinct areas of the government are tasked with implementing and supporting reform Health, Public Order and Safety, Social Service Providers, and Social Housing Providers. Of the major stakeholders, private employers have the least influence, but remain necessary to properly analyze the costs and benefits of decriminalization. Inputs Administrative Services The successful implementation of decriminalization required an initial investment from the Portuguese national government. This input went to the administrative services 19 Towards a Better Understanding of Drug-Related Public Expenditure in Europe, European Monitoring Centre for Drugs and Drug Addiction (2008), Ibid.,15. 6

10 necessary to execute systematic institutional change. The Portuguese Institute on Drugs and Drug Addition (IPDT) was created through the merging of offices in the Ministry of Justice and Projecto VIDA. 21 The reform required the establishment of Commissions for the Dissuasion of Drug Addiction (CDTs) in every region of Portugal. Technical support for the CDTs is provided by the Institute for Drugs and Drug Addiction in the Ministry of Health and includes staff, budget, and procedural resources. 22 Additional administrative bodies were also created to facilitate inter-governmental coordination and cooperation. The Inter-Ministerial Council for Drug-Related Problems, Drug Abuse, and the Harmful Use of Alcohol is comprised of the Prime Minister, the National Drug Coordinator, and 13 ministers; it is responsible for national drug and alcohol policy coordination. National strategies, action plans, and evaluations are conducted by the National Council for the Fight Against Drugs, Drug Abuse, and the Harmful Use of Alcohol. 23 Conclusions from a 2005 evaluation report were used to create a new National Plan Against Drugs and Drug Addiction and required further government input, but due to the 2008 financial crisis, a new Action Plan was released in This plan called for additional government inputs to create the Subcommittee on Public Expenditure to fully assess the affects of Portugal s internal financial crisis. 24 Treatment and Educational Programs Additional input was required to increase the nation s ability to treat drug users and spread educational information. From 1999 to 2003, the number of Portuguese in 21 Drug Policy Profiles: Portugal, Caitlin Hughes and Alex Stevens, The Effects of Decriminalization of Drug Use in Portugal, The Beckley Foundation Drug Policy Programme, December 2007, Drug Policy Profiles: Portugal, Ibid., 21. 7

11 treatment programs increased by 147 percent to well over 14,000. This required the creation of detoxification centers, therapeutic communities, and halfway homes. Schools were also established to encourage prevention and educate the general public on the dangers of drug abuse. 25 The government initially doubled its investments in these programs to meet increased demand. The national government also actively contributes to programs aimed at harm and risk reduction. Central to this are efforts to lower the HIV/AIDs infection rate among serious drug addicts. The Institute on Drugs and Drug Addiction funds 69 projects and 30 social workers across the country to provide dependent heroin users with clean needles and methadone. 90 percent of these projects are executed by non-governmental organizations, but receive all funding from the Portuguese government. NGO workers are also more equipped to establish mutual trust with drug addicts, as they are not official government authorities. Workers distribute kits that contain clean syringes and needles along with hygiene agents; users must return used syringes and needles before they can receive a new kit. Additionally, NGO workers provide psychological services and information on treatment options. The Portuguese government is currently working to establish programs to further re-integrate former addicts into society. This includes projects with local employers in order to provide a limited amount of nine-month internships. In some cases, addicts receive government-owned apartments and live with other addicts as they undergo treatment programs. 26 These policy inputs highlight the belief that Portugal views drug reform as a public health initiative even if drug dependence cannot be stopped, the 25 Hughes and Stevens, Domosławski, 35. 8

12 state s efforts will continue to help and improve addicts quality of life. 27 Outputs Ultimately, Portuguese drug decriminalization served to reduce harm and minimize drug usage s negative consequences on the entire nation. 28 Representatives of the Ministry of Health state that at its core, decriminalization is a public health initiative meant to create better outcomes for the Portuguese people. 29 This output, however, came from multiple sources, each benefiting from the policy change. 30 Data collected a decade after decriminalization does indicate a shift in Portuguese drug habits, although it is inconclusive if policy reform is the direct cause. Heroin use appears to be decreasing while the use of cannabis increases. Cannabis, however, is considered to be less threatening to public health. As a public health project, decriminalization s greatest success has been the overall reduction of blood-borne viruses, including HIV/AIDS, among intravenous drug users. 31 Legal Savings Prior to drug reform, drug users were arrested and finger printed by police to be presented in court but were ultimately almost always released. The legal system was overburdened, which led to severe delays in the processing of cases. 32 Chief Judicial Police Inspector João Figueira came to support decriminalization after witnessing first hand the burden reduction to the legal system as a whole. Stakeholders report that police 27 Domosławski, Specter, Ibid. 30 Ibid. 31 Hughes and Stevens, Ibid., 4. 9

13 efficacy and activity have dramatically increased following drug reform. 33 The CDTs are able to process cases more quickly and cheaply than the courts, and thousands of petty drug users are not in the prison system. 34 Most importantly, decriminalization allows the Portuguese Ministry of Justice to instead focus resources on significant and dangerous crimes, which pose a greater threat to society. Portuguese authorities refocused on increased enforcement of laws prohibiting the trafficking and distribution of drugs to halt large-scale operations. 35 With more resources available, Portugal is currently a more active member of international trafficking investigations. Claims are also made that decriminalization decreased police corruption by removing opportunities and incentives. 36 Social and Medical Savings Portuguese stakeholders report that increased education programs reduce the prospect that non-problematic drug users will develop severe addictions, which ultimately creates social and medical savings. 37 People are more likely to report both drug use and abuse and to seek treatment options. With the negative stigma of drug use partially removed, health sector professions report increased understanding of the motivations behind and patterns drug use, which in turn enables them to provide improved medical and psychological responses. 38 Needle exchange programs, with the goal of reducing HIV/AIDS infections, can also decrease government spending on short-term and longterm medical services. Data on Portuguese exchange programs has not been analyzed yet, 33 Hughes and Stevens, Briefing Paper Decriminalization of Drugs in Portugal, Hughes and Stevens, Specter, Hughes and Stevens, Ibid., 7. 10

14 but studies in other nations, such as Australia, reported significant government savings. 39 The Portuguese government, drug users, and private employers also stand to gain positive social impacts following decriminalization. The public generally views the government to be more accountable and responsive as a result. Furthermore, Portuguese civil society strengthened as the public and non-governmental organizations became more involved in the political process. 40 Drug users and private employers both benefit from increased productivity and participation in the workplace. Quality of Life Improvements to drug users quality of life is an important output from drug reform but is difficult to tangibly measure. A report by The New Yorker found that Portuguese drug users no longer feel hunted or scared or looked upon as criminals. 41 Decriminalization allows addicts to live and to breath, and many consider themselves lucky to live in a society that accepts the fact that drugs and addiction are part of life. 42 Drug addicts are now viewed as enfranchised members of society with access to increased opportunities and services. Benefits and Costs General Benefits At this time, the costs and benefits of drug decriminalization in Portugal remain unclear due to a lack of research and data. Public expenditures provide some insight into the monetary cost of decriminalization, but those figures are unavailable to accurately monetize benefits. Tableau 1 illustrates the distribution of monetary benefits and costs 39 Domosławski, Hughes and Stevens, Specter, Ibid. 11

15 across the stakeholders. In theory, all three stakeholders drug users, the national government, and private employers receive monetary benefits from decriminalization. Drug users benefit from increased productivity (B5a) and quality of life, which includes housing and career advancements. Private employers also receive benefits from the increased productivity of newly employed rehabilitated addicts (B5b). Monetary benefits to the public stakeholder the departments responsible for Health, Public Order and Safety, Social Services, and Social Housing are the most tenuous and depend entirely on decriminalization s ability to improve the nation s overall health. If the policy is successful, Health stands to benefit monetarily from the decreased spread of HIV/AIDS and other drug-related illnesses, thus reducing the overall demand and need for medical services (B4). Public Order and Safety (B2) would receive monetary benefits from the decreased need for officers to monitor and arrest individual drug users. Decriminalization, in theory, should also decrease petty crime, contributing further benefits to Public Order and Safety. Providers of both Social Services and Housing will benefit from a reduction in the number of Portuguese drug addicts. Fewer social services, such as welfare and unemployment, will be required (B3a), and fewer addicts will rely on government housing long term (B3b). Public Expenditures Costs As with the benefits of decriminalization, costs are also difficult to accurately estimate, although more data does exist to begin assessments. As an initiative implemented by the national government, the public sector bears the costs of decriminalization. The corresponding costs can be estimated using a 2008 report by the European Monitoring Centre for Drugs and Drug Addiction that attempted to monetize 12

16 drug-related public expenditures across Europe, included Portugal. This accounted for labeled expenditures, which the state voluntary commits to combat drug use and are most commonly linked to budgets or fiscal year accountancy reports. 43 In 2005, Portugal reported total labeled expenditures (C1 + C2 + C3 + C4 + C5) of 69.1 million Euros, an amount equal to.10 of total public expenditures. Total Portuguese labeled expenditures are divided among three ministries Health, Public Order and Safety, and Defense. The Portuguese Ministry of Health s public labeled expenditures for 2005 totaled 64.6 million Euros (C3 + C4). This amount equals percent of total drug-related national public expenditures. Within the Department of Health, 62.1 million Euros (96 percent of the department s funding) financed general public health services. Only 1.0 million Euros, two percent of the total figure, went to outpatient services. Hospital Services, 1.4 million Euros, accounted for the remaining two percent of labeled total expenditures. Portugal reported spending 4.4 million Euros in 2005 on Public Order and Safety (C5), which accounts for 6.37 percent of total labeled public expenditures. Portugal spent 100 percent of this amount on police services unlike the majority of other European nations, which divided this category between police services, law courts, prisons, and other expenses. 44 Estimates are currently unavailable for Social Service Provides and Social Housing providers. In theory, Social Service costs (C2) include funding employment opportunities for recovering addicts. Social Housing costs (C1) depend on the number of addicts in government housing while receiving treatment. 43 Towards a Better Understanding, Ibid.,

17 Conclusion Although it is currently impossible to complete a full cost-benefits analysis on Portuguese decriminalization, the policy can be measured against the alternative baseline. In cost-benefit analysis, a project or policy can be considered effective even the status quo is simply maintained. That, at the current moment, is the best way to interpret Portugal s reform. Portugal did not become a tourist drug haven as many conservatives feared, and early data suggests little change to overall national levels of drug usage. As previously stated, Portugal s rates of drug usage remain well below the European Union average, and there appear to be some improvements in the decade after decriminalization. Reports indicate decreased newly reported cases of HIV/AIDs and Hepatitis B and C among drug users. Heroin usage rates remain constant or slightly improved indicating that as a public health initiative, decriminalization has generally produced successful positive outputs. At the moment, data suggests only one negative output increased levels of marijuana usage. However, the Portuguese government and society consider marijuana to be a lesser threat to the nation. Further research is necessary to complete the full Kaldor-Hicks Tableau and produce a Net Present Value for Portugal s decriminalization of drugs. In order to be a successful policy, the benefits to the Public Stakeholders (B2 + B3a + B3b + B4) must be larger than the administrative costs associated with reform (C1 + C2 + C3 + C4 + C5). The administrative costs of decriminalization are reportedly 69.1 million Euros. Of the associated benefits, Portugal stands to gain the most from medical and legal savings (B2 + B4), but it is currently unclear if these will outweigh the sizeable costs. Transfer cost within departments should also be examined in order to fully gauge shifting resources 14

18 within the Health and Public Order and Safety stakeholders. Definitive conclusions on the policy s overall costs and benefits will require additional time; further cost-benefit analysis must account for a larger time frame and apply appropriate discount rates. This information will allow the cost-benefit analysis to expand beyond comparisons against the baseline and serve as a guideline for other nations attempting to liberalize their own drug policies. 15

19 Benefits Appendix Tableau 1: Stakeholder Distribution of Costs and Benefits Drug Users Health Public Order and Safety Public Stakeholders Social Service Providers Social Housing Providers Private Employers NET Quality of Life B1a+Bab B1 Redeployment of Law Enforcement B2 B2 Reduced Demand for Social Services Reduced Demand for Medical Services Increased Productivity Costs Housing Social Services Non-Housing Social Services Medical Services Administrative Costs Police Services NET B1+ B5a B4 B3a B3b B3a+B3b B5a B5b B5a+B5b B4 -C1 -C1 -C2 -C2 -C3 -C3 -C4 -C4 B4- C3-C4 -C5 -C5 B2- C5 B3a-C2 B3b-C1 B5b B1+B2+B3a+ B3b+B4+B5a+ B5b-C1-C2- C3-C4-C5 16

20 Works Cited Domosławski, Artur. Drug Policy in Portugal: The Benefits of Decriminalizing Drug Use. Open Society Foundations (June 2011). Drug Policy Alliance. Thursday: Mexico to Introduce Series of Sweeping Drug Policy Reform Bills. February 13, Accessed February 15, Drug Policy Profiles: Portugal, European Monitoring Centre for Drugs and Drug Addiction (2013). European Commission. The Euro. Last modified March 27, Greenwald, Glenn. Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies. Cato Institute (2009). Hughes, Caitlin, and Alex Stevens. The Effects of Decriminalization of Drug Use in Portugal. The Beckley Foundation Drug Policy Programme, December f.pdf, 6. Richardson, Valerie. Colorado, Washington Legalize Pot for Adult Recreational Use. The Washington Times, November 6, Accessed February 15, to-legalize-pot/?page=all. Specter, Michael. Getting a Fix: Drug Decriminalization. The New Yorker, October 17, Towards a Better Understanding of Drug-Related Public Expenditure in Europe, European Monitoring Centre for Drugs and Drug Addiction (2008). 17