Kevin Healy
Abstract: The international cocaine trafficking industry is strongly correlated with economic development, based upon the generation of illegal goods in scarce supply. These benefits can be measured through indicators such as national investment, savings, per capita incomes, and energy consumption. However, overall economic well-being, seen through increased employment and incomes, foreign exchange, and lowered consumer prices, is denied to countries when the drug trade is suppressed. Peasant coca producers in Peru and Bolivia illustrate how incentives to pursue the drug trade are strong for producers responding to First World demand. Through the cultivation of the coca leaf, peasant producers initiate the chain of cocaine production. This article first examines the attempts of rural modernization and economic improvements in the Andean countries through national public policies that try to disinterest peasants from engaging in the production of coca. Then, this article discusses alternative micro and macro level policies and institutional arrangements that could address the developmental needs and interests of peasants in those countries. Finally, this article presents a case study of effective grassroots development initiatives in the countries, showing a progression from macro to micro policies.
Keywords: Peru, Bolivia, peasant, drug trade, coca, economic development
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