Shooting up : the impact of illicit economics on military conflict

Abstract

The study explores the nexus between illicit economies and military conflicts. It investigates when and how access by belligerents to the production and trafficking of illicit substances affects the strength of belligerents and governments. Although narcotics trafficking is often treated as sui generis, the study situates the drug trade within the larger class of markets for illicit products and services. The study presents a general theory of the relationship between illicit markets and military conflict - the political capital of illicit economies -- and contrasts it with conventional wisdom on connections between drug trafficking and military conflict. The political capital of illicit economies argues that belligerents derive much more than simply large financial profits from their sponsorship of illicit economies. They also obtain freedom of action and, crucially, legitimacy and support from the local population, called political capital. If belligerents choose to become negatively involved in the illicit economy (attempt to destroy it), they not only fail to increase their military capabilities, but also suffer costs in terms of political capital. The extent and scope of belligerents' gains/ losses from their involvement in the illicit economy depend on four factors:

(cont.) the state of the overall economy; the character of the illicit economy; the presence of traffickers; and the government response to the illicit economy. These factors reflect both structural conditions outside of the immediate control of the belligerents and the government and strategic policy choices available to either the belligerents or the government. Contrary to the conventional wisdom about narcotics and military conflict, eradication of narcotics cultivation has dubious effects on the capabilities of the belligerents and is extremely unlikely to severely weaken them. However, it alienates the local population from the government and results in the population's unwillingness to provide intelligence on the belligerents - a crucial requirement for success against the belligerents. Thus, eradication of illicit crops increases the political capital of the belligerents without significantly weakening their military capabilities. The primary cases explored in the study are Peru, Colombia, and Afghanistan. Additional evidence is drawn from the cases of Burma, Northern Ireland, Turkey, and India.