An innovative solution to drug policing?

Roland Allen


July 7th, 2016

Can you incentivise a drug dealer to rat on the competition? Roland Allen channels his inner Escobar to find out.

It is uncontroversial to say that illicit drug use poses a substantial danger to society. Thousands of deaths occur as the result of illicit drugs each year, while the massive social and emotional toll is harder to quantify. But whilst there is widespread agreement on the problem, the optimal solution is less clear. Efforts can either work on the demand-side (discouraging people from experimenting), the supply-side (getting ‘tougher on crime’) or on ‘harm reduction’ (policies such as safe injecting rooms).

Recently, the Frankston police advertised a seemingly fresh solution on their Facebook page. It quickly garnered thousands of likes, a great deal of attention and a decidedly warm reception by Facebook users who liked the innovative approach, but was swiftly taken down:

Screen Shot 2016-07-07 at 4.15.28 PM

We will revisit the circumstances behind its removal later on. Firstly, let’s analyse this strategy and its consequences from a theoretical standpoint.

Encouraging criminals to dob in other criminals might initially seem like a bizarre strategy, but there is some logic in the proposition. As alluded to in the police’s appeal, it is a general economic principle that firms in a given market will enjoy greater profits with reduced competition; this provides a significant incentive for dealers to have their competition locked up so that they can have a greater foothold on the market, likely enabling them to increase price and sell more. Dealers are more likely than the average person (excluding their customers, who have a direct incentive to keep their supplier of drugs out of jail) to know the whereabouts of other dealers; drug dealing is a highly territorial exercise and generally a given dealer will control a particular area (violence is the usual result of this rule being broken; just ask Walter White). So it shouldn’t be farfetched to assume that dealers have a good idea where their local competition are doing business.

While drug dealers could of course dob in their rivals (just like any ordinary citizen) even without this sort of explicit encouragement, most might reasonably be wary of directly contacting the very organisation that is trying to catch them; if the police weren’t overtly serious about encouraging dealers to snitch, dealers might be afraid that of police cashing in on the short-term and tracing calls and identifying and locking up the snitchers, in an ironic twist of fate (the new initiative also provides a highly anonymous, technology-free way of dobbing by sending in a form which would help put a criminal at ease).  Let’s assume that such an explicit campaign will allay dealer’s fears and increase the frequency with which they are prepared to contact police and snitch.

Let’s then imagine this scheme is put into place. Given that dealers would have a strong financial incentive to assist the police in catching their competition, would we expect them to go right ahead and do it? Is it reasonable to assume that every dealer will attempt to dob in every other dealer as quickly as possible, with the end result being that everyone ends up behind bars? Cooperation between dealers to withhold on snitching might seem like a reasonable idea (everyone accepting a smaller share of the pie is a better result than everyone ending up in the slammer, surely), but we can see that a Prisoner’s Dilemma-type situation will quickly unfold.

Let’s analyse a simplistic market with only 2 dealers, where each has to make a simultaneous decision on whether to dob the other one in (and cannot observe the actions of their competitor); a ‘Positive’ outcome is one where a dealer enjoys greater economic profits (at least in the short term) due to their competitor being arrested, a ‘Neutral’ outcome is where both are still operating as per usual and a ‘Negative’ outcome is one where a dealer is sent to prison: (Dealer 1’s outcome is listed first)


Dob Not dob
DEALER 1 Dob Negative, Negative Positive, Negative
Not dob Negative, Positive Neutral, Neutral


Consequently, unless credible motive to cooperate in the long-term can be established beyond a reasonable doubt, dealers will always snitch on their rival given the financial benefits received from reduced competition. Thus, all parties in the market should rat out everyone else and the market self-destructs and drug dealing in the area ceases to exist; a happy ending. Right?

Well, not exactly.

Imagine the aforementioned scenario unfolded and for a moment in time, there were no drug dealers in an area because both dealers had gone to prison. This would be a prime situation for someone new to come in and start making supernormal profits given their monopoly on the market. We’ve assumed this is a two-player game, but in reality it wouldn’t have to stay that way. Determining what would happen in the long-run is a little more complex.

Now, even despite the great profits that can be made in the short-term, most prospective dealers scoping out the market may balk at this idea because they know that it would only be a matter of time until they themselves got dobbed in by yet another entrant into the market and put in prison.

But all it takes is one or two people who are foolhardy enough to be enticed by these short term benefits to start dealing and we’re effectively back to square one again, even if these new entrants will only last so long before being incarcerated (repeating the cycle) with new people taking their place.

Thus it seems reasonable to assume that despite the more difficult conditions imposed upon dealers, at least SOMEONE will be dealing drugs in the market at any given point in time. The supply conditions for drug markets are now more hostile; drug dealing has an even greater risk attached to it and there is a greater turnover of suppliers (as drug dealers are being sent to prison at a greater frequency). What this police strategy will ultimately do is reduce, but never completely eliminate, the number of dealers in a given market at any given time as less people are prepared to take on the increased risk of dealing. Once the strategy is implemented, the number of dealers in a given market should hover around a relatively fixed number (with fewer than before), such that when one is jailed, a position opens for someone new to replace them. Sending a dealer to prison is like cutting off one head of the Hydra; another will eventually grow back in its place.

Assuming that any one dealer can bump up their own supply to meet demand, the existence of fewer suppliers in the market should not drastically alter the total consumption of illicit drugs in the market, compared to the more stable situation prior to the new police strategy where more dealers in the market all co-existed relatively (for their line of work) peacefully. Now, reduced competition will lead to an abuse of the greater market power each individual dealer now enjoys, allowing them to drive up the price significantly with little change in quantity traded given the low elasticity of demand for illicit drugs (they are addictive, after all). Thus, it seems unlikely that the ultimate goal of significantly reducing drug consumption would be achieved. The likely price increase may also have perverse consequences: addicts who can’t afford to pay for drugs may resort to stealing and other forms of crime to fund their habit. Such behaviour already occurs and a price increase would only exacerbate it.

So this abstract analysis is all well and good, but was this depressing conclusion one that the police came to which motivated the plea’s removal? Possibly. The Facebook post was removed “on reflection,” though we can only speculate on the details of such contemplation. Other qualitative factors may have played a part too; maybe the idea of pseudo-cooperation between dealers and law enforcement was just too radical a prospect to swallow. Ian Geddes, media unit inspector for Victoria Police, rationalised the abandonment of the plan by claiming that the initiative did not result in any tip-offs; perhaps unfair given its short lifespan. It seems like the plan may have been dead in the water from the outset.

Going further down the rabbit hole, it is a surprise to discover that this strategy is not an original idea. In fact, the advertisement and form provided by the Frankston Police is a word-for-word copy of that employed by police in Texas (the Lumberton Police Department), advertised in a local Texan newspaper last year:

Screen Shot 2016-07-07 at 4.16.06 PM

Seem familiar?

Unlike the half-hearted attempt by their Victorian counterparts, the Lumberton Police Department stuck to their guns. Shortly after its promotion, their police chief cited several submissions. Given that this was around a year ago, it would be interesting to hear how the initiative is performing in Lumberton today and whether it has made a positive impact on the community. Our analysis of the behaviour of dealers given the new incentives seem to be consistent with this small sample, but our welfare analysis would need a more in-depth check to see if it holds up.

So it seems like this idea may be in the periphery of the conscience of law enforcers worldwide. Unfortunately, it seems unlikely that such a strategy will improve the wellbeing of society. Only time will tell for sure.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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