CRM/LAW C100 Study Guide - Final Guide: Farm Gate, Supply Shock, Crack Cocaine
12 Nov 2017
School
Department
Course
Professor
Document Summary
Horizontal and vertical integration in trans-national firms political economy. Vertical integration has not occurred in cocaine and heroin markets because they don"t have means and access to grow the plants as well as sell it and distribute it. It would be very costly for them. Producers of modern international drug trafficking organizations are citizens of exporting because they are characterized by labor and have lower labor prices, lower opportunity costs and lower enforcement risks. Decent price for a low risk: search costs and price dispersion getting high and getting by. Gang members are also customers for drug dealer. Make up a very large part of the drug market: law enforcement swamping illegal drug markets and economic irregularities. By reducing supply, these programs (agricultural eradication programs) will increase prices at all stages of distribution, reducing the amount of drugs consumed. Enforcement swamping -> assuming the eradication worked, source country eradication would actually increase the effectiveness of law enforcement.
