Conventional policy discourses have typically framed illicit economies1 as a security problem and a cause of underdevelopment in the Global South. Examples from around the world are numerous and diverse. In Afghanistan, revenue from the opium-heroin trade has been linked to ongoing-conflict, corruption and political instability (US State Department 2018: 92); piracy off the Horn of Africa has been identified as a threat to international commerce and associated with terrorist financing, drug trafficking and people smuggling (UNODC 2017); in Colombia, the government has declared war against illegal gold mining, highlighting its role in environmental destruction, sustaining armed groups and inhibiting national development plans (Gagne 2015). Illicit economies thus frequently drive violence, corruption, exploitation and failures in governance.
However, for many communities living in poverty and conflict-affected areas across the globe, involvement in illicit economic activity can ameliorate some of the immediate problems they face. Illicit economies may provide vital sources of livelihoods and underpin stable political orders and socio-economic development at the margins of the state. The limitations of conventional policy discourses are exposed in such contexts, with simplistic securitised responses causing further harms to already marginalised communities, for example (Sagredo et al. 2016). This special edition of the Journal of Illicit Economies and Development builds on a growing and multifaceted policy and research agenda that aims to advance novel development perspectives of illicit economies in the Global South.
The special issue stems from a collaboration between various UK universities and international development actors working to bring greater attention to the development implications of illicit economies and their governing policies.2 It arose from a multi-disciplinary and cross-sectoral colloquium held at SOAS, University of London in April 2018, as well as a collection of submissions to the International Drug Policy Unit (IDPU) of the London School of Economics and Political Science (LSE). The former, titled Addressing the Development Implications of Illicit Economies, brought together academics, policymakers and practitioners to examine the complex relationship between illicit economies and development. The latter is a cross-regional and multidisciplinary project harnessing LSE research and expertise; it represents the institutional home of the newly established Journal of Illicit Economies and Development (JIED), hosted by the LSE Press.
Both initiatives aim to seize on increased attention towards these issues in international development circles. For example, at the UN General Assembly Special Session on the World Drug Problem in 2016 (UNGASS), member states asserted that efforts to tackle illicit drug economies and achieve the Sustainable Development Goals (SDGs) were complementary and mutually reinforcing (UNODC 2016). NGOs have also turned to this agenda, with Christian Aid, for example, calling for greater engagement with the underlying drivers of illicit economic activity in underdeveloped regions (Christian Aid 2015). Despite the shifting policy environment, there remain significant gaps in knowledge and understanding of illicit economies, and uncertainty over the future direction of this policy agenda. Both initiatives represent a step towards closing these gaps: facilitating cross-sectoral exchanges between development actors and researchers working on illicit economies in the Global South. This special issue aims to continue and build on these conversations.
This introductory article outlines key themes of the illicit economies and development research and policy agenda. It begins with a discussion of the policy environment, before scoping the growing literature on illicit economies and development in the Global South. This brief review is divided according to three overlapping strands of the literature: livelihoods, political economy and policy responses. The final section introduces the articles that compose the special issue, outlining their diverse empirical and analytical perspectives: from the policy landscape of international governance and the historic influence of the ‘covert netherworld’ in shaping political orders around the world, to the proliferation of falsified medicines in North and West Africa and the views of Colombian cocaleros on Bolivia’s approach to coca. Accompanying these are prescriptive papers on new strategic approaches to transnational organised crime, as well evaluations of the institutional opportunities and obstacles to greater mainstreaming of development approaches to illicit economies. These include the German government’s support of the concept of ‘alternative development’; the Thai government’s implementation of comprehensive development policies that have demonstrably impacted the lives, livelihoods and illicit economy formation in their border regions; and efforts to establish the drugs and development debate within the World Bank.
At the international level, there has long been policy recognition of the relationship between development, crime and conflict. The World Bank’s 2011 World Development Report, for example, argued that underdevelopment, insecurity and illicit economies are often intimately connected in the Global South (2011). State fragility and underdevelopment are framed here as key explanatory factors for the presence of illicit economic activity. This activity may be interwoven with conflict in such cases, undermining peacebuilding efforts and weakening state institutions. OECD-published research on this theme contends that fragile and/or conflict-affected states are more vulnerable to transnational organised crime and its corrupting effects (Miraglia et al. 2012). This constellation of factors is said to create a downward spiral, where illicit economies and/or conflict further reinforce state fragility and underdevelopment. Security and development are thus bound closely together within this policy discourse (Jesperson 2015: 24). The ‘security-development nexus’ narrative broadly argues that security is a necessary precondition for development, and that development can tackle the causes of insecurity.3 Addressing underdevelopment by ‘transforming the institutions that provide citizen security, justice and jobs’ (World Bank 2011: 8), for example, is proffered as crucial to effective policy responses.
The influence of the security-development framework has been evident in international drug control, with ‘alternative development’ programmes4 and institution-building running parallel to militarised, suppression efforts in ‘producer’ and ‘transit’ nations. In 2015, for example, the UNODC argued that alternative development ‘helped to address not only the driving factors, but also the underlying root causes of the cultivation of illicit crops’, forming part of its ‘balanced approach’ to the ‘world drug problem’ alongside ‘crop eradication programmes and law enforcement measures to counter illicit cultivation, production, manufacture and trafficking’ (UNODC 2015: 77).
Policy responses in this area, though, have been criticised for typically centring on the security element to the detriment of development (e.g. Keefer, et al., 2010). Crude measures of counterdrug ‘progress’, such as hectares of poppy/coca/cannabis crop destroyed or volume of drug seized, are prioritised over development indicators. For example, the UNDP noted that many of the harmful ‘collateral consequences’ of this enforcement-focused approach fall on the world’s poor: from increased corruption, violence, and instability to human rights abuses against civilian populations and damage to essential sources of livelihood (UNDP 2015). Drug control efforts, designed to protect societies in the North, not only create lucrative black markets, but actively harm those at the low levels of the trade.5 Such critiques highlight the dominance of securitised conceptions of illicit drug economies in the Global South: where the security element of the policy response is given more weight than development (Buxton 2015: 4).
Indeed, general fears over the securitisation of development have undermined the involvement of development actors in this policy arena. Traditionally, the issue of illicit economies has fallen under the mandate of security agencies, while being viewed as peripheral to the core missions of development actors. Mainstream human development approaches, for example, encourage close working relationships with communities to formulate programmes, and long-term, context-specific planning (Jesperson 2015: 31). Securitised responses that prioritise the goals of external actors and are predicated on the use or threat of force, may be viewed as incompatible with such principles, while (in)directly harming the target-populations of development actors.
Furthermore, in contexts where illicit economies lift communities out of poverty, development actors may be reluctant to align with suppression efforts. Mansfield (2018) highlights the case of Afghanistan and its opium-heroin trade: adherents to ‘market-based development’ orthodoxy oppose destruction of one of the few economies that functions in conflict-affected areas of the country; and development actors are unable to formulate programmes that match the socio-economic benefits of opium-heroin for rural communities in these regions. Such dynamics clearly pose difficult dilemmas for development actors; where illicit economies cause significant harms—linked to conflict and corruption in the Afghan case, for example—while simultaneously providing ‘solutions’ for the needs of marginalised peoples.
How development actors might confront such dilemmas and advance development-led responses is a central question of the illicit economies and development policy agenda. Here, the growing literature on illicit economies in the Global South offers insights. This broad, multi-disciplinary literature problematises the relationship between illicit economies and development, moving beyond the securitised assumptions of conventional policy discourses.
Work on livelihoods engages with the socio-economic benefits provided by illicit economies at the margins of the state. For example, Mansfield (2016) adopts a rural livelihoods-framework to show the neglected agency of Afghan opium-poppy farmers, as well as their responses to challenging local conditions, conflict and prohibition, and the ways in which opium-poppy is entwined with issues of land-access, the wider rural economy and local power brokers. The ability of communities to adapt and survive is also mirrored in Verweijen and Marijnen’s (2018) research on ‘guerrilla livelihoods’ in conflict-affected Democratic Republic of Congo. Conservation efforts backed by Western donors and linked to counter-insurgency are viewed by some communities of the Virunga National Park to run contrary to their interests. Faced with few other options, they engage in prohibited economic activities, such as ‘guerrilla’ farming, fishing and logging under the protection of armed actors. These communities turn to illicit economies and non-state actors partly in response to the actions of delegitimised state actors. In both cases, illicit economies operate in areas beyond the reach of development efforts; the drivers and dynamics of community involvement in such activity are more nuanced than typically permitted in conventional policy discourse.
Overlapping with this area of the literature, political economy analysis ‘focuses on the distribution of power and wealth between different groups and individuals, and on the processes that create, sustain and transform these relationships over time’ (Collinson, 2003: 10). In some areas of the Global South, illicit economies are central to these processes and the trajectory of development. Authors such as Goodhand (2008), Meehan (2015) and Snyder (2006), for example, have challenged the assumption that illicit economies necessarily cause political instability and deepen conflict.6 Distribution of wealth from illicit economies between key political actors may serve as a basis for state-building and political order. While such orders may be fundamentally corrupt and unsustainable in the long-term, this research calls attention to the potential implications of securitised policies: instability and heightened violence. Similarly, Arias (2017) examines the role criminal groups play in ‘micro-governance’ in Rio de Janeiro, Medellin and Kingston. These groups are often integrated into larger political structures, with links to politicians, state security forces and civil society groups shaping the ‘orders’ they create, patterns of violence and the ‘lived political experience’ of local residents. The presence of these groups and their criminality, therefore, ‘reflects as much ongoing systems of governance and order as it does conflict and state fragility’ (Ibid: 243). Such analyses pose questions for development actors. In highlighting the limitations of security responses and the complex political economy of such contexts, development actors are faced with difficult choices on how best to navigate this complex terrain and serve affected communities.
Finally, the literature also examines the impact of policy responses to illicit economies. For example, there is an extensive literature critiquing the ‘war on drugs’ in the Global South. This includes: the role of supply-side policies in stimulating drug-related violence (Castillo et al. 2014); the effects of prohibition on levels of corruption and poor governance (Mercille 2011); human rights abuses carried out by state security forces (Youngers and Rosin 2005); and the environmental damage caused directly and indirectly by eradication policies (Jelsma 2001). These analyses challenge the securitised premises of the ‘war on drugs’ and, by implication, highlight the need for new approaches. Grisaffi, et al. (2017) explore one such alternative approach: the ‘Social Control’ policy of the Morales government in Bolivia. This approach prioritises integrated development and the engagement of communities in programming over forced eradication of coca, while attempting to build the legal market for the crop. Although the replicability of this policy to other contexts and its long-term sustainability remain open to question, this research highlights the advantages of development perspectives of illicit economies. The Bolivian government has practically eliminated violent clashes between cocaleros and security forces, and achieved meaningful development in areas previously at the margins of the state, for example. In such ways, research builds the evidence base in this policy area, advancing development perspectives of illicit economies in the Global South. The special issue continues in this spirit.
The special issue mirrors the diverse and multidisciplinary nature of the broad literature on illicit economies and development. The papers engage with different aspects of the topic, applying distinct analytical perspectives.
Alfred McCoy’s historical lens reveals the entrenched and enduring influence of the ‘covert netherworld’ on politics around the world. Drawing on the cases of Burma, the Philippines and Afghanistan, this conceptual framework contends that illicit economies may sustain clandestine domains that challenge or support existing political orders. In the case of Afghanistan, for example, the opium-heroin trade has been associated with the CIA-supported Mujahideen, the rise of the Taliban and the continuing failure of global powers to bring ‘order’ to the country. In illuminating this ‘shadowy realm’, McCoy elucidates the power structures that frequently impact on politics in ‘weak states’ of the Global South. Christoph Heuser’s article on the VRAEM region of Peru strikes a similar vein. Heuser challenges the assumption that illicit economies are always violent and destabilising, arguing that such economies may be closely connected to the creation of distinct local political orders. In the case of VRAEM, the coca-cocaine trade is embedded in local social structures that in-turn create mistrust of the Peruvian state and strain state-societal relations. Both papers thus deepen our understanding of the often-hidden role of illicit resources in shaping the political economy of countries in the Global South.
Deborah Alimi shifts focus to the level of international governance. She discusses the increased traction of the SDGs discourse within drug control, and barriers to developing this agenda into concrete policy tools and practices. Key here are changes in policy framing that prioritises SDGs: knowledge dissemination between different policy actors, including better policy metrics, and the creation of platforms for cross-sectoral policymaking. In short, more work is needed to break down sectoral frontiers and open up space for meaningful collaboration between the policy domains of drug control and development. Axel Klein’s article shows the knock-on effects of such policy incoherence at the international level. His analysis of the use of Tramadol—much of it falsified—in North and West Africa not only highlights the shortage of pain medications in areas of the Global South, but also the implications of drug control policies that focus on repression of drug users rather than human well-being. In this case, efforts to bring Tramadol under the international drug control regime would have significant impacts on the treatment of acute and chronic pain in these regions. With parallels to Alimi’s paper, Klein calls for changes to international regulation that are sensitive to these contexts, addressing the trade in falsified medicines and prioritising public health.
Thomas Mortensen and Eric Gutierrez’s paper documents an innovative initiative to develop knowledge exchange between grassroots actors in Colombia and Bolivia. Colombian cocaleros travelled to Bolivia to learn about different policy approaches to coca and the development of coca growing regions. The authors argue that greater integration of Bolivian coca growers in policy development has been a key factor in reducing violence. The paper highlights the vital importance of incorporating grassroots actors into responses to illicit economies, empowering communities to define the path of development. For example, Mortensen and Gutierrez note the determination of Colombian coca growers in the wake of their tour to mobilise politically and demand a shift from enforcement-based policies to development.
Following Mortensen and Gutierrez’s paper, the first paper from the IDPU collection by María Alejandra Vélez and Iván Lobo further discusses the role of local communities in resisting the spread of illicit crops and other illicit economies, building on insights from a research project in Colombia. Communities’ organisational capacity and active local leadership in the context of illicit economies has been understudied and largely ignored in policy debates, the implications of which, and potential ways to support such grassroots movements, have thus been neglected. Vélez and Lobo outline three main forms of community resistance in the context of illicit crops, related to criminalisation or eradication (most visibly illustrated in the cocalero protests), penetration, and expansion (which are much less frequent, however the Afro-Colombian community of the Yurumanguí river basin is a notable case). In conclusion, Vélez and Lobo argue that investments in cultural and social capital of these communities is an important means to diversify the scope of traditional policy interventions in the area of illicit crops.
Mark Shaw’s paper develops the concept of a more strategic global approach to transnational organised crime. Shaw argues, for example, that drugs and organised crime policies are generally decided in ‘separate rooms’ despite being deeply and innately connected. Shaw highlights how the concept of harm reduction on the demand-side of the drug market has grown in acceptance in recent years, but that such progress or coherence of approach is lacking on the organised crime front which ‘remains strongly embedded in the language of law enforcement’. He points to the weaknesses of multilateral processes intended to address transnational organised crime. These, Shaw suggests, too often derogate responsibility to states parties, many of which lack the capacity to implement them or indeed are compromised in their ability to do so. He concludes by suggesting a synthesis between the drugs and organised crime debates, where each could focus more coherently on the idea of improving development outcomes through a more strategic grounding in principles of reducing societal harm.
Linking in to Shaw’s arguments, Daniel Brombacher and Jan Westerbarkei evaluate the evolution of development approaches to drug control over the past four decades up to the present day. They utilise a particular focus on their organisation and the German government’s interest in implementing Alternative Development (AD) as a key pillar of their international drug control strategy. They suggest the German approach has been influential in ‘the shaping of the global drugs and development nexus’. They point to the 1998 UNGASS and the 2016 UNGASS as ‘major milestones’ in the four-decade history of the AD concept and suggest that the most recent UNGASS Outcome Document has ‘pushed wide-open’ the door on ‘development oriented thinking in international drug policy’. They suggest that AD, previously viewed as limited to illicit crop production has now been broadened in scope to enable a serious development-oriented discussion on urban drug markets and drug trafficking—areas, as Shaw highlight in their article, that had traditionally been viewed almost solely through the lens of law enforcement and repression.
Following Brombacher and Westerbarkei’s broad discussion of the international principles and evolution of AD, Dispanadda Diskul, Ramrada Ninnad, Andrea Skinner, and Visit-orn Rajatanarvin evaluate what is often held as the most successful development intervention in a drug producing context, the case of Thailand. Under the title ‘development not drug control’ they make the case that the Government of Thailand ultimately embarked on a long-term development intervention that produced significant and positive benefits for the affected communities, including a reduced reliance on illicit crop cultivation. They highlight the key lesson from the Thai experience suggests that drugs should be seen as a development problem rather than a drug problem. Specifically, they look to the case of the Doi Tung Development Project and what tangible lessons can be learned from that as a case for potential international policy transfer.
William Byrd’s contribution follows a different institutional case study, but encompasses many of the questions and themes both Brombacher and Westerbarkei’s paper and Diskul et al. pose. Byrd utilises the experience of the World Bank engaging with the drugs and development issue in Afghanistan as a basis for examining ‘the possibilities and benefits as well as the limitations of World Bank/IFI engagement on drugs and development’. In particular, Byrd focuses on whether the lessons of Afghanistan suggest there are ‘unexploited opportunities’ for mobilising the World Bank and other International Financial Institutions to support development planning and implementation around drugs and counter-narcotics. Ultimately, Byrd’s analysis concludes with what he refers to as a ‘realistic note of pessimism’ regarding such options.
This article has sought to introduce the key themes the illicit economies and development research and policy agenda. The special issue engages with these themes, including livelihoods, the political economy of illicit resources and the development of international governance frameworks. Of course, this leaves some important challenges in advancing development-perspectives of illicit economies within policy circles untouched.
For example, defining a unified policy agenda around illicit economies in the Global South may be deemed problematic. This policy area incorporates an extensive variety of contexts, with distinct constellations of actors, existing and potential responses, and social, political and economic dynamics. Some illicit resources may be viewed as more politically sensitive than others, influencing the willingness of development actors to become involved in such areas. The institutional mandates of particular development agencies make them wary of being dragged into debates around legalisation of drugs, for example. In cases where insecurity is high, the feasibility of pursuing development-orientated policies is reduced. Transposing Bolivia’s model of Social Control to Colombian regions where armed actors continue to operate, for example, seems unlikely. Enforcement will still be required to deal with the harmful effects of crime, insecurity and exploitation. In such contexts, the question of how security agencies and development actors work together remains uncertain. Indeed, security actors may be resistant to efforts to ‘place development first’, while development actors remain unwilling to associate themselves with enforcement efforts that alienate local communities.
Such questions and nuances demand caution. However, creating a space for the exchange of knowledge and perspectives is crucial to advancing development perspectives of illicit economies. Research can deepen our understanding of the complex relationship between illicit economies and development, and provide a strong grounding for the development of this agenda. Here, initiatives such as the colloquium Addressing the Development Implications of Illicit Economies, LSE’s IDPU and this new journal, are of great value; creating platforms for engagement and discussion between academia, policy and practice. This cross-sectoral engagement and discussion may serve as a launchpad for the formulation of policies that more effectively serve the needs of marginalised communities.
1While accepting the conceptual and definitional complexities in categorising ‘licit/illicit’ and ‘legal/illegal’ (see Chiodelli, et al., 2018: 4–11), for the purposes of this paper, ‘illicit economies’ refers to economic activity formally classified as illegal by national and/or international systems of government.
3Supporting this discourse is the implicit ‘security threat’ of these dynamics to the North (e.g. see Wild and Elhawary 2012). Contemporary ‘threats’ range from the spread of organised crime, drug trafficking and terrorism to inward flows of migrants/refugees, environmental damage and the destruction of world heritage.
4Such programmes have involved crop substitution, improved infrastructure and social provision, as well as regional development and growth strategies aimed at helping rural communities access legal global markets.
5Perversely, legalisation of cannabis in the North, in part designed to decriminalise drug users and target the profits of organised crime, may indirectly harm small-scale producers in countries such as Mexico and Morocco. These producers may be unable to compete with legalised, large-scale producers in the North. In this sense, the illicit nature of these markets created competitive advantages for small-scale producers. New models of drug control should take such dynamics into account. For example, see Blickman (2017).
My deepest thanks to my fellow guest editors for their diligent work in bringing this special issue to fruition: Deborah Alimi at the Université de Paris 1 Panthéon-Sorbonne, Julia Buxton at CEU, Axel Klein at GDPO and Patrick Meehan at SOAS. Thanks also to John Collins and Alex Soderholm at LSE for the invitation to guest edit the special issue and their vital support throughout this process, and my congratulations to LSE’s IDPU for the launch of this exciting and important new journal. I would also like to express my gratitude to Eric Gutierrez at Christian Aid, and Daniel Brombacher, Elisa Lorenz and Corinna Wöllner for inviting me to collaborate and their help in organising the Colloquium. Finally, my thanks to the authors and peer-reviewers for their hard work in meeting challenging deadlines and delivering excellent papers. — Allan Gillies.
My work was supported by the Economic and Social Research Council under Grant ES/P009875/1; and a grant agreement with the Global Partnership on Drug Policies and Development at GIZ.
The authors have no competing interests to declare.
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