Policy Brief - Inelastic Demand, Rational Consumers, and Drug Policy

Executive Summary 

Fentanyl and its analogs are beginning to appear across Europe. This places the estimated population of 1 million high-risk European narcotics users in jeopardy. American responses to fentanyl’s proliferation there, nearly a decade ago, and earlier waves of the opiate epidemic provide important lessons for informing European response. 

Policies that ignore the incentives of drug users as rational consumers with an inelastic demand have consistently caused unwanted negative spillover effects. Efficiently targeted law enforcement efforts in

Australia and recently the US have been able to prevent these adverse spillovers. Proactive strategies, such as Italy’s recently adopted plan for preventing the spread of fentanyl into the country exemplify an approach that when integrated with the overall EU strategy can be successful in preventing Europe from experiencing the same fentanyl crisis that America has faced.

As Europe begins to face the start of its own relationship with fentanyl, it is paramount that policymakers learn from the lessons of America and Australia in crafting their own response. 

Policymakers need to bear in mind that drug users are consumers who will respond to the changing economic environment wrought by their efforts. They will search for substitutes despite the best intentions of policy. 

However, initiatives that are conscious of this tendency can reap positive impacts. Rather than blind sweeps of street-level dealers, a measured approach that is built on careful intelligence efforts aimed at identifying and disrupting regional epicenters should be employed. 

Harm reduction efforts need to be rolled out alongside the disruptions of local markets, not as a replacement for law enforcement efforts. Strategic policy that accounts for the behavior of drug users as consumers is the only chance Europe has to prevent the ravages of fentanyl, if the drug is to continue to take root here. We can only hope that our policymakers here take heed of the lessons learned by others.

IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.

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