Creating affordable visas and legalising cannabis to combat the black market

In summary

According to the United Nations Office on Drugs and Crime, at least 2.5 million migrants were smuggled across international borders in 2016, generating nearly USD 7 billion for criminal cartels.

The same source highlighted that cannabis accounted for half of global drug seizures with an estimated 183 million users worldwide.

Current policies have serious limitations in restricting illegal migration and prohibiting cannabis consumption. However, research from a City, University of London economist suggests that the creation of affordable visas could allow governments to restrict smugglers’ businesses by offering economic migrants legal alternatives for safe passage.

The research also argues that the legalisation of cannabis, if implemented carefully, could have major benefits for people and weaken illegal organisations.

What did we explore and how?

Research from Dr Alice Mesnard, Reader in Economics, says ‘eviction prices’ for permanent and temporary visas can be set to drive smugglers out of business.

She demonstrates that a pricing strategy for visas can be finetuned to both suppress smugglers’ activities and control the flows of migrants. This requires a policy mix combining the sale of visas which prices smugglers out with enforcing sanctions against illegal activities.

Using a similar approach applied to the market of illegal cannabis in France and the US, Dr Mesnard shows that a policy combining elements of prohibition, such as enforcing sanctions against dealers with legalisation, would both drive dealers out of business and limit the use of recreational cannabis.

To combat the rise in consumption, Dr Mesnard explored the idea of setting an ‘eviction price’, where illegal suppliers cannot respond to the policy without going bankrupt. Her research shows that this price can be set higher when governments increase sanctions against illegal activities.

Benefits and influence of this research

As a result of the European migrant crises of 2015, Dr Mesnard’s work was extensively covered in a number of international media outlets and televised debates.

Following on from her public appearances, Dr Mesnard was invited by the Chief Economist of the UK Home Office to present her research to analytical and policy officials.

Dr Mesnard’s work on the legalisation of cannabis was presented to policy makers from the US, Canada and France.

The Council of Economic Advisors (CAE) commissioned a policy paper by Dr Mesnard and co-authors Pr Auriol and T Perrault on how to set the price of legal recreational cannabis in France. This features in the CAE report on cannabis legalisation, which was presented to the French Prime Minister and secretaries of State after receiving significant press coverage.

As a result, Members of the French National Assembly are currently debating the options for and implications of legalising cannabis including the policy mix designed by the team and have set up an ‘Information Parliamentary Mission’ to consult the general public about it.