Economic Development, Restructuring and the Illicit Drug Sector in Bolivia and Peru: Current Policies

Economic development under a capitalist market economy is usually not a smooth process. In addition, restructuring the economy with the aim of promoting a freer market economy often entails high economic costs as well. This article has two goals: (1) it will outline the inter-relationship between the restructuring of the economy now taking place in both Bolivia and Peru and how this process is affected by the illicit coca drug sector in each of those countries; and (2) it will discuss the domestic anti-drug policies in each and how, or to what extent, these are affected by the anti-drug policies of the United States. On the one hand, the illegal drug industry may have served to ameliorate the costs of restructuring; at the same time, it may also have made economic adjustment somewhat more difficult.