The Dutch Answer to Drug Tourism Within Southern Dutch Municipalities An assessment of the 2012 revised drug policy

Kirin Pepijn Moonen

No 102, DSSR Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: The Netherlands has since the 1970s focused on decriminalizing to address the issue of drugs within society. As a result of implementing this decriminalization policy, commercial establishments called coffee shops quickly appeared afterwards to meet market demand for marijuana within the Netherlands. The growth of this newly established marijuana industry was tolerated by the Dutch government leading to an eventual regulatory framework of the AHOJ-G criterion. However, even with the framework in place, the number of tourists seeking to experience marijuana continued to exponentially increase leading to issues of drug tourism and other associated nuisances. In 2012, the Dutch government selected three provinces in the South of the Netherlands where marijuana would no longer be sold to non-residents in order to stymie drug tourism. Qualitative studies on this issue found that there was a significant reduction in drug tourism as a result of implementing the policy in 2012 but was coincided with a rise in illicit drug activity due to the legal purchase channel being shut-down for non-residents. The aim of this study is to analyze the impact of the 2012 sales restriction on coffee shop municipalities within these three provinces and the subsequent economic impact on local firms. Propensity score matching was used to create a control group of coffee shop municipalities that were similar to the treated coffee shop municipalities on the basis of observed characteristics with socio-economic data from the public Statline database maintained by the Dutch Statistics Bureau. Several robustness checks were conducted to ensure the validity of the matching procedure. The difference-in-difference model used municipal drug crime data from the Statline database for the years 2009 to 2014 to analyze the impact on committed drug crimes. Findings revealed that the policy did not have a significant impact on drug crimes within treated areas even after controlling for municipal characteristics. Placebo test of the policy presented that the policy had a lagged treatment effect which can be attributed to the sharp increase in illicit drug market activity in 2012 due to policy disrupting the legal purchase channel of marijuana. Therefore, this study shows that even though prior literature cites that drug tourism was significantly reduced, limiting sales to residents did not lead to an increase in either soft- or hard drug crimes indicating that the policy had an overall beneficial impact on reducing illicit drug market activity

Pages: 41 pages
Date: 2019-10
New Economics Papers: this item is included in nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:toh:dssraa:102

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