2009 the Study of Public Expenditure on Drugs, A Useful Evaluation Tool for Drug Policy, The Belgian Example_18p

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The study of public expenditure on drugs, a useful evaluation tool for drug policy, the Belgian

example

Paper prepared for the Third Annual Conference of the International Society for the Study of Drug

Policy, March 2-3, 2009.

Freya Vander Laenen and Brice De Ruyver 1

1. Introduction

Since the 1990’s, evaluation of policy and policy programmes has become increasingly important in

western societies (Leeuw, 2005). Evaluation has been executed amongst other things in drug policy.

An essential step within the evaluation of drug policy is the estimation of public expenditure, since it

enables us to evaluate the commitments of governments in the drug policy field.

The US and Canada already have a long tradition in studying public expenditure on drugs. The

importance of this research theme is increasingly recognised in Europe, on a political and on ascientific level.

In June 2000, the EU action plan on drugs of 2000-2004 stated that evaluation was to be an

integral part of the European approach to the drug phenomenon and that the European Monitoring

Centre for Drugs and Drug Addiction (EMCCDA) should be an important contributor to this

evaluation. Since 2001 the EMCDDA has underlined the importance of studies on public expenditure

on drug policy in the EU member states. In the most recent EU- action plan on drugs of 2005-2008 the

estimation of public expenditure has become one of the special points of interest. In 2008, drug-

related public expenditure was one of the selected issues completing the Annual report on the state of

the drug problem in Europe (EMCDDA, 2008).

The first studies on public expenditure on drugs were published in Sweden (Ramstedt, 2002)

and Luxembourg (Origer, 2002). Since then, studies in the Netherlands (Rigter, 2003), Belgium (De

Ruyver et al., 2004; 2007) and France (Kopp & Fenoglio, 2006) have followed.Parallel to the studies of national public expenditure, some studies have tried to compare the public

expenditure on drugs in all the EU member states (Kopp & Fenoglio, 2003; Postma, 2004). In 2004,

Reuter, Ramstedt and Rigter proposed guidelines for the estimation of public expenditure on drug

policy throughout the EU.

It has become clear that studying public expenditure and comparing both the methodology and

the results of existing studies is challenging. In the existing studies, the definition of public

expenditure and consequently the subject of analysis and methodology applied differs. In addition, the

study of public expenditure is complicated further because confusion exists between the public

expenditure studies and studies on the social cost of the drug phenomenon. To overcome these

methodological difficulties, the EMCDDA is stimulating the development of a uniform and

comparable methodology that allows for the estimation of public expenditure on drug policythroughout the EU. To this end, in December 2007, an expert meeting was organised by the

EMCDDA.

The aim of this paper is to untangle the existing confusion with regard to public expenditure

studies. To this end, public expenditure studies are reviewed in terms of the concepts and

methodologies used. Public expenditure and social cost models are compared to determine the scope

of both concepts. It will elaborate on a workable methodology for estimating public expenditure on

drugs and as such might stimulate the development of evidence-based policies.2 The study of public

expenditure is illustrated by presenting some results of a study on public expenditure on drugs

undertaken in Belgium.3

1

Department of Criminal Law and Criminology, IRCP, Ghent University, Ghent, Belgium.2 For these aspects, the paper is based upon a contribution in the Gofs Research Paper Series. See: Van

Malderen, Vander Laenen & De Ruyver, 2009.

1



2. Method

The objective of this study was to clarify the concept of public expenditure and to examine existing

methodologies to calculate public expenditure on drug policy. To this end, studies dealing with the

estimation of public expenditure were searched by consulting search engines and scientific on-line

databases. The database of the Web of Science, Pubmed and Sociological Abstracts was consulted as

well as the database ALEPH of the University of Ghent. In addition the website of the European

Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and the website of the World Health

Organisation (WHO) were searched. The search was not limited to specific countries but aimed at

identifying the existing scientific studies on the subject. The terms ‘public expenditure’, ‘public

expenditure study’, ‘public expenditure drugs’, ‘public expenditure on drug policy’, ‘social cost’,

‘social cost study’, ‘social cost of drugs’ were used to screen the databases. Time periods were not

determined. The screening was not limited to studies conducted in a certain period over time.

Moreover, authors of the identified studies were personally contacted to clarify specific conceptual or

methodological aspects and to ask them for additional references of existing studies.

The search action was primarily concentrated on public expenditure studies. Social cost

studies were screened as well since the calculation of public expenditure is an integral part of a socialcost analysis. By exploring social cost studies it becomes possible to examine to what extent the scope

of public expenditure is related to social cost. In that way the concept of public expenditure can be

specified and clarified more thoroughly. Only the most cited social cost studies were used since the

estimation of the social cost of drugs is a strongly explored research field, many studies have been

conducted (Choi, 1997) and a review of all the social cost studies would go beyond the scope of this

study.

3. Analysis of public expenditure studies

The search action resulted in the identification of 10 studies on public expenditure (De Ruyver,

Casselman, & Pelc, 2004; De Ruyver et al., 2007; Kopp & Fenoglio, 2003; Kopp & Fenoglio, 2006;Moore, 2005; Origer, 2002; Postma, 2004; Ramstedt, 2002; Reuter, Ramstedt, & Rigter, 2004; Rigter,

2003) and 12 studies on the social cost of drugs (Single, 1995; Kopp & Palle, 1998; Single, Robson,

Xie, & Rehm, 1998; Bruckner & Zederbauer, 2000; WHO, UNDCP, & EMCDDA, 2000; Collins &

Lapsley, 2002; Garcia-Altés, Olle, Antonanzas, & Colom, 2002; Godfrey, Eaton, Mcdougall, &

Culyer, 2002; Kopp & Fenoglio, 2002; ONDC, 2002; Single et al., 2003; IADACC, 2007).

3.1. Conceptual framework

On the basis of the review of public expenditure studies and social cost studies it becomes

clear that there is no common understanding of the meaning of ‘public expenditure’ and ‘social cost’.

In fact, several concepts are used. Very different concepts are used interchangeably or the sameterminology is used, yet with definitions and interpretations that can differ widely (Postma, 2004).

Definition of public expenditure in reviewed studies

To explain the term public expenditure, different concepts and definitions are used in literature.

Kopp & Palle (1998), Kopp & Fenoglio (2006, p.3) and Origer (2002, p. 6) refer to

expenditure emanating from the public authorities and used for the different policy sectors in drug

policy (law enforcement, treatment, prevention).

3 A first study on public expenditure was executed between 2001 en 2003 (De Ruyver et al., 2004). To refine the

methodology used, aimed at collecting more detailed data and to develop a methodology usable and comparableat EU-level, a follow-up study on public expenditure was executed between 2005 and 2006 (De Ruyver et al.,

2007).

2



Kopp & Fenoglio (2000, p. 16; 2003, p. 23) and De Ruyver et al. (2007, p. 31) refer to the

‘drug budget’ as a synonym of public expenditure on drug policy.

Both authors (Kopp & Fenoglio, 2003; De Ruyver et al., 2004; 2007) stress the importance of

taking into account the different levels of competence (federal, regional, local) when estimating public

expenditure as in every country the division of competences in the field of drug issues differs and is

spread over different policy domains (epidemiology, prevention, treatment, law enforcement and

others).

The direct nature of public expenditure is the key element in the definition of public expenditure (De

Ruyver et al., 2007, De Ruyver et al., 2004; Postma, 2004; Origer, 2002; Ramstedt, 2002).

Such expenditure can be described as expenditure expressly and directly ‘labelled’ for drug policy

actions. Although Postma (2004) and Origer (2002) also refer to the direct nature of public

expenditure, the former includes cost-of-illness while the latter explicitly excludes expenditure related

to indirect consequences.

The definition of Moore (2005) corresponds with the abovementioned definitions of Origer (2002),

Ramstedt (2002), De Ruyver et al. (2004), Postma (2004) De Ruyver et al. (2007); yet Moore uses a

different terminology. He uses the term ‘proactive expenditure’ to refer to the direct nature of publicexpenditure. Such proactive expenditure corresponds with the direct expenditure referred to by the

other abovementioned authors. Moreover, Moore (2005) explains the direct nature of public

expenditure by referring to explicit policy commitments .

The public expenditure study of Moore also includes spending associated with the consequences of

drug use. Moore calls this expenditure ‘reactive expenditure’. To define this expenditure he refers to

drug-related crime and spending on health as a result of drug use. More specifically he refers to the

cost of ambulance attendance at overdose, offences due to drugs and other consequences such as social

security allowances and road accidents under the influence of drugs. The argument for including

reactive expenditure is that besides the expenditure with the clearly stated objective of reducing drug

use, the public authorities also spend resources on the consequences of drug use (Moore, 2005).

In the social cost study of Godfrey et al. (2002, p. 1) the terms proactive expenditure and reactive

expenditure are also used to define public expenditure.

Based on these definitions, it becomes clear that no consensus exists about the scope of the concept of

public expenditure. Public expenditure can be understood as spending on policy actions directly aimed

at dealing with the drug problem. In this definition, expenditure as a result of drug use will be

excluded since this spending has nothing to do with a specific policy action. Expenditure on the

consequences of drug use can be included though, not because this expenditure is direct, but because

ultimately the public authorities are the funding sources.

Public expenditure studies that include spending on the consequences of the drug problem are

rather scarce. The study of Moore (2005) is the sole study that includes the consequences of the drug

problem in the definition of public expenditure.

Ramstedt (as cited in Reuter, 2004), Rigter (as cited in Reuter, 2004) and Postma (2004) do include

consequences of the drug problem, but to a smaller extent than Moore (2005). Postma (2004) includescost-of-illness for drug-related diseases in his analysis.4 In the studies of Ramstedt (2002) and Rigter

(2004) expenditure relating to the consequences of the drug problem are limited to drug-related crime

such as theft, robbery, traffic offences and treatment. Nevertheless Ramstedt (2002) underlines that the

inclusion of these categories implies a broader interpretation of public expenditure.

Reuter et al. (2004, p.2) raise the question as to whether expenditure directed at the reduction

of the consequences of drug use should be included in a public expenditure study next to an estimation

of proactive expenditure. This issue is indeed of importance because it will determine whether only

violations of drug laws or also drug-related crimes will be included in any estimation of expenditure

on law enforcement.

4

Diseases related to drug use: anaemia, infections of bone, skin and joints, CNS-infections, such as meningitis,chronic liver disease, endocarditis, heart disease, hepatitis, HIV and other retrovirusses, mental disorders,

bacteremia, respiratory disease, STDs, TBC

3



Focussing on the direct nature of public expenditure implies that other spending resulting from the

drug problem but which is not direct public expenditure is beyond the scope of a public expenditure

study.

All the public expenditure studies examined exclude to a certain degree private expenditure

and external expenditure. The concepts of private expenditure and external expenditure as such are

not always featured in the studies. When analysing their methodologies though, it becomes clear that

reference to such expenditure is indeed made albeit implicitly (Origer, 2002; Kopp & Fenoglio, 2003;

De Ruyver et al., 2004; Postma, 2004; Reuter et al., 2004; Kopp & Fenoglio, 2006; Ramstedt, 2006;

Rigter, 2006; De Ruyver et al., 2007). Only some studies explicitly mention the degree to which this

expenditure is in- or excluded and list types or examples of private or external spending. Most studies

merely indicate in a general way that this kind of expenditure is beyond their scope. Kopp & Fenoglio

(2006), De Ruyver et al. (2004, 2007) Kopp & Palle (1998) explicitly refer to the concepts of private

expenditure and external expenditure.

The non-public nature of private expenditure is stressed to define this type of spending and to

differentiate it from public expenditure. Expenditure by drug users is defined as private expenditure

although Kopp & Fenoglio (2006) explicitly exclude spending intended for purchasing drugs in a

subsequent study. The logic for this exclusion is that the authors assume that if drug use was non-

existent, individuals would spend their money on something else.To define external expenditure reference is made to the source of the expenditure. Expenditure borne

by the community is external expenditure, expenditure borne by public authorities is public

expenditure.

Other authors refer rather implicitly to private and external expenditure by stating that the

various governmental agencies and the drug budget spent by public authorities are the key elements

and that consequently, expenditure that goes beyond calculating the drug budget are excluded (Reuter

et al., 2004; Kopp & Fenoglio, 2003; Rigter, 2003; Ramstedt, 2002).

Postma (2004, p.9-11) uses the concept “private costs/expenditures” to explain that

“expenditures for the drug user or others” are left out of his analysis. He does not use the concept of

external expenditure but gives an enumeration of ‘costs’ that are not included in his public expenditure

analysis. These costs are related with the consequences of drug use like costs arising from

unemployment, disease or mortality due to drug use. Needless to say, using the concept of cost next tothe concept of expenditure does not simplify matters.

Besides public expenditure, private expenditure and external expenditure, four studies (Kopp &

Fenoglio, 2002, p.23-24; Kopp & Fenoglio, 2003, p.26-27; Moore, 2005, p. 6; Postma, 2004, p.9-11)

explicitly refer to transfer payments as not being part of a public expenditure analysis. Kopp &

Fenoglio (2002, p. 24; 2003, p. 26-27) refer to transfers of social security. Postma (2004, p.12) refers

to taxes, welfare payments, property transfer through thefts and fines. The authors state that these

transfer payments are not an expenditure reflected in the drug budget and are therefore should not be

regarded as public expenditure.

Moore (2005, p. 6) points out that welfare payments and revenues (e.g. income tax) are not quantified,

not because such expenditure is beyond the scope of the public expenditure analysis but simply

because they are too difficult to estimate for illicit drugs.According to Kopp & Fenoglio (2003, p.26) this different appraisal of transfer payments can be

explained because of a difference in approach. The Anglo-Saxon approach would not only take into

account the “budgeted expenses but also the total expense of transfers and notably those of social

security”. The approach in French studies and in studies of other European countries is limited to

expenditure from public authorities and appearing in their drug budgets. Transfer payments are not

public expenditure since the they are borne by society as a whole (Kopp & Fenoglio, 2002). David

Collins illustrates this difference in approach by giving the example of sickness allowance. Sickness

allowance is an expenditure made by the public authority but is an income transfer from taxpayers to

the drug user leaving the total community income unchanged.5

5

Email communication with D. Collins, Professor and author of the study on the social cost of drug abuse inAustralia and co-author of the International Guidelines for Estimating the costs of substance abuse, November,

28, 2007.

4



Definition of social cost in reviewed studies

The concept of social cost can be defined in several ways. Agreement seems to be lacking on the type

of costs included or excluded from a social cost analysis and the methodology used to estimate these

social costs (Single et al., 2003).

It is clear that the social cost of drug use is “an estimate indicating the resources which have become

unavailable to the community because of drug use, and which could be used elsewhere if the drug

problem was suppressed” (Single et al., 2003, p.28-29). The concept of social costs refers to the

overall costs borne by society due to the existence of the drug phenomenon. Social costs include costs

caused by the demand as well as the supply side regardless of the source from which the cost stems

(private and public) (Kopp & Fenoglio, 2000). The perspective of society and not the perspective of

the public authorities is the point of departure.

Confusion exists about the used terminology. While Kopp and Fenoglio (2002, p.23) state that a social

cost is the sum of private costs, public expenditure and external cost, Single et al. (1998) define a

social cost as the sum of the private and external costs. Nevertheless, in Single’s definition, public

expenditure is included but defined as part of external costs.

Garcia-Altes (2002, p. 1146-1147) defines social cost by referring to direct costs and indirect costs.

These costs together constitute the social cost. Direct costs can be regarded as all costs that have adirect link with illegal drug use such as health care costs, prevention and research directly attributable

to illegal drug consumption. Indirect costs can be regarded as all costs indirectly linked with drug use

such as loss of productivity due to the mortality and the hospitalization of patients.

Social cost studies can also differ with regard to the inclusion of expenditure for the purchase

of drugs. Some social cost studies exclude expenditure made by drug users because these studies

depart from a cost-of-illness (COI) point of view. Private costs are then defined as costs borne by

private agents (individuals and organisations). The cost of purchasing drugs is not at the expense of

society since this expenditure would be spent on other goods or services if drugs did not exist.

Other social cost studies, however, include expenditure on the purchase of drugs. These studies start

from an economic theory approach and include both expenditure from the private sector, as well as the

expenditure of the drug user on the purchase of drugs (Kopp & Fenoglio, 2000).

The inclusion of tangible or intangible costs is another issue that arises in social cost studies.“Tangible costs measure monetary losses (such as lost earnings), whereas intangible costs put a

money value on subjective injury (pain and suffering, for example)” (Kopp & Fenoglio, 2002, p. 101).

In other words, tangible costs can be measured, while intangible costs cannot be measured in concrete

terms. The estimation of pain for instance is dependent on a subjective judgement, while the cost of

lost income due to drug use can be measured in a objective manner.

Single et al (2003, p.19) define tangible cost as “those costs which, when reduced, yield resources

which are then available to the community for consumption or investment purposes. Intangible costs

are defined as “costs, which include pain and suffering, when reduced or eliminated do not yield

resources available for other uses”.

Intangible costs are not always measured in public expenditure studies since it is difficult to place a

value upon them. Moreover, no internationally agreed procedure exists for measuring these costs

(Kopp & Fenoglio, 2002; Single et al., 2003).

In public expenditure studies, public expenditure is defined by referring to the social cost of the drug

problem. In these studies, a public expenditure analysis is distinguished from a social cost analysis and

public expenditure is considered to be one element of the total social cost of the drug problem. Public

expenditure, together with private and external expenditure then constitute the total social cost of

drugs in a given society (De Ruyver et al., 2007; Kopp & Fenoglio, 2006; De Ruyver et al., 2004;

Postma, 2004; Kopp & Fenoglio, 2002; Origer, 2002; Kopp & Fenoglio, 2000; Kopp & Palle, 1998).

Social cost studies can be used as a starting-point for the analysis of public expenditure,

although, in general it is not possible to extract the specific results for public expenditure.

Since public expenditure is included in a social cost analysis, one might wonder whether social cost

studies can be used to isolate the amount of public expenditure. One has to be aware of the fact that a

social cost study uses a different approach and is based on a different methodology (Reuter et al, 2004,

p.25; Moore, 2005, p.6).

5



At best, expenditure is presented according to the competent public authority from where it stems

alongside information specifying to what ends it is used, e.g. ministry of justice expenditure on

judicial services (Kopp & Fenoglio 2000; Kopp & Fenoglio, 2002). In this case, the results of the

study need to be structured so that it becomes clear what policy purposes the expenditure is intended

for and insight can be gained into the public authorities' policy mix.

In the other reviewed social cost studies (Bruckner & Zederbauer, 2000; Collins & Lapsley, 2002;

Garcia-Altés et al., 2002; Godfrey et al., 2002; Kopp & Palle, 1998; ONDCP, 2002; Single et al.,

1998) public expenditure cannot be extracted. A different methodology is used and social cost is

presented as a whole, without separating the different types of expenditure which comprise it.

Moreover, the term public expenditure is not always used so that it is even more difficult to analyse

which types of spending correspond with public expenditure (Godfrey et al., 2002).

It is possible to use estimates of a social cost analysis for the analysis of public expenditure.

In the social cost study of Collins & Lapsley (2002) the expenditure concerning the different chains of

the criminal justice system at both federal and state level on police, courts and prison is calculated,

based on the accounts of the respective institutions. The figures or estimates can be used as a start to

calculate expenditure of the public authorities. One has to be cautious when using estimates of a social

cost study and pay attention to the definition of public expenditure that is used by analyzing which

areas of spending are included. Collins & Lapsley (2002) have included a separate section dealingwith budgetary implications on federal and state level but also take into account expenditure arising

from loss of income and as a result of early death caused by drug use.

The social cost study of the Office of National Drug Control Policy (2002) and Single et al. (1998)

separately present estimates of public costs such as costs on the criminal justice system. These public

costs are based on the percentage of violations of drug laws as well as the percentage of offences that

are attributable to drug use. These analyses are more extensive than those which attempt only to

calculate the drug budget.

Definition of public expenditure

It is important to be clear about the conceptual framework used when estimating public expenditure. It

is equally important to define which areas of expenditure lie within and beyond the scope of a publicexpenditure study and to draw the distinction between public expenditure and social cost. Therefore a

proposed definition is presented to determine the scope of the concept of public expenditure.

The drug phenomenon is multidimensional, consisting of many aspects ranging from health

(epidemiology, prevention, treatment) and legal problems, drug-related crime and security issues (use

of drugs in traffic, drug-related public nuisance) to economic problems (loss of productivity,

absenteeism on the work floor). All these different problems bring costs for the individual and the

community (De Ruyver et al., 2004). A part of these costs is borne by the public authorities

responsible for the different policy areas in the field of drugs. Therefore, the source of where the

expenditure stems from has to be identified when one wants to define public expenditure.

The key element in public expenditure is the public authorities’ financial contribution to the

drug policy (Kopp & Palle, 1998; Origer, 2002; Kopp & Fenoglio, 2006; De Ruyver et al., 2007). Thisimplies that a public expenditure analysis proceeds from the perspective of the different public

authorities who are competent for the respective aspects of the drug policy. The public expenditure

perspective is more limited than the societal perspective where the analysis proceeds from the

perspective of society as bearer of the total cost of the drug problem (De Ruyver et al., 2007; Postma,

2004).

A public expenditure study is solely focussed on public funding. The ‘drug budget’ of the

public authorities at each differing level of competency is analysed (Kopp & Fenoglio, 2000, 2002,

2003; De Ruyver et al., 2004, 2007).

Depending on the state structure, expenditure from the federal government as well as the expenditure

of regional, provincial, municipal authorities and associated public services has to be included (Kopp

& Fenoglio, 2003; De Ruyver et al., 2004; De Ruyver et al., 2007).

6



Since a public expenditure study is limited to spending by public authorities identifiable in their public

budgets (Kopp & Fenoglio, 2002; De Ruyver et al., 2004, 2007), the direct nature of public

expenditure is emphasised.

The forms of spending analysed in a public expenditure study are direct expenditure.

Public expenditure is defined as investments or budget lines of public authorities on actions expressly

and directly ‘labelled’ for drug policy actions (De Ruyver et al., 2004, 2007).

Public expenditure is spending on, amongst other things, street corner work, prevention work, drug

treatment and guidance for drug users, expenditure for the control of violations of drug legislation by

police, customs and judicial authorities, expenditure for drug coordinators and spending on research.

In all of the reviewed studies, these forms of direct expenditure are included in the analysis.

Expenditure related to the consequences of drug use are excluded in a public expenditure

analysis (Origer, 2002, De Ruyver et al., 2004, Kopp & Fenoglio, 2006; De Ruyver et al., 2007).

These non-included expenditure are external expenditure.

Two categories of external expenditure are distinguished: (1) external expenditure not explicitly aimed

drug policy actions but which indirectly supports the drug policy (e.g. expenditure on drug-related

crime such as theft and spending on drug-related treatment such as treatment of infections by

contaminated needles); (2) external expenditure arising from loss of productivity and absenteeism on

the work floor.Alongside external expenditure, private expenditure is also excluded from a public

expenditure study. Private expenditure is the spending of individuals and private organisations, such as

the expenditure of drug users and expenditure of charity funds (De Ruyver et al., 2004; Rigter, 2004;

De Ruyver et al. 2007).

Public expenditure is one element of the social cost of the drug problem. Together with private and

external expenditure, they constitute the total social cost of drugs in society.

Social cost is defined as the sum of public expenditure, private expenditure and external expenditure

(Kopp & Palle, 1998; Kopp & Fenoglio; 2002; Origer, 2002; De Ruyver et al., 2004; Kopp &

Fenoglio 2006; De Ruyver et al., 2007).

Table 1 Public expenditure, private expenditure, external expenditure and social cost6

Public expenditure+ Private expenditure+ External expenditure =Social cost

Direct expenditure by publicauthorities on drug policy actions.

E.g. street corner work, preventionwork, drug treatment and guidance

for drug users, reintegration programmes (employment) for

(former) drug users, expenditurefor personnel such as policemen

working in drug investigationunits, customs officers specialised

in drug trafficking and magistratesdealing with drug cases,

expenditure for drug coordinators,expenditure on research, yearlyfinancial contribution to the

Pompidou Group of the Council of Europe.

Expenditure of individualsand private organisations.

E.g. expenditure of drugusers, expenditure made by

private organisations nonsubsidised by public

authorities, expenditure of charity funds.

Expenditure related to theconsequences of drug use.

E.g. expenditure on drug-related nuisance, drug-related

crime such as theft, robbery,traffic offences committed by

drug users, expenditure on thetreatment of infections by

contaminated needles,treatment of illness due to drug

use such as aids and hepatitis,expenditure due to loss of

productivity, absenteeism onthe work floor.

Total of expenditure on the

drug problem at theexpense of the

community

In the presented definition a public expenditure study is limited to direct expenditure. External

expenditure - defined as spending related to the consequences of drug use – and private expenditure

are excluded from the analysis.

All the reviewed studies include direct public expenditure in their analysis. Some studies use a broader

definition of public expenditure and include one or more forms of spending related to the

6 Based upon Kopp and Palle (1998), Kopp and Fenoglio (2000, 2002, 2006) and additional examples included

7



consequences of drug use, cf. external expenditure (Kopp & Palle, 1998; Ramstedt, 2002; Kopp &

Fenoglio, 2003; Postma, 2004; Reuter et al., 2004; Rigter, 2004; Moore, 2005). For these authors,

public expenditure also includes external expenditure.

Estimating public expenditure on the consequences of drug use requires an additional study. Such

expenditure is not identifiable in the public drug budget. Studies focussed on the estimation of drug-

related aspects would have to be consulted. The results of these studies can be added to (or presented

next to results of the direct expenditure analysis) . In that way, insight is gained into the overall

expenditure borne by public authorities (cf. infra).

3.2. Methodological framework

Methodological approaches in reviewed studies

To estimate public expenditure one has to take different methodological steps.

The first step is to define the scope of the analysis whereby the choice is made to solely focus on illicit

drugs or to make estimates of public expenditure on drugs regardless of their legal status. In addition,

one must decide whether only expenditure exclusively used for drug policy will be included in theestimate or whether expenditure intended for broader policy domains are included as well so that a

fuller picture of total public expenditure on drug policy can be obtained. The latter requires additional

calculations based on a repartition key or unit expenditure to isolate these areas of spending since they

cannot simply be extracted from the budget.

The second step consists of identifying the major players responsible for drug policy and the

classification of public expenditure.

To classify public expenditure it is necessary to identify the competent authorities in order to establish

where the expenditure is coming from.

To know for which ends public expenditure is used, expenditure needs to be classified according to the

different drug policy sectors.

In the following section the different methodological steps are explained based on the reviewed

studies. This exercise again shows that the steps taken and the choices made differ between studies.

Step I: Defining the research scope

In most of the reviewed social cost studies licit drugs are addressed next to illicit drugs (Single, 1998;

Hein & Salooma as cited in Postma, 2004; Kopp & Fenoglio, 2000; Kopp & Fenoglio, 2002; Collins

& Lapsley, 2002; ONDCP, 2002). The study on the social cost of drugs in Spain (Garcia-Altés, 2002)

and the study on the social cost of drugs in Austria (Bruckner & Zederbauer, 2000) are limited to illicit

drugs. The study of Godfrey et al. (2002) includes illicit drugs and methadone.

In the reviewed public expenditure studies, the research scope is limited to illicit drugs (Kopp

& Palle, 1998; Origer, 2002; Ramstedt, 2002; Kopp & Fenoglio, 2003; De Ruyver et al., 2004;Postma, 2004; Reuter et al., 2004; Rigter, 2004; Moore, 2005, De Ruyver et al., 2007). Only the study

of Kopp & Fenoglio (2006) is focused on alcohol and tobacco as well.

There are good arguments to broaden the scope to licit drugs in public expenditure studies

(EMCDDA, 2006) so that insight can be gained into all expenditure on drugs regardless of their legal

status. In the first place the drug phenomenon is considered as a health problem where the distinction

of legal versus illegal drugs is only relevant from a juridical-criminological point of view.

Moreover, Kopp and Fenoglio (2006) found that most public expenditure is spent on illicit drugs,

rather than on alcohol and tobacco. When calculating the total cost of drugs at the expense of society,

studies show that only a small part of the costs relate to the problem of illicit drugs. For the greater

part, costs are linked to the alcohol problem, followed by tobacco and finally by illicit drugs (Single,

1995; Kopp & Fenoglio, 2000; Single, 2001).

8



When estimating public expenditure on drug policy, one has to realise that such expenditure is

often embedded in policy projects with broader objectives. Therefore, it is important to look beyond

the expenditure exclusively used for drug policy and also include spending intended for broader policy

domains. For example, in the budget of the Ministry of Justice, the expenditure component intended

for dealing with drug offences has to be isolated from the total budget spent on the criminal justice

system (Kopp & Fenoglio, 2002, p. 49-50; Kopp & Fenoglio, 2003, p. 23).

Kopp and Fenoglio (2003, p. 23) and the EMCDDA (2007) use other terms to refer to

expenditure exclusively used for drug policy and the expenditure intended for broader policy domains

but the terms used are analogous. Kopp and Fenoglio (2003) use the term ‘direct’ and ‘indirect

expenditure’, while the EMCDDA (2007) refers to ‘labelled drug-related expenditure’ and ‘non-

labelled drug-related expenditure’.

All the reviewed studies attempt to estimate these two types of public expenditure. Nevertheless,

all studies emphasise the difficulty in calculating expenditure which is embedded into a broader

budgetary structure (Reuter et al., 2004). Furthermore, data on such expenditure requires a detailed

study.

Step II: Identifying major players responsible for drug policy

In a public expenditure study insight is needed into where the expenditure stems from. To this end

the major players involved in drug policy have to be identified.

The following step in the public expenditure estimation process is the identification of the

public authorities competent for aspects of the drug policy. This is of importance since in every

Member State the configuration of competences in the field of drug issues differs (Kopp & Fenoglio,

2003; De Ruyver et al., 2004, 2007).

Research on public expenditure cannot be dissociated from the specific state and governmental

structure (De Ruyver et al., 2004, 2007). The public authorities, public services and subsidised private

actors (NGO’s) responsible for the policy areas on the different competency levels have to be

inventoried.

In general, studies take into account their own specific state and governmental structure andanalyse the expenditure on drug policy of the different public authorities responsible for the policy

areas. In sum, only those competency levels involved in drug policy and investing in drug policy are

included.

Next to the identification of the public authorities involved in drug policy, the organisations

working in the drug field can also be identified. The identification of these organisations makes it

possible, in the next step, to collect information on the financial means of the private (NGO’s) and

public organisations and the public authority responsible for their payment. Only the study of Kopp

(2003) and the study of De Ruyver et.al. (2004, 2007) also identify those organisations.

Step III: Collection of data: top-down and bottom-up approach

When insight is gained into the sources of the expenditure, one can start collecting data on

budgets. To collect budgets, two methods of analysis are used: a top-down approach and a bottom-up

approach.

De Ruyver et al. (2004, 2007) and Postma (2004) explain the top-down approach as a method that

starts from the resources or overall budgets made available by the different public authorities involved

in the drug policy. First, the public authorities have to be identified. Then, the data on the public

authorities’ drug budgets are collected and analysed. This top-down approach starts with an analysis of

the budget lines of the public administrations.

The second method of analysis is the bottom-up approach. De Ruyver et al. (2007, p. 41) refer to the

bottom-up approach as an approach that “starts from the activities in the work field and traces the

money flow back to the public authorities funding”. The organisations working in the drug field have

to be identified first after which, rather than analysing documents relating to the drug budget, data are

examined on the basis of the means of the private (NGO’s) and public organisations and other yearly

9



reports, complemented by questionnaires and interviews with these organisations (De Ruyver et al.,

2004, 2007).

By reviewing the existing studies, it becomes clear that studies differ concerning the approach used to

data gathering. Most of the public expenditure studies apply a top-down approach and thus only

identify the public authorities and not the organisations working in the field. The only study that is

exclusively bottom-up is the study of Kopp (2003). The data therein were gathered through specialised

institutions and by contacting researchers (Kopp, 2003, p. 23). The Belgian studies (De Ruyver et al.,

2004, 2007) are the only studies which combine both approaches. The advantage of this double

method is that it makes verification possible; the data gathered on the basis of the top-down approach

can be double-checked and completed with the data retrieved from the project actors in the field.

Step IV: Classification of public expenditure

The classification of expenditure is needed to gain insight into the sources and purpose of the

expenditure. Agreement concerning this classification is also necessary to enable international

comparisons to be made.

The identification of public authorities involved in drug policy has to enable the classification of

public expenditure based upon the source where the expenditure is coming from. After this exercise,

public expenditure has to be classified according to the different sectors in drug policy.

As an example, in the Dutch study of Rigter (as cited in Reuter et al., 2004), the major players in drug

policy in the Netherlands identified are: the thirteen ministries of the national government, the

municipalities at the local level, addiction care and treatment centres, social inclusion services,

municipal health services, additional (small) addiction care organisations, general health care, the

Trimbos Institute (National centre of excellence concerning mental health and addiction in the

Netherlands) the national drug monitor, prisons, probation foundation and the national funding agency

for health research and health care research.

The question in public expenditure studies is how much the public authorities are spending on the drug policy and for which ends such expenditure is used. Public expenditure studies reveal the existing

activities and policy approaches and can evaluate whether the policy intentions are actually reflected

in the drug budget. Therefore, it is essential to classify public expenditure based upon the purpose

which the expenditure is intended for (Reuter et al., 2004).

In the public expenditure studies of Ramstedt (2002), Rigter (2003) and Reuter, Ramstedt and Rigter

(2004) expenditure is classified into the conventional drug policy areas or sectors: ‘prevention’,

‘treatment’, ‘harm reduction’ and ‘law enforcement’. Postma (2004) and Moore (2005) both make use

of the sectors prevention, treatment and enforcement for the classification of public expenditure but

also create an additional sector. Postma (2004) includes a sector of expenditure on the cost of illness

whilst Moore (2005) creates an additional sector ‘interdiction’. The study of Kopp and Fenoglio

(2003) makes a classification of expenditure based on spending directed to health related issues andexpenditure directed to enforcement. The study of Origer (2002) classifies public expenditure based

on spending for demand reduction and harm reduction, expenditure for supply side reduction,

expenditure for research and finally expenditure for the EU drug budget. In this study no explicit use is

made of a classification system based upon the four conventional sectors of drug policy, but the study

contains all forms of public expenditure that correspond with these conventional sectors. In the study

of De Ruyver et al. (2004, 2007) the sectors of prevention, treatment and law enforcement are used to

classify public expenditure. Expenditure on harm reduction is not presented as an independent sector

but allocated to the sector ‘treatment’. Rigter (as cited in Reuter et al., 2004) underlines that harm

reduction is difficult to define and that some of the policy actions included in the sectors of prevention

and treatment overlap with the harm reduction sector. Moreover, it is not always feasible to separate

harm reduction aspects from a treatment programme (Reuter, 2006). This is, for instance, the case for

low threshold methadone maintenance programmes. The reason that a harm reduction sector would

not be separately studied is found in the drug policy aims or intentions of the public authorities. As in

10



Belgium, there is no expenditure explicitly intended for the reduction of drug-related harms (De

Ruyver et al., 2004; 2007). Nonetheless, this does not imply that specific harm reduction programmes

are non-existent but rather indicates that the public authorities do not explicitly refer to the finality of

harm reduction.

In the Swedish drug budget for example, (Ramstedt, 2006) no data on harm reduction as such is

available since the aim of a drug free society is pursued, and consequently, harm reduction as an

outcome is explicitly rejected. Again, this does not imply that specific harm reduction programmes are

non-existent. The spending on methadone treatment and needle exchanges are not labelled as harm

reduction but are included in the expenditure on treatment. Despite official policy, Ramstedt (2006)

did in fact isolate this expenditure from the budget and presented it in a separate harm reduction

sector.

In the Luxembourg study (Origer, 2002), the classification of expenditure into the

conventional drug policy areas is not used. Expenditure is presented as spending on the supply side

(repression), expenditure for demand reduction and drug-related harms, expenditure on research and

expenditure for international organisations.

In the study of Kopp and Fenoglio (2003) the only distinction made is between expenditure related to

health care or to law enforcement.

Reuter et al. (2004, p. 35) suggested that it could be useful to split up the conventional sectorsinto finer categories and pointed to expenditure on enforcement where distinctions can be made

between the different levels of the criminal justice system.

All studies, except two, feature data collected on expenditure at the different levels of the criminal

justice system but do not present the results separately. Results are presented as ‘law enforcement’. In

the Belgian studies (De Ruyver et al., 2004, 2007) the results of expenditure on law enforcement are

presented according to the different levels of the criminal justice system. Distinction is made between

the levels of investigation, prosecution, sentencing and execution of sentences. Moore (2005),

subdivides law enforcement into law enforcement and interdiction.

Some expenditure cannot be attributed to one of the conventional policy sectors because the

purpose of the expenditure does not correspond with one of the sectors (De Ruyver et al., 2004; 2007;

Moore, 2005; Ramstedt, 2006) .

In the Belgian study for example (De Ruyver et al., 2007) a category ‘other’, analogous with theAustralian study of Moore (2005), is created. This is merely a rest sector or category for expenditure

that cannot be classified under the conventional sectors. Examples are: expenditure for local drug

coordinators, expenditure on non-sector related research and policy and the yearly financial

contribution to the Pompidou Group.

In the Australian study expenditure on drug expert committees, non-sector related research such as the

development of a database to monitor illicit drug use, funding for the education and training of people

working with drug users and at-risk groups are included under the heading of “proactive expenditure

not elsewhere included” (Moore, 2005).

Ramstedt (2006) points to the difficulty of classifying expenditure on income support for drug users7.

The question is whether the expenditure should be regarded as preventive in nature, as harm reduction

or as a general measure? This expenditure was not placed under one of the conventional drug policy

sectors nor classified under a separate sector. The author estimated the expenditure on income support but presented the results next to the results of the estimation of the expenditure on the conventional

sectors of the drug policy.

Another issue that is observed is that the same expenditure can be classified under different

policy sectors depending on the study. Studies differ concerning the classification of a similar

expenditure in different policy sectors.

Kopp and Fenoglio (2003, p. 26) point out that treatment of detainees can be classified under treatment

in one country and classified under law enforcement in another. In their study on public spending on

drugs in the EU, the expenditure of the Member States are not reclassified. The allocation of

expenditure to one of the sectors depends on how these items are treated in the Member States

themselves.

7

Income support: salary subsidies and public protected work for people with disability for socio-medicalreasons, expenditures on social allowance and social insurance (sick leave, early retirement pensions) for heavy

drug users in institutional treatment and outside institutions (Ramstedt).

11



In the study of Rigter (2006) and the study of Moore (2005) expenditure on treatment programmes for

drug users in prison are classified under the sector treatment. In the other reviewed studies, is it not

explicitly indicated whether prison-based treatment is allocated to the sector of treatment or to the

sector of law enforcement.

Rigter (as cited in Reuter et al., 2004, p. 29) refers to expenditure on social cohesion and public safety.

This expenditure is intended to “protect the community against nuisance caused by drug users and

drug dealers”. He classified this expenditure under the sector treatment although he acknowledges

that such spending could also have been classified as law enforcement.

Step V: Calculating the data

For the estimation of expenditure exclusively used for drug policy on illicit drugs, no additional

calculation is needed. The obtained results are drug specific forms of expenditure. Examples are the

budget for the aftercare of drug users, the budget for research on drug prevention and expenditure on

treatment programmes for drug users in prison.

For the estimation of expenditure intended for broader policy domains and included in a broader

budget an additional calculation is required since this expenditure cannot simply be extracted from the budget. The application of repartition keys is needed to isolate these areas of spending. Kopp and

Fenoglio (2000) point out that there is no general methodology to determine repartitions keys. The

determination of a repartition key depends on the case.

The use of a repartition key is, for instance, required in the case of health promotion. To isolate the

public expenditure on illicit drugs from this budget, the number of projects for the prevention of illicit

drugs is divided by the total number of projects. This calculation produces a percentage that reflects

the proportion of projects designated for illicit drugs. When expenditure on all drugs, regardless of

their legal status, is estimated though, a repartition key is no longer needed in the case of health

promotion.

Another example where the use of a repartition key is needed, is in estimating the expenditure on

enforcement by police, judicial authorities and customs. The fraction of offences concerning violations

of drug laws has to be calculated on the basis of the total number of offences. The proportion of working time devoted to criminal cases has to be calculated to determine the proportion of working

time spent on violations of drug laws (Kopp & Fenoglio, 2002; De Ruyver et al., 2004, 2007).

The repartition key method guarantees that all resources - personnel, overhead, equipment and

operation - deployed are taken into account (WHO et al., 2000).

In practice, the appropriate repartition key for illicit drugs can be determined in different ways: on the

basis of information from registration systems, annual reports, contacts with the work field,…

In some cases no detailed data on budgets is available. In this case it is impossible to apply a

repartition key. A calculation on the basis of ‘unit expenditure’ is needed here (De Ruyver et al.,

2007).

For example, this type of calculation is used in studies to measure public expenditure for the

hospitalisation of drug users in a non-drug specific service. The average expenditure for

hospitalisation per day is multiplied by the average number of days a drug user is hospitalised.All the studies make use of repartition keys to estimate expenditure intended for broader

policy domains. When no detailed data are available, studies fall back on the use of unit expenditure.

Presentation of a methodology to estimate public expenditure on drug policy

Studies not only differ concerning the inclusion of expenditure and the conceptual framework

used, but also concerning the classification and measurement of public expenditure (Moore, 2006).

Therefore, a methodology is presented which enables the scientifically sound estimation of public

expenditure on drug policy.

It is proposed to focus on illicit drugs and licit drugs when estimating public expenditure on drug

policy (Kopp & Fenoglio, 2006).

12



Since public expenditure on drug policy consist of spending exclusively used for drug policy and

of expenditure included in budgets for broader policy domains, both types of expenditure have to be

analyzed. Ignoring these forms of spending would lead to an underestimation of the total of public

expenditure since 90% of the drug budgets in the EU reflect spending by bodies not specialised in the

drug issue (Kopp & Fenoglio, 2002).

To collect the budgets, two methods can be used: a top-down approach or a bottom-up approach.

The top-down approach has the advantage that one does not have to rely on secondary data the

budgets can be retrieved and analysed directly.

The advantage of the bottom-up approach is that the existing activities in the work field and the public

authority responsible for its payment are identified in detail.

To benefit from the two approaches, it is proposed to combine these two methods to get a full and

complete picture and to enable data verification.

To gain insight into who finances what, public expenditure on drug policy has to be classified on a

national level according to the competent public authorities and according to the different policy

sectors. In order to be able to compare data on an international level it is necessary to use the same

classification.To analyse the sources of the expenditure on drug policy, the public authorities involved in the drug

policy have to be identified and inventoried.

Research on public expenditure cannot be dissociated from the specific state and governmental

structure. Therefore, the inventory of the public authorities responsible for drug policy will vary

among Member States since in every Member State the configuration of competences in the field of

drug issues differs. The expenditure of all competency levels responsible for drug policy has to be

included in the analysis (Kopp & Fenoglio, 2003, De Ruyver et al., 2004, 2007).

When identifying the actors involved, public authorities, public services and subsidised private actors

(NGO’s) in the field of drugs have to be taken into account.

To classify public expenditure according to different policy sectors, the intended purpose of

expenditure must be the starting point (Reuter et al., 2004). Based on this purpose, public expenditurecan be classified into four different policy areas or sectors: ‘prevention’, ‘treatment’, ‘harm reduction’

and ‘law enforcement’. This classification allows for international comparison while at the same time

it takes into account the specific nature of the drug policy pursued in a particular country.

Examples of public expenditure aimed at ‘prevention’ are street corner work, prevention work,

initiatives to prevent drug-related nuisance and epidemic diseases in so far as these forms of spending

are not related to the consequences of drug use and not included as a direct expenditure in the public

authorities’ budget.

Examples of public expenditure aimed at ‘treatment’ are drug treatment and guidance for drug

users (especially in hospitals) and reintegration programmes (employment) for (former) drug users.

Examples of public expenditure aimed at ‘harm reduction’ are drug consumption rooms,

needle exchange programmes, pill testing programmes, methadone maintenance programmes,

buprenorfine maintenance programmes and treatment programmes for drug users with infectiousdiseases.

Public expenditure classified under the sector ‘law enforcement’ include spending for the

control of violations of the drug legislation by police, customs and judicial authorities.

Examples are expenditure on personnel such as policemen working in drug investigation units,

customs officers specialised in drug trafficking and magistrates dealing with drug cases.

Expenditure that is difficult to classify under one of the conventional policy sectors cannot be

ignored as the exclusion of such spending would lead to an underestimation of the overall expenditure

in the field of the drug policy.

To take into account these other forms of expenditure, an additional sector ‘other’ can be created. The

creation of a sector ‘other’ as a rest category will allow for the categorisation of expenditure that

cannot be classified under the conventional sectors (Moore, 2005; De Ruyver et al., 2007). Which

specific forms of public spending will be classified under this rest category will depend on the specific

13



nature of a country’s drug policy. In any case, this sector is solely intended for non-assignable public

expenditure.

Examples of public expenditure classified under the sector ‘other’ are spending on local drug

coordinators, expenditure on non-sector related research and policy, the yearly financial contribution

to the Pompidou Group of the Council of Europe (De Ruyver et al., 2007) and expenditure on policy

administration, information services and research (Moore, 2005).

When the intended purpose of the expenditure is questionable, it is not always clear to which

sector it should be allocated.

As explained before, this is the case with spending on the treatment of detainees. It is possible to

classify such expenditure under treatment as well as under law enforcement. The starting point to

decide upon the allocation to one of the sectors is the purpose which the expenditure is intended for.

Following this line of reasoning, expenditure on treatment of detainees should be allocated to the

sector treatment.

Two types of public expenditure exist: spending exclusively used for drug policy and expenditure

intended for broader policy domains.

Expenditure exclusively used for drug policy does not require an additional calculation, unlike theexpenditure that is part of a broader budget. To calculate the expenditure included in a general budget

it is necessary to apply a repartition key to the obtained amount.

A disadvantage of using a repartition key (e.g. number of drugs clients/ total number of

clients, e.g. share of drug cases/ total number of cases) is that it implicitly assumes that the expenditure

for each unit is the same for all activities (e.g. that the expenditure for a drug user is equal to the

expenditure for other clients, e.g. that the expenditure for a drug case is equal to the expenditure for

other cases). Differences in the expenditure per unit of activity are ignored (Kopp & Palle, 1998;

Ramstedt, 2002; Rigter, as cited in Reuter et al., 2004). It is therefore essential to study whether the

investments in terms of working hours for the treatment of drug users and other clients are comparable

(Kopp & Palle, 1998, De Ruyver et al., 2007)

Another proposed method to isolate expenditure on drug policy that is part of a broader budget

is the use of a unit expenditure calculation. Unlike the repartition key, this approach does not present problems of variability. However, in the Belgian study (De Ruyver et al., 2004, 2007) , this method

was only used to calculate expenditure on treatment in hospitals. After all, for the determination of a

unit expenditure the researcher has to depend on the institutions/actors involved, leading to a possible

contestation of the reliability of the data. Secondly, the determination of unit expenditure is restricted

to spending on personnel, as opposed to repartition keys that include all types of resources.

4. The Belgian example

The study of public expenditure is illustrated by a brief presentation of some results of a study on

public expenditure on drugs undertaken in Belgium between 2005 and 2006 (De Ruyver et al., 2007).

In Belgium, over 50% of public expenditures on dealing with the drug problem go to enforcement

(Table 2). The treatment sector accounts for approximately 40% of public expenditures on dealing

with the drug problem. The sector prevention is dealt with less then 4%. Expenditures that cannot be

categorised under one of the three main sectors, included in the residual category ‘other’, are

negligible, amounting to only 0.36%.

Table 2 Drug policy expenditures at the various government levels (2004)

K €2004 PREVENTIO

N

TREATMEN

T

ENFORCEMEN

T

‘OTHER ’ TOTAL

Federal 1,635,128 107,801,788 107,478,404 833,521 217,748,841

Regions 8,038,053 9,026,432 37,500 - 17,101,985Provinces 536,165 272,690 - - 808,855

Towns & 1,141,139 496,642 59,604,214 235,764 61,477,759

14



Municipalities.

TOTAL 11,350,485 117,597,552 167,120,118 1,069,28

6

297,137,440

Figure 1 Visual representation of public expenditures for 2004

39.58%

3.82%0.36%

56.24%

P r ev en t io n A ssi st a n ce E nf o rc em en t O t he r

P

In 2004, the total public expenditure on drug policy for all sectors combined was estimated at €

297,137,441. On 1 January 2004, Belgium’s population stood at 10,396,421 inhabitants. This means

that public expenditure on drug policy in 2004 amounted to € 28.57 per inhabitant.

Taking into account the level of spending per sector, this € 28,57 may be divided as follows:

Table 3 Distribution of public expenditure by sector

SECTOR (2004) € PER

CAPITA

‘Prevention’ 1.09

‘Treatment’ 11.31

‘Enforcement’ 16.07

‘Other’ 0.10

TOTAL 28.57

Belgium’s public expenditure on drug policy is substantially lower than that in the Netherlands and in

Sweden. In the Netherlands, per capita public expenditure on drug policy for the year 2003 amounted

to € 134.4 (Rigter, 2006). Sweden’s per capita public expenditure on drug policy for the year 2002

amounted to € 101 (Ramstedt, 2006). A comparison with other studies on public expenditure is risky, because of the differences in the applied methodology.

In 2004, Belgium’s Gross Domestic Product (GDP) amounted to € 289,508,500,000 (289.5 billion

euros), meaning that public expenditure on drug policy represented 0.10 % of the GDP.

5. Conclusions

At European level, research into public expenditure is gaining momentum, in view of the growing

realization of the importance of policy evaluation with regard to drugs. After all, public expenditure is

an important indicator of the governmental efforts in tackling the drug problem. Public expenditure

gives a clear picture of a government's investment in drug policy and shows whether the government’s

priorities for that drug policy is mirrored in their budget. A drug budget provides insight into the actual

15



level of public expenditures in this field and into how these expenditures are composed or what the

public authorities so-called ‘policy mix’ is. Consequently, the prevailing balance between the various

sectors of illicit drug policy (prevention, treatment and law enforcement) also becomes visible.

In the Belgian federal policy note on drugs of 2001, for instance, prevention is said to be the priority in

drug policy, followed by treatment and then by law enforcement as a last resort. In fact, with regard to

public expenditure, the opposite became clear in the public expenditure studies: the most substantial

expenditures relate to law enforcement, followed first by treatment and then prevention (De Ruyver et

al., 2004; De Ruyver et al., 2007).

The results of public expenditure studies can be used to modify or rationalize public

expenditure. Research into public expenditure is important to meet the requirements of an evidence-

based policy and it is the first step to cost-effectiveness research.

Public expenditure studies do have their limitations too. They do not allow for a full policy evaluation.

These studies are, in itself, no quality measurement of policy. To reach policy evaluation, an

elaborated plan is needed, with clear statements on goals, operational action points, budgets and

timeframes. This policy plan should ideally be evidence-based, based that is on epidemiological data

about new trends in drug use and groups of (problem) drug users, on data about – insufficiently –

reached target groups in prevention, early intervention and treatment and on evaluation andeffectiveness studies.

The methodology necessary to study public expenditure on drugs is complex because different policy

areas (prevention, treatment and law enforcement) and different governmental levels (local, regional

and federal) are involved. Ideally, two methods of analysis are combined: a top-down approach,

analysing the funding sources of the private and public organisations and a bottom-up approach,

analysing the activities in the work field. For the calculation of public expenditure, a distinction has to

be made between explicitly labelled drug-related expenditure and non-labelled drug-related

expenditure.

The importance of using a single, clear methodology, applied in a uniform manner can not be stressed

enough, particularly when the comparison between different time-measurements and especially

between different EU countries is the aim. A mere – small – change in methodology mighterroneously lead to decide to either an increase or decrease of public expenditures, without any actual

change in the budget (Van Malderen, Vander Laenen & De Ruyver, 2007)..

16



Bibliography

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Documents

2009 the Study of Public Expenditure on Drugs, A Useful Evaluation Tool for Drug Policy, The Belgian Example_18p