Home > Understanding drug-related public expenditure.

Pike, Brigid (2008) Understanding drug-related public expenditure. Drugnet Ireland, Issue 27, Autumn 2008, pp. 23-24.

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In July 2008 the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) published a report Towards a better understanding of drug-related public expenditure in Europe.1 It reports on a study undertaken by the EMCDDA in conjunction with 23 member states, including Ireland, in pursuit of the aim in the EU drugs action plan 2005–2008 to produce estimates of public expenditure on drug-related issues.2 The study tested a methodology that would facilitate the collection and comparison of drug-related expenditure across jurisdictions with different political structures and government accounting systems.

 Why is understanding drug-related public expenditure important?
‘Quantifying a government’s drug-related expenditure is a first step in formulating an economic evaluation of drug policy interventions. This will provide information that can be used to determine whether or not intended benefits are being achieved. Once developed, a standardised classification system for this exercise will provide a useful framework for both policy decision-making and public administration accountability.’ (EMCDDA 2008: p. 11)
The study found that, in general, member states have a considerable amount of information on drug-related expenditure. It estimated that the total drug-related public expenditure in Europe in 2005 (the year chosen for investigation) was around €34 billion, which was equivalent to 0.3% of the sum of the GDP of all the countries participating in the study. This meant that on average, for each million euro of a European country’s GDP in 2005, €3,000 were publicly spent on drug-related matters. This represented an average expenditure of €60 per European citizen per year.
These figures are indicative only. Budget lines on drug-related issues in member states are still too generic, too aggregated, over-inclusive, or simply unidentifiable. The methodological challenge for the EMCDDA was to develop a unified and common classification approach that would maximise the validity and comparability of results across countries. Two approaches were used – labelled and non-labelled expenditure.3
Labelled expenditure
Labelled expenditure is the planned ex-ante expenditure that reflects the voluntary commitment of the state in the field of drugs. It can be traced back by a detailed review of budget and/or fiscal year-end accountancy reports. Ireland emerged as the country with the highest proportion of labelled expenditure (€176.8 million, i.e. 0.32% of total public expenditure). However, the authors noted a difficulty with the Irish data in that only a small amount was recorded in public accountability documents: ‘… details of only around 18% of labelled expenditure are published [i.e. the Drugs Initiative under Vote Community, Rural and Gaeltacht Affairs, and an allocation for drug-related housing measures under Vote Environment, Heritage and Local Government]. The remaining 82% is either subsumed under, but clearly identifiable in, some larger published budget, or it is a clearly defined drug-related programme or activity that receives funding from a range of different labelled budgets. Many departments and agencies involved in drug-related matters do not currently have adequate reporting systems in place to capture and report this budgetary complexity. However, the data is potentially available, particularly in relation to direct expenditure by government bodies.’ (pp. 12–13)
The authors noted a further difficulty in that there was no record of regionally- or locally-funded drug-related expenditure in Ireland. Funds were voted at national level and allocated by central departments and agencies for use at regional and local level. The authors commented: ‘As this type of expenditure represents a significant portion of drug-related expenditure in Ireland, the issue needs to be addressed. One solution might be to record the expenditure according to both government and non-government activities, but the risk of double-counting would need to be managed.’ (p. 14)
Non-labelled expenditure
Non-labelled expenditure is the non-planned ex-post public expenditure faced by the general government in tackling the drugs issue. The study used a top-down, or gross costing, approach to estimating these expenditures. Starting from overall aggregated expenditures, participating countries were invited to estimate the proportion causally attributable to drug use (Non-labelled Drug-related Expenditure = Overall Expenditure x Attributable Proportion). For example, to estimate the prison drug-related expenditures in a given country, two elements were necessary: the overall prison expenditure in the country, for a given fiscal year, and the proportion of inmates in prison because of drug-related issues. The product of the two gives a rough estimate that could be compared across different countries.
Only nine countries attempted this part of the study; Ireland did not participate as there was insufficient data. However, the findings underline the importance of attempting to estimate this type of spending. In comparing the findings on labelled and non-labelled expenditures on health and on public order and safety, the authors reported that labelled expenditure on health exceeded that on public order and safety, whereas non-labelled estimations suggested that public order and safety spending exceeded that on health. The authors concluded:
… despite public order and safety functions attaining higher levels of expenditure than health functions, health expenditure is more present in accountancy documents. Thus it can be said that, in general, health expenditure on drug-related issues is more distinct than expenditure allocated to law enforcement issues. Although this can easily be explained by the fact that expenditure on public order and safety tends to be embedded in broader and more general programmes of action against crime, one must remember that an assessment of the efficiency of government action is not feasible without a clear and well-defined formulation and classification of expenditure, where costs are properly identified in the relevant budget appropriations. The budget is the financial mirror of government policy; if the budget excludes important expenditure, there can be no assurance that scarce resources are allocated to priority programmes and that proper control and public accountability are enforced. (p. 23)
The authors concluded that the twofold methodology proposed and implemented by the EMCDDA, although preliminary, had proved to be ‘feasible and scientifically robust’ and called for the work to continue.
1. European Monitoring Centre for Drugs and Drug Addiction (2008) Towards a better understanding of drug-related public expenditure in Europe. Selected issue. Lisbon: Office for Official Publications of the European Communities.
2. In Ireland, the Alcohol and Drug Research Unit (ADRU) of the HRB, the Irish national focal point of the EMCDDA, undertook the necessary data-collection and reporting work. The report on the Irish findings is available in the National Report 2007 at https://www.drugsandalcohol.ie/11776/
3. This article describes the data-collection and validation methodology that was tested. It does not discuss the approaches that were used to compare expenditures across countries; these approaches included classifying expenditures by governmental function and by drug programme.
Item Type
Publication Type
Irish-related, Open Access, Article
Drug Type
Substances (not alcohol/tobacco)
Issue Title
Issue 27, Autumn 2008
Page Range
pp. 23-24
Health Research Board
Issue 27, Autumn 2008
Accession Number
HRB (Available)

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