Association for Public Policy Analysis & Management

Illicit trade in tobacco products (ITTP) is growing in the U.S and may increase even more as tobacco control tightens legal markets. The trade also appears to be becoming more violent, which can create significant economic and other social harms. This paper applies lessons from other illicit and violent markets to analyze various targeted enforcement strategies against ITTP. Three main targeting approaches are contrasted.  The first is suppression of market volume; i.e., indiscriminate enforcement action such as product seizures, intended to stem the supply of illicit product. The second approach is suppression of violence based on the “Pulling Levers” strategy in illicit drug law enforcement. In Pulling Levers, the most violent gang members/criminal participants are targeted and threatened with heavy sanction if they persist in illegal behavior. The third potential approach would be to focus on only those ITTP networks and organizations with ties to terrorism. The costs and benefits of each enforcement strategy to suppress violence in illicit markets are discussed. Assessing the costs and benefits requires an expectation of outcomes under each approach; therefore the promise and limitations of formal economic modeling applied to ITTP are explored. The existing literature from economics and other relevant disciplines is reviewed and adapted to the present policy issue of ITTP. The benefits of early enforcement timing to prevent market growth rather than reacting to it are also highlighted.