This study is intended to establish a framework for analyzing the economic impact of narcotraffic between Colombia, where most of the world's cocaine is refined, and the State of Florida, which is the primary area of entry for Andean cocaine into the United States. The purpose of the study is to analyze the economic costs and benefits of this activity to Florida, as an example that could be extended in both directions — to Colombia and to the entire United States—if additional data were to become available. Only the trade in cocaine is examined, though additional traffic in marijuana does take place and, in some cases, the data are not disaggregated for each drug. Only the economic impact is studied, though the trade obviously impacts the social and political realms as well. Because the tools of analysis are quite different among the disciplines, and because the economic issues need to be sorted out in any discussion of the overall impact of the cocaine trade, only economic issues are treated here.

The 1980s Witnessed a series of halting, tenuous but, nonetheless, widely—hailed transitions from military regimes to constitutional democracies throughout South America. Yet, despite the initial optimism, the political newcomers faced formidable tasks. Not only had memories of democratic rule and practices grown dim in the years of disuse, but, with few exceptions, new governments found themselves threatened by a deteriorating economy with bleak prospects for the future. Equally — perhaps even more — threatening was the fact that though the military regimes may have relinquished their position, they had not necessarily relinquished their power, which raised the possibility that their civilian successors might not be able to stay in office long enough to confront their multifarious problems.

In Argentina, the risk of a return to military rule was perhaps even greater than in some of its neighbors as the country had experienced a mosaic of alternating military and civilian governments ever since 1930.

On the evening of 14 May 1989, hours after Argentina had held its first elections for a presidential succession in 60 years, the atmosphere at the Buenos Aires headquarters of the Unión del Centro Democrático(UCEDE) was lugubrious. The electoral news flowing into the computer terminals harbingered a resounding victoiy for Carlos Menem, the Peronist presidential candidate, and a remote third place showing of 6% for Alvaro Alsogaray, the presidential candidate of the young conservative party. Even in the capital city of Buenos Aires, where the UCEDE had led in the polls for congressional elections right up to election day, it trailed in third place. Would-be congressmen wandered the headquarters floor bewildered.