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Objective. This article explores the empirical effects of U.S. drug policy on coca cultivation in the Central Andes. We assess the impact of U.S. military assistance on the production of coca in the Central Andes, while controlling for other explanatory variables that influence coca cultivation.

Method. Using data from 1980–2001 for Colombia, Bolivia, and Peru, we perform a pooled cross-sectional time-series analysis.

Results. The effects of U.S. military assistance on coca cultivation are not uniform across the Central Andes. Coca production decreased in Bolivia and Peru and increased in Colombia. Total coca production in the Central Andes, however, remained unchanged.

Conclusion. This study is consistent with existing literature that points out the obstacles governments face as they attempt to suppress illicit goods. Specifically, our empirical findings support the idea of the “balloon effect,” whereby government efforts to “squeeze” illicit trade in one area result in the expansion of that trade elsewhere.