ABSTRACT
The illegal production and exportation of narcotics inflicted significant damage on Latin American economies, especially during the difficult decade of the 1980s. Latin Americans saw the problem differently: they believed that the United States should spend its resources on curtailing the demand for drugs at home. Drug trafficking drew attention to the power and importance of “informal markets,” or the informal sector, in Latin America and other places in the developing world. Unemployment levels rose about 14 percent in the formal sector between 1980 and 1986, while the number of families involved in the cultivation of coca increased some 300 percent. The increase in drug trafficking from Latin America and the rapid growth of the informal economic sector are related phenomena and suggest structural problems in the region. However, illegal narcotics continue to flow from Latin America, and neoliberal policies, which have eliminated hundreds of thousands of jobs in Latin America, have actually pushed more people into the informal sector.
