By Beau Kilmer

This article provides a primer on illegal drug markets, with a focus on the structure and nature of these markets and the enterprises involved. The markets for illegal drugs are large, with annual retail expenditures likely exceeding $100 billion in the United States alone. Many drugs are easy to produce, and their high value- to-weight ratios make them attractive to smugglers. Some features of illegal drug markets have been quite stable, such as the small size of retail purchases, in part because most sales are to people who use frequently and typically do not buy in bulk. Between production and consumption, most of these substances cross multiple borders—and often continents—and the mark- ups along the supply chain continue to be substantial. But there have been major changes over the past 15 y. While illegally manufactured synthetic drugs are not new, the proliferation of fentanyl and other synthetic opioids created an overdose crisis in
North America and has other countries on high alert. The internet has also made producing and accessing a wide range of drugs and their precursor chemicals easier. The emergence of cryptocurrencies has created new opportunities to hide transactions and launder the proceeds. In addition to highlighting the stability and turbulence in these markets, this article offers ideas for future research and emphasizes the need for monitoring purity-adjusted drug prices, which is critical for understanding supply changes and evaluating
interventions in these markets.

By Joras Ferwerda

Criminals launder their proceeds from crime, either themselves or by paying a professional, to disguise the link between the criminal, the crime, and the proceeds. This allows the criminal to spend the proceeds more freely and lowers the chance of receiving unwanted attention from the authorities. This paper investigates the structure and dynamics of the understudied market for money laundering services. The analysis reveals that this illegal market is demand-driven and fragmented, with different forms of laundering, each requiring different steps with varying levels of risk. High search costs, specialized money launderers, and uncertainties lead to local monopolies. Demand tends to be relatively inelastic because criminals eventually need laundering services to spend their proceeds. Local monopolies, inelastic demand, and poor information flows
lead to relatively high prices for laundering. Trust issues and two-sided asymmetric information lead to a market with relationships that tend to last longer than generally expected in illegal markets.

By Kevin Petersen, Brian D. Johnson, Allison D. Redlich, Miranda A. Galvin

Extant research on criminal sentencing generally concludes that racial/ethnic disparity is concentrated in the “in–out” decision, and that racial differences in sentence lengths are small and inconsistent. However, sentence length analyses rarely focus on the fact that criminal sentences are often partially or fully suspended, creating situations in which the sentence formally imposed differs from the sentence served. In many jurisdictions, suspended sentencing is used widely and is a highly discretionary decision that carries considerable potential to mask racial inequality in punishment. This study uses 24 years of sentencing guideline data (2000–2023) from the state of Maryland to test for racial/ethnic disparity in the use of suspended sentences. Using a novel modeling approach capable of simultaneously estimating the probability of receiving a fully suspended sentence, a fully executed sentence, and variation in the proportion of the total sentence suspended, we test for racial disparities in the application of suspended sentencing outcomes. We identify significant and meaningful disparities in suspended sentences that are largest for minority defendants convicted at trial. However, we also find that this disparity has been declining over time. Ultimately, we emphasize the importance of distinguishing between active and suspended sentences in ongoing research on punishment inequalities.