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Two Cows (or Four Goats) For a Gun

Monday, December 5, 2016TOPICS: Faculty and StaffResearch

Two Cows (or Four Goats) for a Gun
begin quoteOurs is the first effort I know of to quantify illicit global flows of small arms, and it seeks to do so without relying on problematic proxies like numbers of arms seized by authorities.

Contrary to one popular and resilient myth of small arms availability in the developing world, you can’t, in fact, buy an AK in exchange for a chicken. On Kenya’s black market, you can buy an M4 with launcher for 15 cows, or a .303 rifle for just 1-2 cows (or 4 goats). AK ammunition there costs 1 pint of local beer per round. In next-door Ethiopia, a WASR-10 goes for “4 torch bulbs filled with gold.” In Colombia, 1 Kalashnikov is worth 1 kilogram of cocaine, a 7.62x51mm machine gun costs 3 kilograms, and a .50 caliber machine gun 5 to 6 kilograms.                     

Of course, most illicit small arms transactions take place in some monetary currency. Taken together, all of these prices tell a larger story. They are indicative of the global illicit supplies of small arms and ammunition commonly thought to be destabilizing factors in many areas of the world, making violent conflict potentially more likely, longer lasting and more intense. Some areas of Mexico, a quick 15-minute drive from San Diego, are a testament to this fact. And Mexico’s small arms problem pales in comparison with those of some other countries. 

But where are the largest illicit arms flows? How will we know if we are successful at reducing them? There is currently no good way of detecting and quantifying international illicit arms trades. Obviously, participants have incentives to shield their activities from public scrutiny. This being the case, the seizures of illicit small arms have become the U.N. Office on Drugs and Crime’s major metric for inferring volumes of illicit arms flows. But such statistics are highly flawed. Cross-country comparisons may be flawed due to divergent capacities or corruption levels, for instance. And even comparisons between time periods within one jurisdiction may not hold if regulators’ priorities change.

These problems lead to a kind of reverse moral hazard: countries may actually be discouraged from intercepting illicit arms and ammunition flows for fear that the increase in official seizures will be interpreted as a real rise in illicit flows.

Convinced that detecting and quantifying illicit small arms flows will lead to greater awareness and better policy, some colleagues and I — collectively founders of a research consortium called the Small Arms Data Observatory — have proposed a new method for doing so: testing econometrically for price changes on the black market. Ours is the first effort I know of to quantify illicit global flows of small arms, and it seeks to do so without relying on problematic proxies like numbers of arms seized by authorities.

Our idea, in a nutshell, is a statement of simple microeconomic theory: if demand factors — homicide rates, per capita income and ongoing violent conflicts, to name a few — and licit supply can be perfectly controlled for in a given market and time period, negative and positive deviations from predicted prices will respectively indicate net illicit imports to, and net illicit exports from, that market. That is, if we can determine that prices in a particular country are improbably low, given what we know about demand and above-board supply, then we can state with some confidence that there is a second, illicit source of supply.

We have now created beta versions of two pioneering datasets on illicit small arms prices. The first compiles thousands of individual transactions from dozens of countries around the world, culled from media outlets, reports and journal articles (see Figure 1). Encouragingly, we’ve found that small arms prices show great variation from place to place, and year to year. The second dataset derives from the first, but is generalized to the country level, in theory allowing for analyses that will yield net illicit arms flows.

We’re not there yet. But in the meanwhile, we can tell a few interesting stories with price signals. Let’s take a few examples from our Southern neighbors. Prices for small arms rose steeply in Haiti following the re-instatement of President Jean-Bertrand Aristide in 1994, dropped for about a decade, then spiked again in the wake of the United Nations Stabilization Mission (MINUSTAH) from 2004 onward. Colombia saw a sharp rise in prices for assault rifles following a 2004 government-initiated amnesty/buy-back program for paramilitaries and guerrillas.

Very generally, where prices are low there is likely a surfeit of weapons: in economic terms, gun supply exceeds consumer demand. But low prices can translate into lethal consequences. In Brazil, after a long period of generally high prices, costs started dropping in the mid-1990s. The county now has on average 42,000 gun homicides a year. In Mexico, there has been a gradual decline in prices over the past 25 years, likely owing to a lively traffic in arms across the U.S.-Mexico border. The country has experienced over 138,000 homicides since 2006, 95 percent of which have been committed by firearms.

In 2015, the United Nations unanimously adopted a set of Sustainable Development Goals (SDGs) for the next 15 years. Target 16.4 of the SDGs states that in order to secure more peaceful and just societies by 2030, we must “significantly reduce illicit […] arms flows”. Accompanied by data on illicit arms seizures, our approach has the potential to rate the effectiveness of countries at intercepting illicit small arms trades. Even more promisingly, our research may also be able to identify the most flagrant violators of international laws such as the United Nations 2014 Arms Trade Treaty, and staunch these deadly flows.  

 

TOPHER MCDOUGAL, PHD
is an economist and associate professor at the Kroc School of Peace Studies. His forthcoming book from Oxford University Press is The Political Economy of Rural-Urban Conflict: Predation, Production, and Peripheries.

Read this article and discover other articles of Kroc Peace Magazine 2016 on ISSUU

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