Policies based on prohibition and repression to fight the war on drugs have largely failed in a variety of contexts. However, incentive-based policies may also fail and have unintended negative consequences if policymakers do not properly anticipate the behavioral reactions of people. This is particularly problematic in the case of policies that are announced prior to their implementation. This paper shows that a naive an untimely policy announcement generated an unprecedented escalation in the production of cocaine in Colombia, offsetting almost 20 years of US-backed efforts to fight the war on drugs in that country and billions of dollars invested.
