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This chapter characterizes the contemporary heroin market in terms of its major producers, traffickers, and consumers. It presents an overview of the contemporary world opiate market and supply-control programs and provides both a static portrait of the market and insight into its dynamics. Despite the apparent asymmetry of supply and demand there is little evidence of market control or power except possibly in the past actions of the Taliban and, to a much lesser extent, among some present-day traffickers. The evidence is more supportive of market segmentation, which has important implications for market adjustments and outcomes.

This chapter explores the distinctive configuration of the opiate market and heroin trade. It proposes a theoretical model of effective illegality that helps to explain the role of government in determining each country's mode of participation in heroin trade. This model integrates economic, political, and sociological concerns and it identifies three stylized cases of enforcement and categorizes countries according to their implementation of international prohibitions on opiate production and trafficking. The model shows that aside from opium poppy cultivation, not all forms of non-enforcement offer the best conditions for illegal drug businesses.

This chapter reviews the historical development of the world opiate market, including the international policy regime that surrounds it. It explores the period of growth of the opiate market in the nineteenth century, the decline that occurred during the first half of the twentieth century and the re-emergence and transformation that occurred during the latter part of the twentieth century. Historical evidence suggests that changes in policies especially the first and second International Opium Conventions of 1912 and 1925, played a part in the major reductions in opium consumption that occurred during the first half of twentieth century. The analysis of international and domestic drug control efforts indicate that increasing control and prohibition of opiates reflected cultural biases of western societies and governments.

This chapter presents a comprehensive model of the world opiate market and charts the immediate after-effects of the Taliban ban, using data from the United Nations and other public sources. It explains the tracking approach using this mode and provides a diagram showing opiate flows from cultivation to consumption. The analysis reveals that Asia dominates not only in production, but also consumption and the seizure of opiates and that it is likely that total world production exceeded consumption and seizures during the late 1990s.