The illicit drug problem can be divided into three categories: first, those illicit drugs that are either produced or processed from natural plant products such as opium poppy: opium, morphine, and heroin; secondly, synthetically produced illicit drugs, such as amphetamine; and thirdly, psychoactive pharmaceutical drugs that become illicit as a result of being diverted from licit uses or purposes. The present study is concerned primarily with the first and, to a lesser extent, the second category. The third category is not considered here, not because knowledge about it is scant, but because its economic and social impact is quite different from the other two categories.1 An earlier version of the present study was prepared for the Commission on Narcotic Drugs at its thirty-eighth session in 1995.2 That report represented the culmination of a process that began in 1990 when an Intergovernmental Expert Group met at Vienna and drew up the framework of a study dealing with illicit markets and the production, distribution, and consumption of illicit drugs. The Expert Group adopted a set of recommendations that were presented to the General Assembly at its forty-fifth session in 1991. In 1993, the Assembly, in its resolution 48/112, recommended that the Commission should consider including the issue of the economic and social consequences of drug abuse and illicit trafficking as an item on its agenda. At its thirty-eighth session in 1995, the Commission was presented with an earlier version (E/CN.7/1995/3) of the present report, which had been prepared by the United Nations International Drug Control Programme (UNDCP).