SHORT TERM EFFECTS OF CANNABIS LEGALIZATION IN URUGUAY ON CRIME: AN ANALYSIS USING SYNTHETIC CONTROL

Uruguay is the only country in the world that has adhered to the legalization of marijuana production and distribution nationwide. The purpose of this paper is to analyze the short-term impacts of Uruguayan policy on crime (homicides and robberies) in that country, seeking to contribute to the literature by presenting the first results of this unique situation in the world. To do so, the paper employs the synthetic control methodology whose objective is to create a linear combination of the units of the donor pool, in this case the Brazilian states, mimicking the Uruguayan situation in the absence of the approved legislation. The results show that in spite of the fact that there has not been a trend break with regard to the two types of crime examined; a more exacerbated growth of both rates in the treated unit may have been avoided.