Pop quiz: Which European country has the most liberal drug laws? Sept 27 10

"Pop quiz: Which European country has the most liberal drug laws? (Hint: It's not the Netherlands.)

Although its capital is notorious among stoners and college kids for marijuana haze–filled "coffee shops," Holland has never actually legalized cannabis — the Dutch simply don't enforce their laws against the shops. The correct answer is Portugal, which in 2001 became the first European country to officially abolish all criminal penalties for personal possession of drugs, including marijuana, cocaine, heroin and methamphetamine.

At the recommendation of a national commission charged with addressing Portugal's drug problem, jail time was replaced with the offer of therapy. The argument was that the fear of prison drives addicts underground and that incarceration is more expensive than treatment — so why not give drug addicts health services instead? Under Portugal's new regime, people found guilty of possessing small amounts of drugs are sent to a panel consisting of a psychologist, social worker and legal adviser for appropriate treatment (which may be refused without criminal punishment), instead of jail. (See the world's most influential people in the 2009 TIME 100.)

The question is, does the new policy work? At the time, critics in the poor, socially conservative and largely Catholic nation said decriminalizing drug possession would open the country to "drug tourists" and exacerbate Portugal's drug problem; the country had some of the highest levels of hard-drug use in Europe. But the recently released results of a report commissioned by the Cato Institute, a libertarian think tank, suggest otherwise.

The paper, published by Cato in April, found that in the five years after personal possession was decriminalized, illegal drug use among teens in Portugal declined and rates of new HIV infections caused by sharing of dirty needles dropped, while the number of people seeking treatment for drug addiction more than doubled.

"Judging by every metric, decriminalization in Portugal has been a resounding success," says Glenn Greenwald, an attorney, author and fluent Portuguese speaker, who conducted the research. "It has enabled the Portuguese government to manage and control the drug problem far better than virtually every other Western country does."

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