Purpose - The purpose of this paper is to review the literature on the connections between illegal drugs and the informal economy and consider this in the light of the increasing levels of global interconnectedness in recent decades. Design/methodology/approach - This is a review of the empirical drugs literature with a primary focus on British-based research and analysis of the impact of different aspects of globalization. Findings - Patterns of heroin and crack-cocaine use need to be understood in their social, economic and cultural context, particularly in relation to their location in the informal economy. Globalizing processes have profoundly shaped local drug problems over the last 30 years. Practical implications - The governance of the drug problem needs to be reframed to take account of its social economic nature and global character. New ways of thinking are required to advance future research and policy. Originality/value - The focus on the impact of globalizing processes is original and leads to some important new insights for future research and policy. © Emerald Group Publishing Limited.