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Introduction
Aggressive drug criminalization policies have disproportionately impacted African American and Latino communities for over half a century. The “War on Drugs”—commonly known as the sentencing laws for non-violent offenses related to drugs—has led to the corpus detainment of many people of color in the US, deprivation of fundamental rights, and the dismantling of the economic, societal, and familial structures of communities. While White and Black US citizens abuse drugs at similar rates, according to Kaminoff (2018), people of color are three to four times more possibly compared to Whites to be charged with possessing drugs. The decriminalization of drugs is one strategy that is frequently suggested to lessen the racial impacts due to the War on Drugs. African Americans and Latinos would be jailed for possessing drugs far less frequently, which would help alleviate some of the racial impacts of the current drug policies. This literature review seeks to assess the non-punitive approaches to simple drug use and possession proposed in various studies and how these approaches can reduce racial disparities. More specifically, how do approaches like decriminalizing drugs impact drug use, the functioning of the criminal justice system in light of racial equality, and other correlated aspects of society? The review also aims at identifying research gaps toward recommending the best course of action
This review is presented as shown; the second part presents statistics on the disparities of drug-related arrests and convictions and a brief history of drug policy in the US, with examples that perpetuate inequalities within the criminal justice system regarding drug arrests. The third section discusses the phenomenon of arrests and punishments for crack and powdered cocaine in the US and the failure of rehabilitation and treatment, as well as outlining approaches assumed by countries towards addressing drug crimes. The fourth section discusses drug courts, current decriminalization strategy, and what drug decriminalization looks like in different states. The final section presents recommendations on drug policies.
This review involves an analysis of crime, criminal justice, racial disparities, and discrimination of current drug policy approaches in the US. This review will incorporate a range of peer-reviewed journal articles from the last eight years, including policy analysis, quantitative and qualitative research, and theoretical discussions on drug use and drug policy from reputable journals in various disciplines such as criminology, political science, sociology, and legal studies. Multiple databases were consulted to locate these articles, with various searches conducted. For instance, searches were conducted on states decriminalizing drug use and possession.
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Statistical Presentation of Racial Disparities
The US criminal justice system has large, long-standing racial inequalities in drug arrests, with the arrests of people of color due to drug crimes being at a rate 5 times higher than that of Whites (Gaston, 2019). Gaston contends that racial inequalities in drug arrests are caused by reasons besides just drug offenses since drug crime data largely show that people of color are not more inclined to abuse or sell drugs than Whites. Gaston (2019) makes this conclusion by presenting findings from a qualitative and quantitative study on racial differences in drug misuse in St. Louis communities during 2009–2013. The study findings are important as they lend insight into racially-biased policing. This is because racial incoherence is a symptom of racially-prejudiced drug enforcement since people are more at risk of being arrested for drugs when their race contrasts with that of their immediate context. Nonetheless, there is a need for added research since the findings from this research cannot be generalized to the entirety of the US.
Similarly, Gross et al. (2022) state that African Americans amount to 69% of all incarcerated individuals due to drug-related crimes. This indicates that even though people of color and Whites abuse illicit substances at comparable rates, people of color are five to six times that Black people are 19 times more at risk of being convicted of drug offenses. Law enforcement picks which drug offenders to seek as drug offenses are seldom reported to the police. They decide to stop, inspect, and charge people of color frequently and disproportionately. Koch et al. (2019) claim that this constitutes racial profiling. Koch et al. (2019) utilize the “National Longitudinal Survey of Youth” to quantify incarceration for usage and possession of drugs in their study to look into whether there are racial inequalities in drug use arrests. The findings indicated that minority groups have a higher potential of being arrested due to drug use and possession. This research is important as it demonstrates that rather than racial inequalities in the severity or type of drug offense, inequities in drug arrests are the result of institutionalized racial prejudice in drug enforcement. This study offers a comprehensive presentation of data and findings, offering a profound insight into the racial inequalities in drug-related arrests and the need for a policy change toward improving the criminal justice outcomes for these minority groups due to law enforcement racial biases.
2.1 A Brief History of Discriminatory and Racist Policing in America
The history and traditions of American police include the historical marks of racism and associated problems. According to Brown (2019), class and race have persistently been core to the role of law enforcement agencies and criminal justice in society. Similarly, through a systematic review of previous literature on the history of American policing, Hinton & Cook (2019) argues that the policing and prison reforms implemented in the years before Johnson’s 1965 war on crime began were influenced by the persistent criminalization and imprisonment of recently released people and their descendants following the Civil War. Prior, after, and throughout Prohibition, the perpetuation of Jim Crow policies released unprecedented systems for geographical regulation and societal repression at the municipal and federal stages, which ultimately jeopardized people of color’s physical and social mobility, chances in life, and economic possibilities. The research is essential in outlining the systematic discrimination that has been present in American policing. More research is needed, however, to present empirical evidence of this phenomenon.
Similarly, according to Kaminoff (2018), the War on Drugs, initiated by President Nixon, was in such a way that successfully removed the people of color’s political influence. Through a qualitative investigation of how the War on Drugs has impacted support for the legalization of marijuana, Kaminoff (2018) notes that laws criminalizing substance use—the non-violent crimes—have been in the years after this campaign strengthened and have increased the number of minority groups in prisons. This research offers useful insight into understanding the impacts of the “War on Drugs” policy. However, since it is a qualitative study, it does not offer empirical evidence. Therefore, more empirical data is needed to comprehend how these policies persist in impacting Americans’ perception of drug decriminalization.
The implementation of proactive police changes in identified high-risk communities was made possible by national law enforcement initiatives starting in the middle of the 1960s. According to Epp et al. (2017), some racialized groups continue to bear a disproportionate amount of the negative effects of Prohibition. Through a scientifically conducted survey around the Kansas City region, Epp et al. (2017) findings demonstrate that racial discrepancies are contrite in investigative car stops. From their findings, Epp et al. (2017) present that officers disproportionately stopped Black Americans and questioned and searched them. However, while this research offers insights on police racial profiling, its research methodology (self-reported survey) presents issues with bias, thereby making its findings less credible.
Notwithstanding the many nuances highlighted in this brief review of policing in the US, it is difficult to separate institutionalized racism within the US, both historically and currently, from the concurrent progress of the country’s legal and criminal structures. This review is important as it highlights the need to understand US law enforcement in relation to the anti-Black punishing history and, thus, a need for a paradigm shift.
2.2 Factors Perpetuating Racial Disparities in the Criminal Justice System
The disproportionate rates at which minority groups-drug offenders are incarcerated originate in racially disproportionate arrest rates (Weitzer & Brunson, 2015). The war on drugs, as well as the Mandatory Minimum sentence policies been waged in ways that have had the foreseeable consequence of disproportionately targeting minority groups- drug offenders.
2.2.1 War on Drugs (WOD)
Even though the Civil Rights Act was passed, there has been little progress in achieving the goal of equal opportunity (Weitzer & Brunson., 2015. Public policies have kept racial prejudice alive, although in increasingly intricate ways. One example of a governmental policy that exposes systemic racism is the War on Drugs. African American communities were primarily targeted by the policy’s introduction of drug possession, which resulted in the incarceration of many persons from minority backgrounds. Nixon established the War on Drugs, Reagan militarized and nationalized it, and Clinton exacerbated it (Turkington, 2017).
In a study done vis a systematic review of previous work, Ramirez (2022) argues that the WOD was never intended to stop substance usage in the US or stop drug importation into the nation. Instead, the WOD was created to criminalize and marginalize communities of color. To this end, the authors contend that The war on drugs was intended to be a fight against Americans of color. This explains why the WOD continues despite its shortcomings and the ease with which better options are available, all the while causing tremendous anguish for millions of Americans. This study presents qualitative data regarding WOD and its perpetuating impacts on the rates of arrests of people of color in the US. However, the focus on the historical aspect of the WOD policy impedes the research to focus on how this policy impacts drug offenders from minority backgrounds today.
On the contrary, Earp et al. (2021) present findings on how WOD impacts people of color today. Through a comprehensive review of previous literature, Earp et al. (2021) explain how the WOD harms modern communities and feeds systematic racism. The study argues that WOD diminishes the communities’ cohesion and safety, which is further worsened by augmented subjection to state-sanctioned brutality, police enforcement, as well as various different types of policing unfairly targeting Black and Brown communities. The research argues that the incidents of general usage and possession of drugs amongst people of color are the same as those amongst the White populace. Thus, the increased arrest, prosecution, conviction, and incarceration rates amongst minority people can and have resulted in the sustainment of long-lasting vulnerabilities and broadening socio-economic disparities, including the flourishing of illicit markets for drugs. However, while this study suggests decriminalizing drugs to reduce racial inequalities within the processes of criminal justice, it fails to discuss the steps or approaches needed to implement such a paradigm shift. More research is needed to address effective approaches toward the successful paradigm shift of decriminalizing drugs in the US.
2.2.2 The Mandatory minimum sentence
The 1986 “Anti-drug Abuse Act” introduces mandatory minimum penalties for a string of substance-related crimes, frequently longer sentences for comparatively lower degrees of use or possession. According to Gillette (2020), numerous states followed stricter drug crime enforcement legislation, including mandatory minimums. Based on a review of empirical works, Gillette (2020) argues that mandatory sentences disproportionately impact minorities since the recidivism rates are greater amongst racial minorities. While this study does not offer any empirical data, it defines how mandatory minimum sentences should be carefully applied and monitored to minimize racial disparities in the criminal justice process.
Similarly, according to Tuttle (2019), mandatory minimum sentences trigger a considerable sentence for lower than those of high-level drug trafficking. To approximate the extent of bunching at the 10-year mandatory minimum in crack-cocaine drug cases, Tuttle (2019) presents findings from federal cases; the results indicate augmented bunching for minor drug offenders in forms of prosecution discretion. These findings are essential as they demonstrate that the increasing racial disparity cannot be explained by differences in the seized amount of drugs, criminal history, or other factors of the crime, but rather, a measure of state-level racial animus can validate it. Additionally, the study’s conclusions provided insight into how prosecutorial discretion and possible racial prejudice act as contributors to racial inequalities in the sentence. This research has a limitation in that the cases used were not randomly selected, thereby posing a risk of bias in selection, distorting the ultimate bias measure.
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Crack Vs. Powdered Cocaine Phenomenon
Walker & Mezuk (2018) notes that the 1986 “Anti-Drug Abuse Act” imposes a 5-years mandatory minimum punishment for possessing crack weighing 5 grams. This implies that a sentence for possessing, even if it is an initial crime, would result in incarceration for five years. Contrarily, anyone has to be discovered possessing 500 grams of powder cocaine to serve five years mandatory sentence. This is a 100:1 ratio (Walker & Mezuk, 2018).
However, Lynch & Omari argue that crack’s lower prices, production ease, and distribution manner (small Amounts sold to individuals for personal usage) make it easily available in poor, urban communities, which includes neighborhoods for people of color. Though White people use crack, police efforts to control crack continually focus on urban black communities. Through theoretical frameworks that address the production of inequalities in institutional settings, Lynch & Omari (2018) present that rigorous crack indictments at the municipal level are a good indicator of racial disparities in conviction rates across the board. From these findings, one can infer that these aggressive crack prosecutions offer modest predictors of inequalities in final sentencing outcomes of crack or powdered cocaine-related crimes. However, more empirical evaluation is needed to efficiently uncover the conditions within which inequalities could and do thrive in legal systems.
Similarly, Palamar et al. (2015) investigated the risk of arrest as well as socioeconomic inequalities in the usage of powdered cocaine and crack. By using the “National Survey on Drug Use and Health” data, the study found that people who abuse crack are more likely to experience several recent or lifetime arrests. People of color had a greater probability of lifelong crack usage compared to whites and thus higher risks of imprisonment through the mandatory minimum policy. This study is important as it demonstrates that adults of lower socioeconomic settings (predominantly people of color) are at higher risks of being incarcerated due to crack usage than the more advantaged whites, who are more inclined to powder cocaine instead of crack. Nonetheless, this is a cross-section study; therefore, timing cannot be deduced. Thus, further research is needed to understand this phenomenon permanently to help generalize the findings at the national level.
3.1 Rehabilitation and treatment in the US
The precise composition of addiction treatment systems is influenced by political forces, lobbyists’ influence, and social movements rather than by the relative relevance of addiction-related disorders and their prevalence in society groupings (Klingemann, 2020). Keane (2018) argues that traditionally, aid for the treatment and prevention of substance misuse has been given separately from assistance for general healthcare. People needing rehabilitation or treatment for drug-related complications possess accessibility to a limited variety of medical pathways, commonly not paid for by insurance. This is because drug abuse has traditionally been viewed as a criminal or social issue. This research is important as it clearly demonstrates the failing rehabilitation system in the US. We can thus infer that the best way to deal with drug abuse and its consequences is to properly integrate programs aimed at preventing, treating and recovering.
From a prison perceptive, RecoveryFirst (2022) argues that while drug rehabs have been presented to drastically decrease re-incarceration rates in repeat offenders, Local and State governments and politicians in the US have shown less support to these programs within the prisons, where funding has declined rapidly. By presenting examples of Texas, Kansas, and California, the article demonstrates how recent and dramatic cuts to prison rehab programs have negatively impacted the rehabilitation and treatment systems in the country. This study is based on descriptive data, and thus more research is needed to investigate how cuts in funding of prison rehab programs are contributing to more cases of re-incarceration.
Similarly, Kerrison (2018) presents empirical findings of how rehabilitation programs in US prisons mold racial disparities in drug usage recovery. Using interview narratives, the study shows that White participants were more inclined to ultimately accept the label of an “addict” and talk about benefits and the help received throughout reintegration. Contrary, people of color were more inclined to disregard the treatment discourse and abandon the program. This study shows how treatment providers and the system at large are implicated in reproducing racial inequalities in drug abuse recovery systems. While this study has a risk of self-reported bias, the research provides insight into how the US rehabilitation and treatment system towards drug abuse continues to fail and the urgent need for reforms in service delivery.
3.2 How Other Nations Address Drug Crimes: Australia and Portugal
In 1987, the movement for alternative punishments in Australia started when South Australia decriminalized using and possession of marijuana (28 grams) and cultivating (less than ten plants) with a novel policy – the Cannabis Expiation Notice (CEN) system. In the following years, numerous states have decriminalized or reduced possession of slight volumes of marijuana (Kornhauser, 2018). Through a systematic evaluation of Australian secondary data on Australian drug courts, Kornhauser (2018) mentions that The Illicit Drug Diversion Initiative (IDD) is the most well-known police-based diversion program. Minor drug offenders participating in IDDI are redirected away from incarceration and situated within rehabs or drug education programs. This demonstrates that the Australian drug courts have been prominent in redirecting first-time minor drug offenders away from incarceration and more toward drug treatments and rehabilitation initiatives. While this study focuses on drug courts, it offers insight into the overall criminal system of the country and what needs to be done in the US.
Contrary to Australia’s diversion approach to drug crimes, Portugal employs the decriminalization approach. According to Gonçalves et al. (2015), drug usage in Portugal is commonly defined as a medical rather than a criminal problem. Through empirical evaluation of illegal drugs and their social outlays from the time the “Portuguese National Strategy for the Fight Against Drugs” was executed in 1999, Gonçalves et al. (2015) argue that under this approach, possessing illicit substances is addressed as a civil offense instead of a criminal one and people can possess a supply of drugs that would last a typical user up to 10 days. Law enforcement refers cases of minor possession to panels composed of more than three individuals with knowledge of drug usage and addiction, such as social workers, lawyers, and medical practitioners. This research demonstrates how in Portugal, drug offenders are provided with various non-punitive punishments like community work as well as drug rehabs rather than being criminally processed.
From these two developed economies, it is apparent that the US is far behind in how its criminal justice system addresses drug-related crimes. This further exacerbates the need for a paradigm shift towards a more decriminalized environment to reduce drug-related crimes and racial disparities present within the processes of criminal justice due to the disparate arrests, convictions, and imprisonments of people of color perpetuated by the current policies on drugs.
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Drug Courts: Application of Utility of Drug Courts
In order to prevent people with substance misuse disorders from ending up in local jails or prisons, one alternative to imprisonment is the employment of drug courts. This helps to decrease prison congestion, relapsing on the part of offenders, and recidivism. According to Sloas & Atkin-Plunk (2019), drug courts seek to abolish drug abuse and related criminal activity. Drug courts support rehabilitation by taking a collaborative effort with offenders who are dependent on alcohol and other drugs. To investigate how drug courts apply the utility of drug courts in terms of balancing the provision of rehabilitation and sanction-centered strategies to drug users, Sloas & Atkin-Plunk survey the criminal justice and criminology, undergraduate students. The study investigates the respondents’ attitudes toward punitive measures for violent and nonviolent drug crimes. Results show that there is equal support for punitive and rehabilitative-focused programs. This study, therefore, stresses the essentiality of the general public view on punishing drug-related offenses.
Accordingly, drug courts also offer easier accessibility to resources for drug treatment programs, rehab, and abstinence monitoring. According to Belenko (2018), the treatment starts within the courtroom and persists via the person’s engagement in the drug court. Through a systematic review, Belenko (2018) makes a case for the drug court’s value in fostering recovery and abstinence. The study argues that drug treatment courts offer a rehabilitative paradigm of justice that focuses on social and individual factors that could impact absitence and recovery. This study is essential as it demonstrates how drug courts integrate and employs numerous procedures and interventions that are conceptually correlated to recovery and desistance. However, this research has limitations in that it relies upon qualitative information. Thus, more study is required to understand how drug courts address numerous aspects associated with reductions in criminal conduct and drug use.
Also, the system of criminal justice has a unique capacity to influence an individual shortly after being arrested and thus persuade them to enter and remain in treatment. Shannon et al. (2018) investigate this drug court utility by identifying the program performance in terms of recidivism among the drug court participants. Using secondary data and assessing two-year recidivism, the study presents that graduates- 37.6% and those who abandoned the program- 95% had 2-years reoffending. These findings are essential as they demonstrate that early intervention and targeting of the drug court participants can enhance influence towards persuading the program participants and result in better outcomes.
4.1 How the Current Decriminalization Strategy Operates?
Increasingly, nations worldwide are changing their drug policies by eliminating the criminalization of those discovered possessing substances for individual usage. According to Rego et al. (2021), decriminalization eliminates criminal punishments for infringement of drug laws. These offenses are then reclassified as administrative violations. Thus, people possessing a small amount of drugs do not enter the criminal justice system; rather, they might be reproached with civil fines, drug treatment or drug education. According to Rego et al. (2021), decriminalization has paid off in Portugal, where drug offenders are treated like patients. As an outcome, hardly any novel addicts are registered while existing users are supported. The study analyzed national and international legal instruments concerning drugs. While the outcomes show that these policies are marked with contradictions and uncertainties, they positively impact harm reduction.
In April 2022, the National Drug Control Strategy was launched. The strategy is a decriminalization approach focused on high-impact harm reduction interventions such as Naloxone. In order to encourage the spread of harm reduction initiatives across the country, this plan asks on state policies to reform, as well as cooperation on harm reduction between public safety and public health authorities (White House, 2022). Currently, within the US, Individuals should not be imprisoned for using illegal drugs only. Rather, the federal courts will refer drug-using offenders to drug courts to receive the appropriate treatment to address their substance use disorder (Epp et al., 2021). This approach aims to encourage drug courts at the national level, where states can assist addicted people to get the aid and support needed.
4.2 Decriminalization policy in practice
4.2.1 Oregon Measure 110
Oregon is the one state with a policy decriminalizing the possession of drugs. As a result of the new legislation in Oregon, it is now a civil offense rather than a criminal one for personal possession of all restricted narcotics. In examining how the policy can be monitored for performance, Netherlands et al. (2022) note that the legislation, named Measure 110, lists a few exceptions even though it applies to all restricted drugs. For instance, it is still illegal to possess some drugs in greater quantities or in a manner that constitutes a “commercial drug crime.” Those discovered possessing restricted drugs may be fed up to $100 in civil court. Instead of paying the fine, offenders can undergo wellbeing evaluations, such as a test for drug usage disorders and might lead to proposed (but not required) treatment. Notably, there are no further penalties for failing to pay the fee or finish the evaluation (criminal or civil). Nonetheless, Netherlands et al. (2022) warn against earlier deductions regarding the policy’s success or failure, citing that the legislation’s effectiveness cannot be determined in a 1-year implementation period. While this study provides essential insight into Measure 110, it is speculative regarding its effectiveness. Thus, more data is needed to ascertain how effective the decriminalization policy really is.
Other studies are reporting the positive impact of the decriminalization policy. In empirical research, the Drug Policy Alliance (2022) presents that after a year of decriminalizing drugs, access to services via “Measure 110” has been used by 16000 individuals, where hundreds have escaped drug-related convictions. Contrary, Spencer (2022) notes that the policy has resulted in increased drug overdose fatalities. Via the synthetic control approach, the study findings indicate that Oregon’s decriminalization legislation resulted in 206 added drug-related fatalities during the remainder of 2021, representing a 27% augmentation. These findings are essential as they demonstrate that while the decriminalization policy has positive outcomes, it can also present negative results. However, it is impossible to obtain accurate findings when the policy has been operating for only one year. Additional studies are required to gain deeper understanding of the policy’s effect on drug-related offending in the long term.
4.2.2 Washington State Decriminalization Approach
While the decriminalization legislation has not been passed yet in Washington state, the state signed a bill earlier in 2022 that made drug possession a misdemeanor instead of a felony as it was under the old laws. This move allowed the system to respond to possession from a behavioral health perspective rather than a criminal perspective. According to Cannon (2022), under Washington’s Supreme Courts, arrest and conviction due to possession of a small amount of drug are deemed unconstitutional. If adopted, the decriminalization bill in Washington State will address drug offenders by referring them to drug rehabilitation, mental health programs, and other society social service initiatives without levying fines or other criminal sanctions (Santos, 2022). While these articles inform on the landscape for drug decriminalization in Washington state, there is a lack of scientific or empirical research that can reinforce these claims.
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Recommendations
On the whole, drug possession decriminalization of would not jeopardize public safety or health. Instead, decriminalization reduces the risks and injustices related to drug arrests and incarceration while also making drug usage safer. As the case of Portugal demonstrates, drug users may obtain governmentally-sanctioned health data on the risks associated with the usage of drugs and seek social, and medical support services when they are not worried about facing criminal charges (Rego, 2021). From the above literature review, this paper, therefore, recommends the following;
- The most argent step is eliminating the War on Drug policy that persists in effect in the US.
- The second most urgent step is Decriminalizing personal use and small-scale possession of all currently illegal substances.
- Remove any incarceration possibility as a result of defaulting in civil fines payment. This would help in reducing the rates of incarceration.
- The third step involves finding ways toward safe and legal regulation of the manufacture, sale, handling, supply, and usage of said substances. This is because decriminalization effectively reduces incarceration rates, particularly amongst minorities; decriminalization alone cannot eliminate the negative effects of black markets (Koch et al., 2016). Additionally, decriminalization sans legalization would keep drug users vulnerable to civil penalties, such as fines, which might still result in racially disproportionate incarceration in the event of fine defaults.
- Combining decriminalization and legalization would permit governments to establish “safe supply” programs for said drugs towards reducing the adverse impacts of illegal markets, eradicate the stigma surrounding drug users and enhance the accessibility of treatment options for drug use disorders.
- Governments might implement drug safety rules in cooperation with academics, legislators, and local officials, with competent officials examining manufacturing and distribution facilities to ensure compliance.
- Local and state authorities should offer government-sanctioned health advice and instructions regarding safe usage and possible risks. Additionally, they might restrict promotion, and advertising, establish suitable age restrictions, prohibit sales to intoxicated individuals, and more.
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Conclusion
While the US legislators no longer explicitly draft laws with racial discrimination that characterized the Prohibition era, this literature review has demonstrated that even neutral-looking legislation can have a disparate effect on people of color. For instance, as mentioned above, the War on Drugs resulted in an immense and disproportionate racial impact. It gave rise to other legislations, such as mandatory minimum sentences, which have continually resulted in diverse effects depending on race. Outside of policies and laws that unfairly target people from minority groups, biases from specific players within the processes of criminal justice, such as jury panels, judges, prosecutors, and police, also can disparately affect people from minority groups. As a result, these people encounter greater rates of being stopped, inspected, and arrested. They also encounter greater rates of detention, tougher pleas, and stiffer penalties than White people in the same circumstances.
This review has also revealed how sentencing of crack and powdered cocaine disproportionately impacts people of color based on crack’s low cost and easy availability compared to Whites, who are inclined to use powdered cocaine, which is more expensive. Moreover, we have seen how the US deals with drug crimes compared to countries such as Australia and Portugal; from this analysis, it is clear that the US criminal justice system needs reform in how it addresses drug crimes. This includes more use of drug courts.
This paper suggests the combination of drug decriminalization and legalization to lessen the racial inequalities in drug-related arrests, convictions, and incarceration in the US. This is because while decriminalization effectively reduces incarceration rates, particularly amongst minorities, decriminalization alone cannot eliminate the negative effects of black markets. Additionally, decriminalization sans legalization would keep drug users vulnerable to civil penalties, such as fines, which might still result in racially disproportionate incarceration in the event of fine defaults.
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Dynamic Pricing, Price Optimization And Predicting Customer Churn Essay Example
1.0 Introduction
Dynamic pricing, price optimization, and predicting customer churn are all methods used by businesses to maximize their profits and increase customer loyalty. Dynamic pricing is a pricing strategy where prices are adjusted based on market demand and other factors. Price optimization is the process of analyzing pricing data to determine the best pricing strategy for a product or service. Predicting customer churn is the process of using customer data to determine if a customer is likely to leave or stay with a company. These methods are used to increase profits, boost customer loyalty, and reduce customer churn.
2.0 What is “Dynamic Pricing”
Dynamic pricing is the process of adjusting prices based on market demand and other factors. This method allows businesses to be more competitive and to increase their profits by charging different prices for different customers (Cain et al., 2020). Dynamic pricing can also be used to reduce customer churn by offering customers discounts or incentives to remain loyal to the company.
2.1 How Dynamic Pricing works
Dynamic pricing works by collecting data on customer demand, market conditions, and other factors. This data is then used to adjust prices accordingly. For example, a business may charge a higher price during peak times when demand is higher or offer discounts during times when demand is lower (Sahinkaya et al., 2021). This allows the business to maximize its profits while remaining competitive in the market.
2.2 Benefits of Dynamic Pricing
The main benefit of dynamic pricing is that it allows businesses to maximize their profits and remain competitive. Dynamic pricing allows businesses to maximize their profits by charging different prices for different customers based on demand and other factors (Webmaster et al., 2018). By adjusting prices according to customer demand and other factors, businesses can attract more customers and increase their sales. It also allows businesses to reduce customer churn by offering discounts and incentives to loyal customers. Dynamic pricing can help businesses identify customer segments that are more likely to purchase their products or services (Kropp et al., 2019). This allows businesses to target their marketing efforts and increase their profits. Dynamic pricing can also give businesses a competitive advantage by allowing them to adjust prices quickly in response to changing market conditions. It can also lead to increased customer satisfaction as customers are able to get the price they want for a product or service.
3.0 Case studies of Dynamic Pricing
3.1 Case study #1: Parking lot rates.
In 2019, the City of San Francisco implemented dynamic pricing for its parking lots. The city used data on parking lot demand to adjust the prices for its parking lots. During peak times, when demand was higher, the city raised prices to discourage people from parking and reduce congestion (Singhal et al., 2019). During times when demand was lower, the city lowered prices to encourage people to use the parking lots (You, 2022). This allowed the city to maximize its profits and reduce congestion.
3.2 Case study #2: Airbnb
Airbnb is an online marketplace that allows people to list their properties for short-term rentals. Airbnb uses dynamic pricing to adjust prices based on demand and other factors. During peak times, when demand is higher, Airbnb raises prices to maximize profits. During times when demand is lower, Airbnb lowers prices to attract more customers (Dynamic Pricing Strategy for Airlines, 2021). It allows Airbnb to maximize its profits while remaining competitive in the market.
3.3 Case study #3: NFL & Sports Teams
The National Football League (NFL) and other professional sports teams have started using dynamic pricing to adjust ticket prices based on demand. During peak times, when demand is higher, prices are raised to maximize profits (Dynamic pricing in Sports, 2022). During times when demand is lower, prices are lowered to attract more customers. This allows the teams to maximize their profits while remaining competitive in the market.
3.3.1 Uber’s dynamic pricing
Uber uses dynamic pricing to adjust prices based on demand and other factors. During peak times, when demand is higher, Uber raises prices to maximize profits. During times when demand is lower, Uber lowers prices to attract more customers (Burley, 2014). This allows Uber to maximize its profits while remaining competitive in the market. Uber also uses dynamic pricing to incentivize drivers. During peak times, when demand is higher, Uber offers higher rates to drivers to encourage them to pick up more passengers. This allows Uber to increase its profits and reduce customer wait times.
3.3.2 Predicting Customer Churn
Predicting customer churn is the process of using customer data to determine if a customer is likely to leave or stay with a company. This process involves collecting data on customer behaviour and using predictive analytics to identify customers at risk of leaving the company. By using predictive analytics to identify customers at risk of leaving, companies can take steps to reduce customer churn (Baghla & Gupta, 2022). Companies can use customer data to identify the reasons why customers are likely to leave and then develop strategies to address those issues. For example, companies can use customer data to identify customers who are unhappy with their service and then offer discounts or incentives to retain them. Companies can also use customer data to identify customers who are likely to leave and offer them discounts or incentives to remain loyal.
4.0 Vendor Overview
4.1 Vendor #1: Totango:
Totango is a customer success platform that helps companies reduce customer churn and increase customer loyalty. Totango’s platform provides insights into customer behaviour, allowing companies to identify customers who are at risk of leaving. It also provides tools to track customer interactions and engagements, allowing companies to identify issues that may be causing customers to leave. Totango also provides tools to automate customer success processes, allowing companies to reduce customer churn and increase customer loyalty.
4.2 Vendor #2: Prisync
Prisync is a dynamic pricing platform that helps companies optimize their pricing strategies. Prisync’s platform provides insights into market conditions, allowing companies to adjust prices accordingly. It also provides tools to track competitor prices, allowing companies to remain competitive in the market. Prisync also provides tools to automate pricing processes, allowing companies to adjust prices quickly in response to changing market conditions.
4.3 Vendor #3: Skuuudle
Skuuudle is a customer churn prediction platform that helps companies predict customer churn and take action to prevent it. Skuuudle’s platform provides insights into customer behaviour, allowing companies to identify customers who are at risk of leaving. It also provides tools to track customer interactions and engagements, allowing companies to identify issues that may be causing customers to leave. Skuuudle also provides tools to automate customer success processes, allowing companies to take action to reduce customer churn and increase customer loyalty.
4.4 Vendor #4: Price2Spy
Price2Spy is a price monitoring platform that helps companies optimize their pricing strategies. Price2Spy’s platform provides insights into market conditions, allowing companies to adjust prices accordingly (Price2Spy®, 2019). It also provides tools to track competitor prices, allowing companies to remain competitive in the market. Price2Spy also provides tools to automate pricing processes, allowing companies to adjust prices quickly in response to changing market conditions.
5.0 Challenges
5.1 Low churn rate:
Dynamic pricing and predicting customer churn can be challenging for businesses with low churn rates. Low churn rates indicate that customers are satisfied with the product or service and are unlikely to leave (Leung, & Chung, 2020). As such, businesses with low churn rates may not be able to benefit from dynamic pricing and customer churn prediction strategies.
5.2 Data accuracy:
Dynamic pricing and predicting customer churn strategies require accurate data. If the data used to make pricing decisions is inaccurate or out of date, it could lead to incorrect pricing decisions that could negatively impact profits.
5.3 Customer segmentation:
Dynamic pricing and predicting customer churn strategies require businesses to segment their customers. This can be challenging as businesses need to identify the right customer segments and develop strategies to target them (Gladilin & Saitov, 2019). If the customer segments are not identified correctly, it could lead to incorrect pricing decisions that could negatively impact profits.
5.4 Implementation:
Implementing dynamic pricing and predicting customer churn strategies can be a time-consuming and complex process. Businesses need to identify the right tools and strategies to use and integrate them into their existing systems. This can be a difficult process, and businesses may require the help of experts to ensure the process is successful.
5.5 Churn event censorship:
Dynamic pricing and predicting customer churn strategies require businesses to be aware of churn events. However, this can be challenging as businesses may not be aware of all the churn events that occur. If businesses are not aware of all the churn events, they could miss out on opportunities to prevent customer churn.
5.6 Feature responsiveness:
Dynamic pricing and predicting customer churn strategies require businesses to identify the right features to use in their models. If businesses do not choose the right features, their models may not be responsive and may not provide accurate predictions (Tang et al., 2020). This could lead to incorrect pricing decisions that could negatively impact profits.
5.7 Customer perception:
Dynamic pricing and predicting customer churn strategies can be challenging for businesses as customers may view them negatively. Customers may view dynamic pricing as unfair and may be less likely to purchase products or services if they perceive the pricing as unfair (Iranmanesh et al., 2019). This could lead to reduced sales and customer churn.
5.8 Algorithm errors:
Dynamic pricing and predicting customer churn strategies require businesses to use algorithms to make pricing and churn predictions. However, algorithms are not perfect and may make errors that could lead to incorrect pricing decisions or inaccurate churn predictions. This could lead to reduced profits and customer churn.
5.9 Change in customer behaviour:
Dynamic pricing and predicting customer churn strategies require businesses to continuously monitor customer behaviour. However, customer behaviour can change quickly, and businesses need to be able to adjust their strategies accordingly. If businesses are not able to keep up with changing customer behaviour, it could lead to reduced profits and customer churn.
6.0 Recommendations
6.1 Regularly monitor customer behaviour:
Businesses should regularly monitor customer behaviour and use customer data to identify customers who are at risk of leaving. By monitoring customer behaviour, businesses can quickly identify issues that may be causing customers to leave and take steps to address them.
6.2 Develop customer loyalty programs:
Businesses should develop customer loyalty programs to reward customers for their loyalty. Loyalty programs can help businesses reduce customer churn by incentivizing customers to remain loyal.
6.3 Create personalized customer experiences:
Businesses should create personalized customer experiences to increase customer satisfaction. Personalized experiences can help businesses build relationships with customers and reduce customer churn.
6.4 Use dynamic pricing:
Businesses should use dynamic pricing to adjust prices based on demand and other factors. Dynamic pricing can help businesses optimize their pricing strategies and maximize their profits.
6.5 Utilize predictive analytics:
Businesses should utilize predictive analytics to identify customers at risk of leaving and take action to prevent them from leaving (Manivannan et al., 2021). Predictive analytics can help businesses identify customers who are likely to leave and develop strategies to retain them.
6.6 Adopt prediction tools:
Businesses should adopt prediction tools such as Totango, Prisync, Skuuudle, and Price2Spy to automate customer success processes and reduce customer churn. These tools can help businesses quickly identify customers who are at risk of leaving and take action to retain them (Srigopal, 2018).
6.7 Track their performance:
Businesses should track their performance to measure the effectiveness of their strategies. By tracking their performance, businesses can identify issues that may be causing customer churn and take steps to address them.
6.8 Improve their services accordingly:
Businesses should continuously improve their services to increase customer satisfaction. Improving services can help businesses reduce customer churn and increase customer loyalty (Sheldon, 2018).
6.9 Find ways to innovate:
Businesses should look for ways to innovate and stay ahead of their competition. Innovation can help businesses remain competitive and reduce customer churn.
6.9.1 Competitive advantage over other companies:
Businesses should strive to gain a competitive advantage over other companies by using customer data to identify customer segments and target them with the right pricing strategies. This can help businesses maximize their profits and reduce customer churn.
6.9.2 Predict the customers who might leave:
Businesses should use predictive analytics to predict which customers are likely to leave and take steps to retain them. Predictive analytics can help businesses identify customers who are at risk of leaving and develop strategies to retain them (Pustokhina et al., 2021).
6.9.3 Identify “pain points” which are sometimes hard to see:
Bad quality and absent features:
Businesses should identify bad quality and absent features that may be causing customers to leave. By identifying these issues and addressing them, businesses can reduce customer churn and increase customer loyalty.
Unpleasant designs:
Businesses should also identify any unpleasant designs that may be causing customers to leave. By addressing these issues, businesses can increase customer satisfaction and reduce customer churn.
Poor customer service:
Businesses should also identify any issues with their customer service that may be causing customers to leave. By improving their customer service, businesses can increase customer satisfaction and reduce customer churn (Sunith, 2022).
6.1 Implication for Managers
Dynamic pricing, price optimization, and predicting customer churn are all methods used by businesses to increase profits and reduce customer churn. For managers, this means that they need to be aware of these methods and the benefits they can bring to their business (Wells, 2022). Managers should ensure that they are collecting accurate customer data, segmenting their customers correctly, and using the right tools to optimize their pricing strategies (Simchi-Levi, 2017). They should also ensure that they are utilizing predictive analytics to identify customers at risk of leaving and taking action to retain them (Ramesh, 2022). Managers should strive to innovate and stay ahead of their competition by adopting new technologies and strategies. By utilizing dynamic pricing, price optimization, and predicting customer churn strategies, managers can increase their profits, boost customer loyalty, and reduce customer churn (Shafkhan et al., 2021). Dynamic pricing can help increase a business’s profits and improves your control over pricing strategies. Predicting customer churn allows companies to understand the reason why customers are churning in order for them to implement new strategies which help increase the retention rate (Xiahou & Harada, 2022). The usage of dynamic pricing and predicting customer churn are two essential key factors for every business in order to take proactive action regarding the value of one specific good or service.
7.0 Conclusion
Businesses utilize a variety of tactics to boost profits and lower customer churn, including dynamic pricing, price optimization, and customer turnover prediction. These tactics can aid companies in maximizing their earnings, lowering client churn, and maintaining market competitiveness. However, putting these techniques into practice can be difficult, so companies must make sure they are gathering reliable customer information, effectively segmenting their clientele, and optimizing their pricing strategies with the appropriate tools and methods. Businesses can raise earnings, increase customer loyalty, and lower customer churn by implementing dynamic pricing, price optimization, and customer churn prediction tactics.
8.0 Reference
Simchi-Levi, D. (2017, September 7). The New Frontier of Price Optimization. MIT Sloan Management Review. https://sloanreview.mit.edu/article/the-new-frontier-of-price-optimization/
Baghla, S., & Gupta, G. (2022). Performance Evaluation of Various Classification Techniques for Customer Churn Prediction in E-commerce. Microprocessors and Microsystems, 94, 104680.
Burley. (2014, March 11). A Deeper Look at Uber’s Dynamic Pricing Model – Above the Crowd. Above the Crowd. https://abovethecrowd.com/2014/03/11/a-deeper-look-at-ubers-dynamic-pricing-model/
Cain, B., Nikolai Saporoschetz, & Ginting, T. (2020). Out of the Box: A Dynamic Pricing Model for Professional Sports Teams. Purdue E-Pubs. https://docs.lib.purdue.edu/jpur/vol10/iss1/8/
Dynamic pricing in Sports: Maximizing Ticket Revenue. (2022, February 24). Price2Spy® Blog. https://www.price2spy.com/blog/dynamic-pricing-in-sports/
Dynamic Pricing Strategy for Airlines: Exploring Current Problems and Adopting Continuous Pricing. (2021). AltexSoft. https://www.altexsoft.com/blog/dynamic-pricing-airlines/
Gladilin, P., & Saitov, I. (2019, November). Data-Driven Approach for Dynamic Pricing for Decision Making Systems in Marketing and Finance. In 2019 25th Conference of Open Innovations Association (FRUCT) (pp. 102–108). IEEE.
Iranmanesh, S. H., Hamid, M., Bastan, M., Hamed Shakouri, G., & Nasiri, M. M. (2019, July). Customer churn prediction using artificial neural network: An analytical CRM application. In Proceedings of the International Conference on Industrial Engineering and Operations Management, Pilsen, Czech Republic (pp. 23–26).
Kropp, L. A., Korbel, J. J., Theilig, M. M., & Zarnekow, R. (2019). Dynamic pricing of product clusters: a multi-agent reinforcement learning approach.
Leung, H. C., & Chung, W. (2020). A dynamic classification approach to churn prediction in the banking industry.
Manivannan, R., Saminathan, R., & Saravanan, S. (2021). An improved analytical approach for customer churn prediction using Grey Wolf Optimization approach based on stochastic customer profiling over a retail shopping analysis: CUPGO. Evolutionary Intelligence, 14(2), 479-488.
Price2Spy® – Competitor price monitoring. (2019). Price2spy.com. https://www.price2spy.com/
Pustokhina, I. V., Pustokhin, D. A., Aswathy, R. H., Jayasankar, T., Jeyalakshmi, C., Díaz, V. G., & Shankar, K. (2021). Dynamic customer churn prediction strategy for business intelligence using text analytics with evolutionary optimization algorithms. Information Processing & Management, 58(6), 102706.
Ramesh, C. (2022). Bio-Inspired Approach for Customer Churn Prediction.
Sahinkaya, G. O., Erek, D., Yaman, H., & Aktas, M. S. (2021, June). On the Data Analysis Workflow for Predicting Customer Churn Behavior in Cargo and Logistics Sectors: Case Study. In 2021 International Conference on Electrical, Communication, and Computer Engineering (ICECCE) (pp. 1-6). IEEE.
Shafkhan, M. T. M., Jayasundara, P. R. S. S., Kariyapperuma, K. A. D. R. L., Lakruwan, H. P. S., & Rupasinghe, L. (2021, December). Price Optimization and Management. In 2021 3rd International Conference on Advancements in Computing (ICAC) (pp. 419-424). IEEE.
Sheldon, H. (2018, January 26). How Churn Prediction Can Improve Your Business – Baremetrics. Baremetrics. https://baremetrics.com/academy/churn-prediction-can-improve-business
Singhal, S., Anand, A., & Singh, O. (2019). Understanding multi-stage diffusion process in the presence of attrition of potential market and related pricing policy. Yugoslav Journal of Operations Research, 29(3), 393–413.
Srigopal, V. D. (2018). Predicting customer churn risks and optimizing retention investments using reliability and maintenance engineering.
Sunith. (2022, May 31). The Importance of Customer Churn Analysis: How to Do It? Kapture CRM; KaptureCRM. https://www.kapturecrm.com/blog/the-importance-of-customer-churn-analysis-how-to-do-it/
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Xiahou, X., & Harada, Y. (2022). B2C E-Commerce Customer Churn Prediction Based on K-Means and SVM. Journal of Theoretical and Applied Electronic Commerce Research, 17(2), 458-475.
You, E. (2022, April 14). Parking Industry. Parking Industry. https://www.parkingindustry.ca/parking-revenue/everything-you-need-to-know-about-dynamic-pricing-for-parking
Dynamic Psychotherapies Book Review Essay Example For College
Core Competencies in Brief Dynamic Psychotherapy is a 213 paged book authored by Jeffrey L. Binder and Ephi J. Betan that addresses the vital clinical competencies required in practice to conduct brief dynamic therapy. The authors talk about the conceptual underpinnings of their therapy approach and how this framework is applied to establishing and sustaining a therapeutic relationship, conducting assessments, developing cases, putting treatment plans into action, terminating treatments, and evaluating treatments. A multicultural viewpoint and attention to ethical problems are present in every topic. Binder and Betan frequently use relevant research results to connect practice and research. The fundamental ideas and principles of brief dynamic psychotherapy are presented in this text clearly and straightforwardly, with many clinical examples taken from an in-depth patient and therapist interactions. Undergrads in the psychological fields of healthcare and starting therapists will find this book helpful. Experienced psychotherapists will discover a new take on time-tested concepts regarding the therapeutic use of creating personal narratives in Binder and Betan’s discussions on case formulation and therapeutic discourse. The authors always explicitly link the elements of their methodology to the skills required of the short dynamic therapist.
Jeffrey L. Binder is currently a clinical professor of psychiatry at Vanderbilt University Department of Psychiatry, Nashville, an instructor at the Nashville Center for Psychoanalysis and Psychodynamic Psychotherapy, and a professor, program choir, and dean at Georgia School of Professional Psychology in Atlanta, among other positions. Binder has presented in several professional meetings and authored and co-authored several books and peer-reviewed journals, with over 45 years of experience. Core Competencies in Brief Dynamic Psychotherapy has credible findings that can impact the knowledge of scholars, therapists, and students who wish to venture into this field of practice.
Ephi J. Betan is a licensed clinical psychologist holding a Ph.D. in Psychotherapy and treatment focus. Betan received his Ph.D. in Clinical Psychology from the University of Kansas after completing two years as a Post doctor at the Menninger Hospital in Topeka. With over 25 years of experience, the findings, methods, and conclusions made in Core Competencies in Brief Dynamic Psychotherapy can be adopted as credible and supported.
The book is introduced by the clear definition of brief Dynamic Psychotherapy clinical competencies; the authors postulate that Brief Dynamic Psychotherapy (BDP) refers to a time-sensitive version of the psychodynamic approach used in therapy for adults. Additionally, this traces the origin of this practice method to the works of Sigmund Freud, who always focused on modifying theories of psychopathology and personality. In the following section, the authors define competencies and their components; Betan and Bidden define competency as “a cluster of capacities comprising of complex performances in a specific domain of professional activity.” However, the authors emphasize that the definition they offered should not be confused as a level of performance for a given situation or standards set for meeting minimal levels of standards (Binder & Betan, 2013)
The second chapter Understanding the Conceptual Basis of Brief Dynamic Psychotherapy, offers clarity on how practitioners can practice a clear grasp of clinical theories that would help them to process and make sense of the patient’s needs which in turn helps them to implement clear and concise strategies for intervention. Using this model of BDP, the practitioner can learn to pay attention to their patient’s interpersonal needs, which fosters top-quality therapeutic inquiry increasing the practitioner’s insight into their patient’s struggles. The first core competency given by the authors is applying a conceptual foundation when addressing a patient. Each patient brings a special combination of internal difficulties, interpersonal needs, and related styles, and the skilled therapist is capable of applying theoretical information in a way that is relevant to each patient (Binder & Betan, 2013)
Theoretical information that cannot be applied to the distress of a particular individual is unlikely to be beneficial. Coherent conceptual frameworks are necessary for competence in applying theory to produce a pertinent narrative of a patient’s fundamental challenges. The conceptual framework presented in this chapter includes personality development, psychopathology, and the therapeutic process—three crucial components of a sound theory. Understanding a patient, creating a case conceptualization, and formulating an intervention approach are all aided by theories identified by these authors. The book further offers critical insight into conceptual models of personality development, domains of personality functioning and interpersonal relating, self-functioning, and dual motivational strivings in attachment and autonomy (Binder & Betan, 2013)
Creating an effective environment and safe space for the patients is crucial to ensure that the patient feels free to open up. However, this process is not easy, as Ephi J. Betan and Jeffrey L. Binder show in the third chapter Forming an Effective Therapeutic Alliance. The authors argue that inviting the patient to share their story is imperative to begin the therapeutic process effectively. At the same time, the practitioner has to show concern, interest, and compassion. The authors argue that showing interest makes the patient feel listened to and understood, which pushes them to open up even more. This chapter focuses on building a strong relationship with the patient as the cornerstone of treatment. Although a solid therapeutic relationship is important in all major psychotherapeutic modalities, this book focuses on crucial elements that are particularly pertinent to short dynamic psychotherapy. The approach used by the authors in this chapter emphasizes interpersonal relations and other key relational factors that understand and address patient difficulties. This book offers strategies for establishing an effective therapeutic relationship in BDP, such as the therapist’s accommodation of the patient’s needs and concerns, which can be shown through listening, empathy, curiosity, and reciprocity to make a connection.
In the fourth chapter Maintaining an Effective Therapeutic Alliance, the authors of this book bank on the benefits of establishing and maintaining a therapeutic alliance with the patient. Ephi J. Betan and Jeffrey L. Binder cite Stiles & Goldsmith (2010), who posit that.” In order to maximize the likelihood of a positive treatment outcome, the ideal patient-therapist relationship would reflect a linear increase in the strength of the therapeutic alliance throughout therapy”. The remaining sections of this chapter illustrate how responsiveness and regulating negative processes are two crucial competencies that are crucial for sustaining a healthy therapeutic partnership in BDP. In order to be responsive, a therapist must be aware of both the nature of the patient’s participation in collaborative work and the status of the patient-therapist relationship. No matter how closely a therapist wants to follow the guidelines of a specific treatment model, he or she must be prepared to adapt as the therapy goes on in order to maintain the patient’s confidence and cooperation.
The fundamental therapeutic skills needed to deliver short dynamic treatment are covered in this book. The conceptual underpinnings of their treatment model are discussed by authors Jeffrey L. Binder and Ephi J. Betan, as well as how this framework may be used for assessment, case conceptualization, implementation of a treatment regimen, discontinuation, and treatment evaluation. Every topic includes awareness of ethical problems and a multicultural viewpoint. In conclusion, this book is a good read, written with precision, clarity, and critical thinking that contributes to the medical knowledge available in clinical and therapy practice today.
Reference
Binder, J. L., & Betan, E. J. (2013). Core Competencies in Brief Dynamic Psychotherapy. Routledge.