Stumbled across this article on Portugal's decriminalization program. According to the article, rates of heroin addiction as well as HIV infection have plummeted since possession was decriminalized. This matches well with what I've been hearing in other places, as we accumulate evidence we increasingly find that outright regulation almost always works poorly. It's more effective to focus on focusing on the actual problems caused by "bad" behaviors rather than focusing directly on these behaviors. Drug treatment and counseling works, heavy punishment doesn't. This can be extended to many different fields, not just narcotics enforcement.
One of these days I'll have to do more direct research on this particular subject, I'm curious what the UN reports are saying.