A report  by The Sentencing Project  released this week shows that the number of African-Americans in state prisons for drug crimes dropped 21.6% from 1999-2005, a reduction of more than 31,000 individuals. And while the number of people incarcerated is still at historic highs, there was only a very slight increase (0.8%) in state drug offender prison populations during this six year period. This compares with a 1200% increase between 1980 and 1999. At the same time the federal prisons have not seen either a decrease in racial disparities among incarcerated drug offenders or a leveling in the overall drug offender population.
Potential Causes: While the evidence is not conclusive, comparison of corrections data at the federal and state level, combined with data on arrest and conviction rates, suggests that the decreasing prevalence of crack cocaine, combined with some less biased criminal justice practices are the major drivers of the shift. The crack cocaine “epidemic” drove racial disparities in state incarceration rates in two ways — by focusing enforcement resources on minority communities, and in some states by applying harsher mandatory minimum sentences for crack cocaine over cocaine. Significantly, there is evidence that racial bias in police and prosecution practices that has been a hallmark of our criminal justice systems is abating, as shown by:
Decrease in Arrest Rates — The proportion of adult African-Americans arrested for drug offenses (excluding marijuana, which rarely leads to incarceration) decreased 17.2% from 1999 to 2005. Either because of changes in patterns of drug use and sale, or through more enlightened policing strategies such as preventing racial profiling, clearly African-Americans and heavily African-American communities appear to be less of a focus for law enforcement.
Diversion and Sentencing — There has been a steady shift in the drug policies of many states toward a more public health oriented approach. This has been manifested in the growth of treatment-oriented courts  from when the first began in 1989 to the 1,600 active now. Additionally, decreases in the minimum sentences for crack as opposed to powder cocaine are likely contributing to the decline.
Policies to Build on This Trend: There are a number of policy options that can help states wring racial disparities out of their criminal justice systems to continue the improvements identified in the Sentencing Project's study, including using Racial Impact Statements , Corrections Reform , Eliminating Mandatory Minimum Sentencing , and Prohibiting Racial Profiling .
The Sentencing Project - The Changing Racial Dynamics of the War on Drugs 
The Sentencing Project - Drug Courts: A Review of the Evidence
Progressive States Network - Racial Impact Statements 
Progressive States Network - Budget Savings From Reducing Incarcerations 
Families Against Mandatory Minimums 
American Civil Liberties Union - Racial Profiling