This is fairly clear - Indonesia, for example, has the death penalty for most drug-related offences, and despite this, is one of the drug capitals of the world.
You're talking about deterrence, or lack of it, which my proposal does not address. My proposal is based on simple mathematics: after the hanging, there's one more space available in prison. Of course, there's one fewer space on Boot Hill, so one could argue that my proposal merely changes the venue of the crowding.
Believe me, having to live hand-to-mouth is motivation enough.
Jp has summed up the fatal flaws in your argument quite well, so I won't elaborate on them.