Mexico’s President Andrés Manuel López Obrador has promised to use assets seized from criminal actors to fund a wave of social spending. This novel shift of a longstanding practice in other nations is, however, not without its defects.

On May 14, López Obrador promised the creation of a new governmental entity called the Instituto para Devolverle al Pueblo lo Robado (IDPR), or the Institute for the Return of Stolen Goods to the People. The new agency’s mandate will be to use assets recovered from criminals to fund a broad range of social spending, including the construction of schools, athletic fields, and other community facilities. López Obrador estimated that the IDPR would be able to distribute 1.2 billion pesos (equivalent to roughly $63 million) this year alone.

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Mexico first passed an asset seizure law in 2009. In so doing, it followed in the footsteps of the United States, Italy, and Colombia, where authorities have used expansive powers to confiscate many billions of dollars of ill-gotten gains. In recent years, other Latin American nations like Argentina have followed suit.

López Obrador’s proposal follows a series of recent efforts to reform the 2009 law. Legislative efforts to expand the application of the law began during the transition from the Enrique Peña Nieto administration to the current government, first gaining passage in the Senate in November 2018. Following subsequent approval in the Chamber of Deputies, in March 15, 2019, the new rules allowing for asset seizure in cases of corruption and oil theft, among various other crimes, went into effect.

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López Obrador has a long history of publicity stunts that ultimately have little practical impact, from pledges to abolish political corruption to the creation of the new National Guard. The concurrent auction of seized luxury goods at the presidential palace adds to the sense that the current policy push is simple pandering.

But while there is no clear precedent for such an asset seizure program in other countries, at least in theory, there is no reason that confiscated goods cannot fund social infrastructure projects.

Civil asset forfeitures in the United States have been used to support a variety of specific programs, most controversially bolstering local police departments’ budgets. If properly managed, López Obrador’s idea could create a perennial pool of needed development spending.

However, there remain a number of barriers to the IDPR emerging as an effective policy tool.

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First of all, López Obrador’s expectation of 1.2 billion pesos annually is wildly optimistic, as the law has been applied only in rare cases. In 2010 and 2011, Mexico recovered just eight assets in three different cases. During the law’s first six years of existence, federal authorities successfully applied it on fewer than 50 occasions. Colombia, in contrast, has tens of thousands of forfeiture cases currently in process.

But even if the IDPR turns into a runaway success, it still risks facing the same perverse incentives that have turned asset forfeiture into such a controversial topic in the United States. Because their budgets can be augmented by forfeitures, many local police departments have engaged in rampant abuses, which led to the practice being curtailed by a unanimous Supreme Court ruling in 2019. If the IDPR becomes a powerful institution dependent on a steady drumbeat of seizures, the same system that encourages abuses could prevail, even if the ostensible goal of the program is laudable.

It also bears mentioning that Mexico’s inability to seize assets do not represent a major defect in the nation’s security challenges. Many experts believe targeting the illegal financing that underlies criminal networks—a strategic approach of which asset forfeitures form a part—are overhyped, and have little potential to improve public safety.

Crackdowns on illicit finance do little to limit violence or target other societal harms stemming from organized crime, and there are few, if any, examples of a criminal group being rendered impotent by attacking its profits.

Finally, López Obrador’s comments in announcing the program are telling of how he views the use of seized assets. He told the assembled press that when the Mexico City mansion of Chinese national Zhenli Ye Gon—who was later arrested in the United States and extradited to Mexico on drug charges—was raided with more than $200 million in cash inside in 2007, no one knew what happened to the money thereafter.

López Obrador used this example to show the corruption surrounding illegal asset seizures in past administrations and to highlight how his would be different. But he could certainly provide a more concrete answer to this ostensible mystery were he so inclined. The most likely explanation is that the money was handed over to the Mexican treasury, at which point it was absorbed into the government’s larger scope of operations. The nation’s annual spending approaches $300 billion annually, so Zhenli’s seizure would have had no demonstrable impact on government activities.

If wisely managed, redirecting asset seizures into the national budget can be a positive step. But it is a fallacy to think that this plan will have any real impact without some more fundamental changes in government transparency and institutional corruption.