Markets in everything: Report Mexican drug money, keep some

Curious what the Marginal Revolution folks would make of Mexico’s newest plan to encourage citizens to report money-laundering:

Under the new reward plan, those who report crimes of suspected money laundering – by phone, e-mail, or face-to-face – could receive up to 25 percent of the value of whatever is seized, be it money or land or goods. The exact amount would be determined by a special committee.

Some say that it, like the money laundering law, places citizens in charge of functions that the police or prosecutors should be carrying out.

“This moves the burden to the individual,” says Arturo Pueblita Fernandez, a professor of law at the Iberamerican University in Mexico City. “It is not a frontal attack on money launderers.”

So long as authorities aren’t entirely crowdsourcing their efforts, I don’t really see the problem with rewarding individuals courageous enough to report criminal activity at a level commensurate to the risk they’re taking. The Christian Science Monitor‘s article also raises the possibility that drug gangs might use the program to undercut cinnercuak rivals. But as long as the government is keeping at least 75 percent of the money, it would seem to be in the state’s long-term interests if the gangs entered a race to the bottom of ratting each other out.