Migration and Development A new research and policy agenda Dhananjayan Sriskandarajah Everybody, it seems, is talking about migration these days. Whether it s the most distinguished academic or the proverbial man on the bus, everyone seems to have a view on its merits. From the United Nations down to local authorities, public bodies of all sorts want to know how to manage it. Politicians across the spectrum know that there are votes to be gained (or lost) from it. And newspaper editors, especially in countries such as the United Kingdom, know that migration sells copies. Much of this interest is about the scale and impact of immigration in developed countries. But there is also increasing interest in the other side of the migration coin the scale and impact of emigration in developing countries. Researchers, policymakers, development agencies and multilateral organisations have been trying to understand the nature of the relationship between migration and economic development, and what might be done to optimise the impact of migration on Dhananjayan Sriskandarajah is Senior Research Fellow and Head of the Migration, Equalities and Citizenship Team at the Institute for Public Policy Research, UK. the prospects of the world s poorest countries. This interest is by no means new the so-called brain drain of highly skilled people from developing countries has been of concern for decades (see, e.g., Bhagwati, 1976) but the intensity of the interest is unprecedented. However, this burgeoning literature has yet to deliver satisfactory answers to some of the most fundamental research and policy questions in this area: What drives international migration? What determines its impacts on poor sending countries? What can be done to manage these impacts? And which interventions will actually be feasible politically? Indeed, while migration can matter as much as trade, aid or investment to the development of some countries, we know so much more about the role of these other factors than we do about the role of migration. Given that the scale, complexity and impact of international migration are likely to continue to increase over time, this is an unsatisfactory situation. An obvious suggestion is that we need more empirical data on migration and development. But the real priorities for research and policy lie WORLD ECONOMICS Vol. 6 No. 2 April June 2005 141
Dhananjayan Sriskandarajah elsewhere: to develop better methodologies for understanding the relationship and to develop fresh, workable interventions for optimising the impacts of migration. This will only happen if we move beyond many of the assumptions that litter the literature (in particular, the pessimism about brain drain and the newfound optimism about remittances) and many of the unhelpful policy prescriptions that linger in policy circles (in particular paying compensation to developing countries and restricting mobility). I suggest five priorities for a new research and policy agenda on migration and development. 1. Beyond brain drain Brain drain is perhaps the best-known and most intuitively appealing concept within this literature. Yet, as Oded Stark (see his contribution in this issue) and others have pointed out, the departure of highly skilled people from developing countries is not always and necessarily a bad thing. Stark has yet to win the theoretical debate conclusively (cf. Stark with Faini, 2003; Schiff 2005) but his findings raise two important possible implications for present purposes. First, policies to restrict emigration from the developing world often an appealing option for developing country policymakers concerned about haemorrhaging workforces and something that is advocated by compassionate racists in developed countries may not always be the answer. We shall to return to what might work more effectively later. Secondly, while brain drain may not always be a problem, it may of course be a major problem in some sectors in some countries. The pressing empirical challenge then becomes identifying where and when brain drain is actually hampering development outcomes, something I call brain strain. We have a fair idea of where brain strain may be occurring or is likely to occur. Small developing countries with high rates of emigration are likely to be particularly vulnerable. Recent OECD data (Dumont and Lemaître, 2004) suggest that up to three-quarters of all highly-skilled workers in countries such as Guyana, Jamaica, Haiti, Trinidad & Tobago, and Fiji have moved to OECD countries. The sheer volume of emigration from these countries suggests that any possible positive spin-offs from emigration may be outweighed by negative impacts on economic dynamism, the delivery of key public services and the depletion of the political classes. In larger countries, the relative scale of loss may be much smaller but particular sectors may be being adversely affected. In many sub-saharan African countries, even large and relatively rich ones such as South Africa, the departure of key education and health workers may be hampering progress towards development goals. The challenge of identifying brain strain hotspots will require a coordinated effort to pull together a growing but disparate literature and develop a robust methodology. Understanding the complete picture of the impacts of emigration will require combining quantitative (e.g. modelling demand/ 142 WORLD ECONOMICS Vol. 6 No. 2 April June 2005
Migration and Development growth in training for particular sectors; the rate of growth in wages and conditions) and qualitative (e.g. surveying migration and return intentions) efforts. It will also need considerable context-specific evidence such as information on vacancy rates in key sectors, historical and comparative changes in the distribution of certain key workers (e.g. teachers per 1000 children), the size and nature of the sending economy, and the migration experience of those who leave (relative incomes, remittances, return). Understanding the impact of brain strain will only be possible through comparative analysis of progress towards achieving key public policy targets in sectors of concern (e.g. reducing mortality or increasing literacy) over time to see if particular outcomes are being compromised. 2. Beyond remittances In sharp contrast to the pessimism about brain drain stands an emerging optimism about the potential development impacts of remittances sent home by emigrants. Formal flows to developing countries are estimated to be around US$100 billion per annum and rising. Add the informal transfers that are not captured in official estimates and total flows may be double to triple that size. This makes remittance flows to developing countries potentially more important than foreign direct investment and development assistance put together. For some smaller countries, this is already the case: remittances make up more than a quarter of total GDP in Tonga, Lesotho and Lebanon, and bring in more foreign exchange than traditional export products in numerous countries. Naturally, the sheer scale and potential of remittances has attracted considerable interest amongst researchers and policymakers. While this interest is certainly welcome, two important correctives have to be kept in mind. First, because they are relatively easy to quantify and because they involve relatively straightforward policy recommendations (such as calls to reduce transfer costs), remittances seem to have dominated the attention of many researchers, perhaps to the neglect of other aspects of the migration development nexus. Secondly, there is a tendency to exaggerate the role of remittances in providing development finance in poor countries and in mitigating the negative impacts of brain drain. We have to be particularly wary of suggestions that remittances sent from immigrant workers are equivalent to (and should be counted as) aid flows. As post-tax private transfers, remittances should not and cannot be expected to drive development or to replace development assistance. 3. Beyond simple models This nuanced picture of costs (e.g. brain strain) and benefits (e.g. remittances) of emigration from developing countries points to the real methodological challenge in this area: to develop a set of robust analytical tools that can do justice to such a complex phenomenon. A formative attempt to characterize the possible effects of WORLD ECONOMICS Vol. 6 No. 2 April June 2005 143
Dhananjayan Sriskandarajah Possible positive effects of emigration Increased global economic efficiency Good for the individual (in most cases), especially where there are new opportunities for workers not available in the home country May reduce unemployment in some sectors in sending countries Inflow of remittances and foreign exchange benefiting receiving individuals and countries Technology, investments and venture capital from diasporas Leads to increased trade flows between sending and receiving countries Stimulus to investment in domestic education and individual human capital investments ( brain gain domestically) Charitable activities of diasporas can assist in relief and local community development. Possible negative effects of emigration Loss of highly skilled workers and reduced quality of essential services Reduced growth and productivity because of the lower stock of highly skilled workers and its externalities Lower return from public investments in public education Selective migration may cause increasing income disparities in sending country Sending country loses potential tax revenue Risks creating a remittance economy and dependency amongst receivers, a problem exacerbated when remittances diminish over time Inflationary potential of remittances, especially on real estate, in some areas Reduces the size of political classes. emigration (see Box above) reveals a range of factors. Much of the existing literature focuses on one or few of these factors. What is now needed is an attempt to do something more synthetic to look at net impacts. One possible starting point for such an exercise is to look at both the impacts of migration on development and the impacts of development on migration. Here, we know intuitively that migration is often caused by differences in the economic opportunities available in sending and receiving countries (with the exception of those who move to seek political asylum). Indeed, investigating the development migration development nexus offers several advantages, particularly for policymakers. First, if there is such a thing as a migration hump (the belief that emigration rates increase as countries move from low to medium levels of economic development and then fall as they move to relatively high levels), it offers an uncomfortable policy prescription for those concerned about limiting south north migration, 144 WORLD ECONOMICS Vol. 6 No. 2 April June 2005
Migration and Development namely limiting development in the poorest countries so as to reduce emigration potential. Secondly, and more importantly, seeing the relationship in such an integrated fashion allows us to see more clearly why managing migration matters so much. If rapidly developing countries do experience higher rates of emigration, but those migrants who leave remit, invest at home, and eventually return with better skills and more capital, the net developmental impact may actually be positive. On the other hand, the poorest and slowest growing countries may be caught in a migration trap with relatively high rates of highly-skilled migration with few of the benefits of migration. It is the need to do something about this possibility that should be driving the research and policy agenda in this area. 4. Beyond compensation This picture of costs and benefits of migration, even of highly skilled people from poorer to richer countries, suggests that simple policy measures may not work. Seen in this way, the most prominent policy suggestion in this area the idea of developed receiving countries paying compensation to sending countries for migrant workers becomes problematic. Calculating the cost to a developing country of losing its best and brightest is not only difficult but the result may actually be net positive in some cases given the other spin-offs. Moreover, the idea of compensation will hold little sway within the treasuries of rich countries, let alone with already sceptical electorates who think that immigrants are not contributing enough to the domestic economy. 5. Beyond limits to mobility? All this begs the question of what policy measures might be most effective in addressing the adverse impacts of migration on developing countries. Finding effective and workable interventions is one of the most difficult tasks in this field. One proposal conveniently deployed by anti-immigration lobbyists in rich countries is to limit emigration from developing countries. However, policymakers should be suspicious of such approaches and instead find more creative ways to address the issue. Limiting mobility may actually deprive many countries of the potential benefits of migration not to mention curb the rights and opportunities for migrants themselves. Limiting mobility from only the most vulnerable countries is also problematic because it might infringe the human rights of the individuals concerned and, in any case, might not work. Resourceful migrants will always find a way of getting around recruitment bans. We need interventions that acknowledge that mobility is, in itself, not necessarily the problem. Rather, we should pay attention to the impact of that mobility. Improving the development prospects of poor sending countries will require targeted strategies such as limiting active recruitment from the most vulnerable sectors and creating incentives for return. But the most enduring intervention may lie WORLD ECONOMICS Vol. 6 No. 2 April June 2005 145
Dhananjayan Sriskandarajah outside the remit of immigration policies. Financing additional training facilities in vulnerable sectors may help meet local demand. Delivering aid to bolster local wages may promote the retention of key workers. Additional funding for professionals in the developed world to spend time working in poorer countries could also be effective, certainly in the short term. Migration is here to stay. Strategies to limit mobility may end up being ineffective or counter-productive. Instead, we need strategies to optimise the impact of greater mobility. This requires a better understanding of the relationship between poverty, migration and development, perhaps in the ways suggested above. References Bhagwati, Jagdish. 1976. The brain drain, International Social Science Journal 28 (4): 691 729. Dumont, Jean-Christophe and Lemaître, Georges. 2004. Counting Immigrants and Expatriates: A New Perspective, Paris: OECD, Social, Employment and Migration Working papers http://www.oecd.org/ dataoecd/27/5/33868740.pdf Faini, Ricardo. 2003. Is the Brain Drain an Unmitigated Blessing?, Helsinki: WIDERm Discussion Paper No. 2003/64 http://www.unu.edu/hq/library/collection/ PDF_files/WIDER/WIDERdp2003.64.pdf Schiff, Maurice. 2005. Brain Gain: Claims about Its Size and Impact on Welfare and Growth Are Greatly Exaggerated, Bonn: IZA, Discussion Paper 1599. ftp://ftp.iza.org/dps/dp1599.pdf 146 WORLD ECONOMICS Vol. 6 No. 2 April June 2005