ApproachingPolicyfromaDevelopmentPerspective

CoherentMigration:

P H I L I P H O L D S W O R T H 2 6 0 1 2 6 3 1 5

I N T E R N A T I O N A L D E V E L O P M E N T S T U D I E S H O N O U R S T H E S I S

P R O F . M Y R O N F R A N K M A N

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Abstract

In the context of globalization, domestic policies implemented by wealthy migrantdestination countries have a real impact on the development process of poorunderdevelopedstates.Understandingthis,itisessentialrecognizethepossibilitythatpolicies may work at cross­purposes from stated goals of development. This paperapproachesdevelopmentfromtheinnovativeperspectiveofcapitalizingonsynergiesthatexistbetweenmigrationpolicyandthepotentialreturnstothecountriesoforigin,andthebroaderdevelopmentprocess.Mechanismsfortheredistributionoffactorsofproduction and global wealth redistribution, as well as socio­economic transfers ofknowledge and values – both at themicro community andmacro structural level –hold significant potential for alleviating poverty and encouraging productiveinvestment for development. These positive migration outcomes can be encouragedthrough development sensitive policies of diaspora and remittance support and theliberalizationofcircularmigrationpatterns.

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TABLEOFCONTENTS

Introduction 3

Policycoherence 7

Misguidedprotectionism 11

Thecostofincoherentpolicyforsourcecountries 18

InternationalMigration 25

PrimedforCongruence 31

TrendsandDeterminantsofdevelopmentthroughmigration 35

Thedevelopimpactofremittances 43

Micro­levelimpact 43

Diasporasanddevelopment 47

Diasporainvestment 49

Knowledgeandsocialvaluetransfers 51

Macrolevelimpact 55

Themigrationcycle 59

Policyprescriptions 62

Strategiesofco­development 63

Supportingremittancetransfers 66

Liberalization 68

Conclusion 73

WorksCited 75

3

Introduction

As the impact of globalization continues to be realized, international

migration has emerged as one of themost controversial issues.More so than the

movement of goods or capital, the increasing ability of people to relocate across

internationalborders insearchofgreaterreturns for their labourhasentered the

consciousnessofpolicymakers,academicsandcitizensinbothsourceandrecipient

countries.Untilrecently,however,mostresearchhasfocusedontheconsequences

of the phenomenon from the perspective of countries receiving immigrants,

particularly the labour scarce, high income, developed states. Considerably less

attentionhasbeenpaidtotheaffectsuchmigrationhas,bothpositiveandnegative,

on the less‐developed source countries. The reality is that migration is a

fundamental andnecessary part of globalization, yet its potential to contribute to

developmenthasyettobefullyrealized.Thepotentialgainsfrommigrationthrough

thepoliciesofbothdevelopedanddevelopingcountriesarehamstrungbyacritical

lack of understanding surrounding the impact of migrant flows on the social,

political and economic development of the countries of origin. While the

maximization of gains to development, through externalities resulting from

migration policy do not constitute a sufficient strategy for development; the

potential gains necessitate pursuing such opportunities in an effort to increase

globalwelfare.

Thisthesisexaminestherealandprofoundinfluencemigrationpoliciesand

correspondingpatternshaveonmigrants’homecountries,andargues that it is to

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the benefit of developed states to construct and implement policies that augment

the positive and diminish the negative effects ofmigration. Current development

strategyandliteratureintheWestisapproachedfromthepro‐activeperspectiveof

combating the intrinsic sources of poverty: failing health care systems, lack of

primaryeducation,malnutrition,corruptionandsoon1.Whileconstructive,suchan

approach fails to internallyexamineconcurrentmigrationpolicies thatmayact to

thedetrimentofthesuccessofdevelopmentgoals.Whileitisnotexpectedthatthe

objectives of immigration policy be subordinated to those of official development

assistancestrategies,theargumentmadehereisthatgreaterunderstandingofthe

impacts, createsanability to connect theobjectivesofbothandachieveagreater

degreeofpolicycoherence.Putsimply,Westernimmigrationpolicyingeneraland

Canadianimmigrationpolicyinspecificneedtoapproachmigrationpolicythrough

a‘developmentlens’.

Given the tangible impact migration has on development, this thesis

examines how immigration policy can achieve a degree of coherence with

developmentefforts.Itisthereforenecessarytobeginbyexaminingtheconceptof

policycoherence,andtocreateaframeworkwithwhichtoanalyzemeasuresaimed

atminimizingtherisksandmaximizingthebenefitsassociatedwithmigration.The

first section therefore, considers both the motivations and assumptions that

influencetheadoptionofcounterproductivemigrationpoliciesandthenecessityof

coherence for the realization of a more equitable distribution of the gains from

1JeffreySachs,TheEndofPoverty:EconomicPossibilitiesOfOurTime(NewYork:PenguinGroup,2005).

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globalization.CurrenttrendsinCanadianandWesternimmigrationpolicythatare

inconsistent with development, tend to lack an internal coherence with stated

objectives,whichresultsintheoccurrenceofbraindrainandbrainwaste.

The subsequent section begins with a review of the literature on theories

aboutthedriversbehindglobalmigration.Itgoesontoexplainwhy,inthecontext

of globalization, migration policy is primed for having the greatest impact on

development.Coherentmigrationpolicyholdsthepotential forproducingpositive

sum gains for both sending and receiving countries. Taking into consideration an

understanding of the objectives contained in a defined understanding of

development,thethirdsectionexaminestheimpactofmigrationfromamicroand

macro perspective. This includes an examination of the role of remittances, and

socialtransfersofknowledgeandvaluesatthelocal level.Andatthenationaland

globallevel,theimpactofthemagnitudeofsuchtransferswillbeconsideredforthe

overallprocessofdevelopmenttakenasamoreequitablere‐distributionofglobal

wealth. Migration can impact poverty, inequality, and economic growth through

changesinthelaboursupply,productivity,andmigranttransfers,butthemagnitude

oftheimpact,bothintheshortandlongterm,isrelativetothestageatwhichthe

country in question is positioned on the migration cycle. The five stages of the

migrationcycleandtheiraffectonthesendingcountrieswillbeexplained.

The final section proposes policy initiatives aimed at strengthening the

positive impact of migration on development and increasing the strength of

migration anddevelopment policy coherence. The suggestedpolicy prescriptions

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approachmigrationpolicy fromadevelopmentperspectiveofferingsolutions that

cantransformbraindrainintobraingainthroughcircularmigration,greateruseof

low skilled labour, and pro‐active approaches to knowledge transfers through

migrants.Developmentmustbeapproachedwiththeholisticunderstandingthatin

a globalized age all policy areas have a growing impact on the process of

development.Asapolicyareathathaslongbeenoperationalizedfromthenarrow

focusof its impacton the receiving country, theneed to approachmigrationwith

developmentinmindhasneverbeengreater.

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PolicyCoherence

“Coherent policies for development… cannot be mandated by the

developmentcommunity.Butwehavebothaneedandaresponsibilityto

ensure that the development dimension is indeed fully understood and

taken intoaccount, since if it isnot,muchofour spendingwillbemerely

offsetting the costs imposedonourpartnersbyotherpoliciesof ourown

governments.”

RichardManning,Chairman,DevelopmentAssistanceCommittee2

InMay 2004, under the auspices of the Development Assistance Committee

(DAC), the Organization for Economic Cooperation and Development (OECD),

convenedapolicyworkshopentitled“InstitutionalApproachestoPolicyCoherence

for Development”. The necessity of a policy conference based on the concept of

“PolicyCoherenceforDevelopment”(PCD)hascomeoutoftherealizationindicated

above that without it, government departments in the implementation of trade,

agriculture,investment,andmigrationpolicies,mayinfactworkatcrosspurposes

to the objectives of foreign aid and international development initiatives. The

workshop background paper on PCD noted in particular the harmful impact of

migration policies that encourage a brain drain of nurses, teachers, doctors and

other skilled professionals, and expressed the hope that by exposing their

consequences, policy makers in the OECD might re‐consider the development

impact of such programs. “To the extent that OECD‐country migration policies

2OECDDevelopmentCentre,PolicyCoherenceforDevelopment2007:MigrationandDevelopingCountries(Paris:OrganizationforEconomicCooperationandDevelopment,2007).

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deliberately target skilled developing‐country nationals, these policies are

incoherent with foreign aid policies that seek to build capacity in the health and

educationsectorsofthemigrants’homecountries.”3

FukusakuandHirata4definePCDas“theconsistencyofpolicyobjectivesand

instruments applied by OECD countries individually or collectively in the light of

their combined effects on developing countries.” From this they outline four

particular dimensions of coherence:1) internal coherence, 2) intra‐country

coherence, 3) inter‐donor coherence and, 4) donor‐recipient coherence. Of these,

the first two are of particular interest in elaborating an understanding of the

concept of coherence between migration and development policies. Internal

coherence has been the traditional focus of efforts to ensure the effectiveness of

developmentaid. It involvesensuringconsistencybetweentheendsandmeansof

developmentaid,thateconomicassistancedoesinfactleadtotheadvancementof

the intrinsic goods of development such as health care, education and not simply

changesindeleteriouseconomicsituations.Thisperspectiveoncoherencehasalso

often involved general efforts to increase the overall volume of aid. But, as

coherenceapproachesdevelopmentwithaholisticunderstanding,itmustalsotake

intoconsiderationtheconsistencyofpoliciesexternaltothedevelopmentprocess,

namelyintra‐countrypolicycoherence.

3OECD2007118.4K.FukusakuandAHirata,TheOECDandASEAN:changingeconomiclinkagesandthechallengeofpolicycoherenceinOECDandtheASEANeconomies,TheOECDDevelopmentCentre(Paris:OrganizationforEconomicCooperationandDevelopment,1995).

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AJuly2003OECDPolicyBrief5essentiallydefinedintra‐countrycoherenceas

“thesystematicpromotionofmutuallyreinforcingpolicyactionsacrossgovernment

departments and agencies creating synergies towards achieving the agreed

objectives.” The briefing argued that greater coherence in policy stances covering

agriculture,trade, investment,andmigrationwiththatofdevelopmentaidhadthe

potentialtodistributethebenefitsofglobalizationmoreequitably.Achievingsuch

intra‐countrypolicycoherencealthoughseeminglysimplisticintheory,inpracticeit

presents thecomplexchallengesofcollectiveactionbyaggregatingthepreference

functionsofadiverserangeoforganizationswithabsoluteclarity.

Government policy creation is divided into departments or committeeswith

mandates specialized enough to overcome the problems of collective action that

would arise if every decision of government had to find consensus among every

otherdepartment.This,however,presentsaprobleminitself.Coherencewithinthe

specialized policy areas such as development is achieved at the expense of

coherenceacrossdepartments.

Socialeconomictheorytendstodemonstratethatsuchoutcomesarelikelyto

be determined less by the aggregation of preferences but by amajority or power

dynamicsurroundingtheabilitytosettheagenda.6Sincegovernmentdepartments

concernedwithdomesticpolicy tend to trumpthoseconcernedwith thealtruistic

goalsofdevelopmentaid, it isnot surprising thatareas suchas immigrationhave

5OECDObserver,Policycoherence:Vitalforglobaldevelopment,PolicyBrief,OrganizationforEconomicCooperationandDevelopment(Paris,July2003).6K.J.Arrow,SocialChoiceandIndividualValues(NewYork:Wiley,1963).

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implementedpoliciesthatlackcoherencewiththeobjectivesofdevelopment.

The PCD background paper explains that achieving institutional coherence

among policy sectors “requires careful delineation of policy goals, objective

assessmentsofdecision‐makingstructuresandeffectivemanagementofthesundry

programs associatedwith policy implementation.”7 This requires that policies are

designed from an evidence based approach so that unqualified opinions, which

currentlydrivemigrationpolicies,arereplacedbyknowledgeandunderstandingof

therealimpactsofsuchpolicies.

7OECD20076.

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MisguidedProtectionism

There isadearthofempiricalresearchonthe impactofmigrationonsource

countries. This reality makes the formation of policy on the issue particularly

hazardous. Public policy is frequently driven by misguided opinions and special

intereststhatresultinpoliciesandthosesurroundingmigrationarenoexception.In

the rich receiving countries of Europe and North America there is an increasing

perceptionthatimmigrationofpeoplefromdevelopingcountriesisaproblemthat

needs tobe controlled.8Thisgrowingalarmistperspective,which is fueledby the

mediaandconcernsaboutsecurityandeconomicissues,needstobeplacedinthe

contextofrecentempiricalresearchregardingtherealimpactofmigrationonstate

interests. Modern mass media covering illegal immigrants desperately trying to

enter Europe or cross the US ‐ Mexico border,9 and articles in Canadian

newspapers10 covering the culpable flood of immigrants suffocating the economy

and evading deportation contribute to “an exaggerated public perception in

Western countries that a tidal wave of immigration is about to crash on ‘their’

shores.11.Therealityisthatpublicconcernregardingimmigrationis,inpart,fueled

by the fact that migrants tend to come from poor countries. Conscious of this,

politicians and policy practitioners have tended to listen to the critics of mass

8SCastles,"InternationalMigrationattheBeginningoftheTwentyFirstCentury:GlobalTrendsandIssues,"InternationalSocialScienceJournal165(2000):269‐281.278.9Aprimeexampleofthisistheimagesofdesperatemigrants,largelyfromsub‐SaharanAfricancountriestryingtocrossintotheSpanishexclavesatCeutaandMelillaseekingtoentertheEUfromMorocco.InNorthAmericarequestforfinancingin2006ofa1125klmfenceacrosstheUS‐Mexicanborderandtheconstitutionofthe‘MinuteMen’isanotherexample.10ImmigrationWatchCanada,NewsArticlesCanadian,28102008<http://www.immigrationwatchcanada.org/>.11HeindeHaas,"Turningthetide?Why'developmentinsteadofmigration'policiesareboundtofail,"WorkingPaper,InternationalMigrationInstitute,2006.

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immigration resulting inmigrationmanagement policies that aremore restrictive

andwhichalsolackcoherencewithdevelopmentgoals.

Itisnotunreasonabletotakeintoconsiderationthedomesticimpactofmass

migration and efforts tomanage it for the benefit of the country. There are three

traditionally dominant discourses that have permeated the voices of critics of

immigrationandinfluencedtheoutcomeofpolicy:1)aneedtorestrictthelevelsof

low skilled immigration and encourage the emmigration of a high skill economic

classofmigrants,2)tolowertheoveralllevelsofimmigrationflowsand3)tocurb

migrationthroughtheuseofdevelopmentaidandincentives.

Theoverarchingquestioniswhethertheentranceofthesedeveloping‐country

nationals into the economy constitutes a burden or a benefit to the receiving

country.AcademicvoicesformorerestrictivemigrationpolicieslikethoseofJames

Bissett and Stephen Gallagher12 argue that Canada’s proportionally high

immigration levels pose several challenges. To begin with immigrants, especially

low skilled immigrants, are considered a threat to the economy. They argue that

thesenewcomers consumemore government resources than they contribute, and

represent a threat to thewages and job security of low skilled nativeworkers.13

Additionally,thechallengeofirregularandexcessivemassmigrationisconsidered

12AlexanderMoensandMartinCollacott,,ImmigrationPolicyandtheTerroristThreatinCanadaandtheUnitedStates(Vancouver:FraserInstitute,2008).13HerbertGrubel,"ImmigrationandtheWelfareStateinCanada:GrowingConflicts,ConstructiveSolutions,"PublicPolicySources84(2005).(Thecalculationthatimmigrantsconsumemoreismisleading.Itisbasedonaquantitativestudythatcontraststherelativelowerearningsofmigrantsagainsttheconsumptionofwelfaregoodsbytheaveragepersoninthesameincomebracket,ratherthanaqualitativestudyofimmigrantpatternsofconsumption.)

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toposeasignificantnationalsecurityandpotentialterroristthreat.14

Counter to this, there are a significant number of advocates for the positive

economic impact of immigration, including the Royal Bank of Canada and the

Economic Council of Canada, which believe that immigration if anything has a

positive impact on the economy15 and is necessary for continued economic

growth.16TheECCconcludedthatthesignificantgainsthatsuchmigrationbrought

to the migrants themselves was a considerable motivating factor for a strong

immigrationpolicy.Numerousstudieshavealsoshownthatimmigrants,onaverage,

consume less in government services than they contribute in taxes, leading to a

positive fiscal contribution to Government Revenue,17— a result of the fact that

newcomers are less likely than native Canadians to receive social assistance,

employment insurance or subsidized housing.18 These findings are supported by

similar studies concerning the impact of low skill immigrants in Europe. The

consensus of researchers points to the fact that the negative impact onwages is

small ifexistentatall.19Münzetal.,demonstrate that immigrantscompliment the

nativelabourforce,astheytendtofilllabour‐marketgapsavoidedbythedomestic

14MoensandCollacott.15EconomicCouncilofCanada,EconomicandSocialImpactsofImmigration,EconomicCouncilofCanada(Ottawa,1991).16NicholasKeung,"Boostimmigration,bank'sreportsays;Callsfor400,000peopleayeartomaintaingrowthCriticswarnmoreresourcesneededtohandlenumbers,"TorontoStar(Toronto,2005)A.23.17A1990averageimmigranthouseholdpaid$22,528inallformsoftaxesandconsumed$10,558ingovernmentservices,contributing$2.6billionnationally.AtherH.Akbari,"TheImpactofImmigrantsonCanada'sTreasury,circa1990,"DiminishingReturns,ed.DonJ.DeVoretz,PolicyStudy24,(C.D.HoweInstitute,LaurierInstitution,1995).18MichaelBakerandBenjaminDwayne,"TheReceiptofTransferPaymentsbyImmigrantstoCanada,"TheJournalofHumanResources(1995).19SLonghi,PNijkampandJPoot,AMeta‐AnalyticAssessmentoftheEffectofImmigrationonWages,DiscussionPaper,TinbergenInstitute(Amsterdam,2004).

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population(lowpaidservicesjobs,seasonallabouretc),increasingtheefficiencyof

labourallocationwithinthemarket.20Althoughimmigrationmayaffecttheoverall

supply of labour, the position that immigrants tend to occupy within the labour

market combine for a relatively weak impact on the wages of low skilled native

workers.

Migrant workers may relieve labour shortages in areas workers in the

domestic economy are unwilling to work, and which cannot be replaced by

substitutes for human labour (services). In such situations, migration can in fact

increase productivity. Migrant workers can potentially soften rigidities in the

market, as they tend to bemore flexible to changes in labourmarket conditions

relative tonativeworkers.Finally, the increasedcompetitiondomestic lowskilled

workers face from migrant workers is the same as the challenge posed by the

importoflabourintensivegoodsfromdevelopingcountriesinthecontextoftrade

liberalization.

Thephenomenaofdecliningimmigrantincomesoverrecentdecadesisseenas

a potential burden on the Canadian Economy and is used as an argument for

increasingmigrationcontrols,andfocusingeffortsonencouragingtheemigrationof

highly educated immigrants.21 This position, however, ignores the fact that this

deterioration in welfare has occurred despite increasing education levels of

successive cohortsof immigrants. Immigrant incomesaremeasuredas a factorof

20RMünz,etal.,TheCostsandBenefitsofEuropeanMigration,PolicyReportNo.3,HWWI(Hamburg,2006).21G.JBorjas,"MakingItWorse:PresidentBushHasTackledtheImmigrationProblemWrongly,"NationalReview56.2(2004):24‐26.

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their earnings relative to similarly situated (read educated) native born

counterparts,22 reflecting a failureof themarket to recognize thequalificationsof

immigrantsandtoremuneratethemappropriately.Inaddition,AlanGreenexplains

thataninfluxofskilledworkershastheeffectof“loweringtheskillpremia;thatis,

reducingthegapbetweenthewagesofskilledandunskilledworkers.Thelowering

of this gap has important consequences for the decision‐making process of

Canadians interested in extending their education”23 and upsets the balance of

immigration and education in meeting the needs of the Canadian economy.24

Proponents of more restrictive immigration policy advocate under assumptions

abouttheimpactofmigrationonstateinterests.Theoutcomeissupportforpolicies

inconsistentwiththecontextualevidenceregardingthebenefitsofmigration.

Conscious of the difficulties of enforcing restrictive migration policies and

theirpast failures,25proponentsofsuchpracticeshavesuggested ‘smart’solutions

tothechallengeofmigrationbyaddressingtheperceivedrootcausesofmigration,

or push factors, from source countries through development initiatives.26 The

concept that a strategy of development aid can reduce pressures of migration is

based on the false assumption that there is a causal link between poverty and

22JeffreyReitz,"ImmigrantSuccessintheKnowledgeEconomy:InstitutionalChangeandtheImmigrantExperienceinCanada,1970‐1995,"JournalofSocialIssues57.3(2001):579‐613.23AlanG.Green,"WhatistheroleofimmigrationinCanada'sfuture?,"CanadianImmigrationPolicyforthe21stCentury,ed.CharlesM.Beach,AlanGGreenandJeffreyG.Reitz(Kingston:JohnDeutschInstitutefortheStudyofEconomicPolicy,2003)38.24JeffreyG.Reitz,"ClosingtheGapsBetweenSkilledImmigrationandCanadianLabourMarkets:EmergingPolicyIssuesandPriorities,"Unpublished,UniversityofToronto,2007.25SCastles,"WhyMigrationPoliciesFail,"EthnicandRacialStudies27.2(2004):205‐227.26BagwhatinotesanexampleofthisinBritishPrimeMinisterTonyBlairandSpanishPrimeMinisterJoseMariaAznar’s2002proposaltonolongergiveaidtomigrantsendingcountriesthatwouldnotcooperateincontainingundocumentedimmigration.‐JagdishBagwhati,"BordersBeyondControl,"ForeignAffairsJan‐Feb.(2003):98‐104.

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migration.Even if aidwere toencourageeconomicgrowth, the linksofwhichare

weakatbest,itassumesthatsuchgrowthwouldresultinareductioninmigration

flows. As demonstrated below, economic growth can, in fact, have an inverse

correlation with rates of migration as basic economic development leads to

migrationpressurebyraisingincomesandmakingtheresourcestocovertheinitial

costs ofmigrationmore accessible. Amigration ‘hump’ arises out of an increased

inclination in situationswhere income is sufficient to facilitatemigration and low

enoughtoremainafinancialincentive.27

‐GoldinandReinert

27deHaas,2006.

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A report for Citizenship and Immigration Canada noted that the “extent towhich

ODA can be used to manage migration,… remains unclear. It is important to

recognizethatODAlevelsarefairlysmall,andbyitselfODAcannotbeexpectedto

dramaticallyaltertheconditionsthatleadtomigration.”28EffortstoimposeODAas

an incentive for greater co‐operation in controlling irregular migration, fails to

considertheinitiallackofresourcesthatmakesuchbordercontroldifficulttobegin

with.Theeffectsof such conditionalityonmigrationareyet tobeexaminedas to

theireffectivenessinpromotingbettermigrationmanagement.29

What policymakers are leftwith after being presentedwith the incomplete

contextual evidence of the preceding arguments regarding the management and

domestic impact of migration, is support for the tri‐partite approach of stricter

migration controls, selective prioritization of highly skilled immigrants, and

protection through development incentives. Their implementation in current

migration policy not only reflects a failure to employ a balanced evidence‐based

approachtopolicyproduction,butafailuretocreatecoherencebetweenmigration

anddevelopmentobjectives.

28DaneRowlandsandAnnWeston,"Governance,Gender,DevelopmentAssistanceandMigration,"Report1998.29Ibid.

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Thecostofincoherentpolicyforsourcecountries

One of the critical aspects of international migration in an increasingly

globalized world is the reality that observed migration patterns respond, (if

imperfectly) to the policies implemented in the developed world. This becomes

apparent when the difference in the composition of the skills of migrants across

countriesiscomparedagainstthepoliciesforattractingskilledimmigrants.30

Setting aside the humanitarian principals of kinship and asylumwhich have

developedtosomedegreeininternationalnormsandlawssurroundingmigration,

immigrationpolicyhasgenerallybeenenacted,particularlybyrichercountries, in

anefforttoservethenationaleconomicself‐interest.Startingin1965,inaneffortto

buildthestockofhumancapitalandtransformtheresource‐basedeconomytoan

urban/industrialone,Canada implementedthearchetypalpointssystem,whereby

economically attractive immigrants are selected based on desirable mixes of

education, experience, adaptability and investment capital.31 Many high‐income

receivingcountrieshavefollowedsuiteintheimplementationofsimilarpolicies.

The results of such systems are reflected in the elevated selection rates of

immigrantswithhighskilllevelsenteringOECDcountriesrelativetotheproportion

of global migrants these countries receive. According to a 2002 United Nations

Report,3260percentofworldwidemigrationin2000flowedtodevelopedcountries.

30OECD200731Immigrantsareaccepteduponachievingacertainminimumpointsspread,whichiseasilyaccomplishedbyhighlyeducatedimmigrantswhoautomaticallyachievethemaximumpointsforeducation.32UnitedNations2002.“InternationalMigrationReport2002.”NewYork:UnitedNations.

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Subsequent estimations by theWorld Bank, however, demonstrate that high‐skill

migration is even more concentrated with about 90 percent of all highly skilled

immigrantsendingupinOECDmembercountries.33Thefollowingcharttakenfrom

OECDdatafurtherdemonstratesthesignificantnumbersofhighlyskilledmigrants

emigrating to OECD countries proportional to lower skilled migrants of similar

origin.34

SimilarresultsarereflectedintheskilllevelselectionratesofCanada’sImmigration

system.In2000,theproportionof immigrantswithatertiaryeducationinCanada

33FrédéricDocquierandAbdeslamMarfouk,"InternationalMigratiobyEducationAttainment,1990‐2000,"InternationalMigration,RemittancesandtheBrainDrain,ed.ÇaglarÖzdenandMauriceSchiff(Washington:WorldBank/PalgraveMacmillan,2006)154.34OECD2007.35.

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was58.8percent35—thehighestofalltheOECDcountriesandafull16.3percent

aheadofthenextleadingimporterofhumancapital,theUnitedStates.

Theskill levelsof immigrants,whileclearlyaconcernand interest forpolicy

developmentinthereceivingcountriesoftheNorth,hasadetrimentalimpactonthe

development capabilities of the lower income countries of the South. The

phenomenon of ‘brain drain’,— the emigration of the highly skilledmigrants—

presents a complex challenge for both source and host countries. Three specific

losses to those leftbehindareparticularlysalient.Tobeginwith, thedepartureof

“skilled and innovative peoplemeans the loss of their ideas for productivity and

governance and the benefits they would otherwise provide to their co‐workers,

students and fellow citizens.”36 Second, the governments of many developing

countries incur significant proportions of the cost of higher education. The

emigration of highly skilled immigrants then becomes an export of the human

capital inwhich thegovernment investedusing fiscal revenues,and the lossofan

abilitytorecoupsuchinvestmentsthroughtaxationofwhatwouldhavebeenhigh‐

incomecitizens.Third,thelossofcriticalprofessionsinthedeliveryofkeyservices

canhaveanintrinsicimpactontheprocessofdevelopment.Thelossofhealthcare

and education professionals in particular corrodes the ability to both fight

challengessuchastheHIV/AIDSepidemic,andtheabilitytofurtherbuildcapacity

in these key areas. A prime example of this is the emigration of 69.4 percent of

35DocquierandMarfouk,184.36OECD2007,71.

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medicalofficerstrainedinGhanabetween1995and2002.37

The2004AnnualReportofTrendsinInternationalMigrationproducedbythe

OECD38suggeststhatsmallcountries,inparticular,maybeadverselyaffectedbythe

emigrationofhighlyskillednationalsasthelossoftheseskillspreventsthecountry

from reaching a ‘critical mass’ of human capital necessary to foster long‐term

economicgrowth.Policies implementedbyCitizenshipandImmigrationCanada in

2002‐replacingoccupationallistswithasystememphasizingbothexperienceand

advancedacademic traininghasbeennotedby some toexacerbate thekey sector

skillshortagesexperiencedbydevelopingcountries.39Incombinationwithalackof

data surrounding the field of expertise of migrants with tertiary education, this

policyisincapableoffosteringacoherentpolicysensitivetotheneedsofdeveloping

sourcecountries.

Theimpactof ‘braindrain’mustalsobeconsideredwithinthecontextofthe

relativeeconomicpositionofthesendingcountry.Itisimportanttobeawareofthe

differenteffectsofhighskillemigrationincountriesofdifferingincomelevels.The

reality that the migration hump makes mobility easier as wages increase, is

reflected in migration trends, low skilled workers come disproportionately from

middle‐incomecountries,while low‐incomecountriesaresubject tomajorexodus

of their high skilled workers.40 Some of the poorest African countries exhibit

37Ibid.,72.38OECD,TrendsinInternationalMigration‐AnnualReport2004Edition,AnnualReport(Paris:OrganizationforEconomicCooperationandDevelopment,2005).39SouthernAfricanMigrationProject,"TheBrainDrainofHealthProfessionalsfromsub‐SaharanAfricatoCanada,"MigrationandDevelopmentinAfrica,Vol.2(Idasa,2006).40OECD2007.

22

extraordinaryratesofskilledemigration.Africainparticularisoneofworstaffected

by such emigrationwith 5 countries exceeding emigration rates of 50 percent of

theirtotalstocksofskilledlabour.41Aswillbeelaboratedbelow,themobilityofthe

lowskilledhasbeenshowntocontributemoretoareductionofpoverty,creatinga

two fold impactof a lossof skill and the lossofpotentialhigher returns from the

migrationoflowerskilledworkers.“[T]hepoorestcountriesareunderrepresented

among the ‘winners’ from migration, while they are overrepresented among the

‘losers’.”42

The detrimental impact of brain drain caused by current policy is further

compounded by the reality of skill waste or brain waste of the human capital

immigrantsbringwiththem.Foreignworkersaredrawntohigh‐incomecountries

bypoliciesthatprioritizehighskillandeducationalattainmentbutareoftenhired

onarrival inoccupations that theyareoverqualified for.43Thisnotonlyresults in

lower incomes of educated immigrants but also represents significant losses of

potential on a number of fronts. The movement of educated persons into

occupationsthatdonotrequiretheinvestedhumancapitalskillscreatesaprocess

of‘de‐skilling’.Furthermoretheseskillscannolongerbeenhancedbyexperiencein

the host country and potentially transferred back to the source country. “As

migrantsendupatthelowerendofthelabourmarketatdestination,theylearnfew

41FrédéricDocquierandAbdeslamMarfouk,187.(ThesecountriesincludeCapeVerde67.5%,TheGambia63.3%,Seychelles55.9%Mauritius56.2%,sierraLeone52.5%.Ghana,Mozambique,KenyaUganda,AngolaandSomaliaarealsosignificantlyimpacted.)42OECD2007,18.43ÇaglarÖzdenandMauriceSchiff,"Overview,"InternationalMigration,Remittances,andtheBrainDrain,ed.ÇaglarÖzdenandMauriceSchiff(Washington:WorldBank/PalgraveMacmillan,2006)6.

23

newskills that canbe capitalizeduponafter return.”44Over time, their skillsmay

eventually be lost. Studies have also demonstrated a connection between the

occupationalutilityoftertiaryeducationpossessedbyimmigrantsandwhetherthey

areavisibleminority.Li,forexample,notesthattheracialcharacteristicsofdegree

holders cannot be separated from the credentials themselves as they produce

“complicated interaction effects”.45 This reality makes it particularly difficult for

educated emigrants from some of the poorest countries in the world to capitalize on their

skills, while also resulting in the greatest value loss for their home country. Finally,

current policy is incapable of assessing the value of immigrants’ skills within their home

country. Specialized productive knowledge, for example that possessed by a farmer in

sub-Saharan Africa regarding agricultural practices, is a loss of skills to the home country

when the individual emigrates to a country where such skills have little or no value.

The consequences of current policies that result in the departure of valuable human

capital from developing countries are not entirely detrimental. Evidence of positive

returns in the form brain gainandknowledgetransfersdo exist.Itisthedualimpactof

suchpolicies in combinationwith restrictive immigration,however, that createsa

significant barrier to capitalizing on such gains. Increasingly restrictivemigration

policies have the paradoxical effect of encouraging permanent settlement.46In

addition, developing countries have a tendency to promote the permanent

settlementof immigrantswithhigherskillswhilemakingitdifficult forthosewith44TonvanNaerssen,ErnstSpaanandAnneliesZoomers,"Globalization,Migration,andDevelopment,"GlobalMigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008)6.45PeterS.Li,"TheMarketWorthofImmigrants'EducationalCredentials,"CanadianPublicPolicy27.1(2001):33.46deHaas,2006.

24

lowerskills toachieve thesamestatus.Whilebeneficial to the individualmigrant,

sucha strategy increases thechallengesof transferringsuchskillsandknowledge

backtothehomecountry.

In lightof theaffectsof current immigrationpoliciesonsomeof thepoorest

countries, one could argue that aid policies compensate those countries that reap

thesmallestgains from internationalmigrationas theyreceiveadisproportionate

shareof internationalaid.Theobjectiveforwardedhere,however, istorealizethe

potential synergies between aid and migration policy emanating from receiving

countries.Itisalsoproblematictoattempttoutilizedevelopmentassistanceforthe

dual purpose of poverty reduction and migration control. Given that the largest

portionofmigrantscomefromlowermiddleincomecountries,redirectingaidinan

effort to stem migration would run counter to the objective of development

assistance to eradicate the most severe poverty. 47 Aid cannot be considered a

substituteforafailuretorealizethebenefitsofmigrationbutmustbeseenasatool

todiffusesuchbenefitsintheprocessofdevelopment.

47OECD2007,142.

25

InternationalMigration

In developing coherent migration strategies that benefit both sending and

receiving countries, it is important to beginwith both a factual and a theoretical

basis fromwhich to examine thepotential benefits fromeffectivemanagement of

global migration flow. The networks that link people around the globe are

increasingbothinvolumeandform.Instepwiththepersonal,economic,digital,and

socialconnectionsbetweenpeople,migrationsystemsthatconnectplacesthrough

flows of people are also becoming increasingly complex.48 For 2005 the United

Nationsestimatedthattherewhere191millionmigrants(definedaspersonsliving

outsidetheircountryofbirth),anincreaseof26millionfromonlyadecadeprevious

andover110millionsince1965.

Althoughtheseabsolutenumbershavecertainlyincreased,therelativestocks

ofworldmigrantshaveonlymarginally increasedoverthesametimeperiodfrom

2.3percentto3percentoftheworld’spopulation.49Theserelativelylowincreases

in globalmigration stocks at first seem inconsistentwith the commonperception

thatglobalmigrationpressures,especiallyinWesterndevelopednations–asnoted

earlier‐areincreasing.Therealityisthatalthoughglobalmigrationstockshavenot

changedconsiderably,shiftsintheregionalflowsofthesestockshave.Theabsolute

numbersinlessdevelopedcountrieshavefallenasmigrantstocksinthedeveloped

world continue to increase.While the ratioof globalmigrants remained the same

48RonaldSkeldon,MigrationandDevelopment:AGlobalPerspective(Harlow:Longman,1997).49ThesignificantjumpinthesenumberswascausedbythepoliticalbreakupoftheSovietUnionresultinginpeoplebeingclassifiedaslivingoutsidethecountryoftheirbirthwithoutactuallymigrating.–DocquierandMarfouk,159.

26

between1965and1990,thecombinedincreaseinNorthAmerica,WesternEurope

and Australasia, relative to their domestic populations, rose from 4.9 to 7.6

percent.50 This sizeable shift in the global stock of migration has caused a

fundamentalshiftinthedestiningregionsofglobalflowsofmigrants,withover60

percentofinternationalmigrantsnowresidinginthedevelopedworld.51

Clearlythisshiftreflectsagrowingrealizationbyinternationalmigrantsofthe

important implicationsthatSouth‐Northmigrationhas for theirowndevelopment

andpovertyreduction(andanincreasingabilitytomigrategreaterdistances)–not

least because of the link it establishes between the rich and the poor world.

Accompanying rises in the levels of global inequality unsurprisingly serve as the

backdropoftheseshiftsandtheincentiveforriskingthegainsfrommigrationtothe

developedworld.Yet,theriseinthesemigrantstocksbothgloballyandregionallyis

stillsmallerthantheriseoftrade/GDPratios.52Thusthequestionthatremainsis:

Why have the global stocks of migrants, especially those flowing from South to

North not increased more significantly? What are the fundamentals the drive

currentworldmigrationflows?

Themodernizationtheoryofdevelopmentandunderdevelopmentapproaches

migrationfromtheneoclassicalperspectiveortheEquilibriumModelofMigration,

which posits that migration flows are assumed to be the result of voluntary

50TimothyJ.HattonandJeffreyG.Williamson,WhatFundamentalsDriveWorldMigration?,WorkingPaper9159,NationalBureauofEconomicResearch(Cambridge,2002).51UKHouseofCommonsInternationalDevelopmentCommittee,"MigrationandDevelopment:Howtomakemigrationworkforpovertyreduction,"SixthReportofSession2003‐2004,2004.15.52RFindlayandK.H.O'Rourke,"CommodityMarketIntegration1500‐2000,"GlobalizationinHistoricalPerspective,ed.MBardo,A.M.TaylorandJ.G.Williamson(Chicago:ChicagoUniversityPress,2002).

27

decisions by rational individuals responding to expected income differentials and

employment opportunities in the globalized world. The premise is that the

cumulativemobilityofworkersisaresultofimbalancesinthespatialdistributionof

the factors of production (land, labour, capital). Thedisproportioned allocationof

thesefactorsofproductiondeterminestheunequalreturnstoeachfactor.“[I]ncome

maximizingindividualsareexpectedtorespondtogeographicaldifferencesinthe

supplyanddemandoflabourbymigratingfromlow‐wage,laboursurplusregionsto

highwage,labourscarceregions.”53Thisprocessisbasedontheconjecturesofthe

Heckscher‐Ohlin theory of factor price equalization, that in a perfect neoclassical

worldsuchmovementofthelabourfactorofproductionwillleadtoaconvergence

ofwagesinbothsendingandreceivingcountries.

Counteringthiseconomicmigrationmodel,thehistoricalstructuralapproach,

framed within dependency theory, examines the migration phenomena in the

broader context of macro‐social economic pressures rather than individual

calculations.Itisthestructuralforcesinthetraditionaleconomicdistributionofthe

factorsofproductionthatpropelaggregate flowsofpeople.Theunitofanalysis is

theflowratherthanthesumofindividualchoices;54themostcommonapproachto

understanding these structural pressures is an analysis of the emergence and

expansionofthecapitalistmodeofproduction.

Boththeoreticalperspectiveshavetheirweaknessesinthefaceofthecomplex53HeindeHaas,"TheComplexRoleofMigrationinShiftingRuralLivelihoods:AMoroccanCaseStudy,"GlobalMigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008).22.54CharlesH.Wood,"EquilibriumandHistorical‐StructuralPerspectivesonMigration,"InternationalMigrationReview16.2(1982):298‐319.

28

realities of migration and development interactions. While the neoclassical

approach is considerably narrow in its assumptions about the rational economic

calculations of individuals reacting to wage differences, the structuralist

perspective,isequallyrigid,believingthat“patternsofmigrationare…explainedin

termsofchangesintheorganizationofproductionthatunequallyaffectthefortune

of different social classes”.55 Individuals are perceived as passive victims that

respond tomacro‐forces due to their social economic class. However there is no

necessary correlation between the fate of particular social categories and the

propensityofindividualstomigrate.

While these differing units of analysis seem to be at odds, a degree of

coherence can be reconciled. The historical structuralist perspective takes for

grantedthattheactionsofsocialclassesrespondingtoeconomicstructuresthrough

migration are rational. If this economic structure is equated with the global

disparitiesinincomethatrationalindividualsrespondtointheneo‐classicalmodel,

a degree of convergence between the conceptual influences appears. Further, the

social position of individuals can be extrapolated to the global perspective of

migrants situated in the developing versus the developed world. While this

consistencyhelpstoexplaintheincreasingshiftinflowsofmigrantsfromSouthto

Northitfailstotakeintoconsiderationthecomplexinteractionofthemultipleother

forces that influence thedecision tomigrate. Rational decisionmakers, aswell as

reactingtoincomeincentives,alsotakeintoconsiderationanumberofotherpush

andpullfactorswhichdrawattentiontothepotentialgainsfrommigrationcovered55Ibid.,307.

29

below.

People who move have multiple motives. These motives can be broadly

conceptualized into push and pull factors. The places fromwhichmigrantsmove

often havemultiple problems.Migrantsmay bemotivated to leave for “economic

anddemographicreasons(poverty,unemployment, lowwages,high fertilityrates,

lackofbasichealthandeducation).”56PoliticalandSocialforcessuchasconflictor

violence causing insecurity and human rights abuses aswell as poor governance,

corruption,ethnic religiousorgenderdiscriminationcanalsoplaycritical roles in

the decision making process. These decisions can be further compounded by

environmentalfactorssuchasresourcedeficiencies,foodshortagesetc.Pullfactors

of migration are tempered by the reliability of information concerning the

opportunitiesandrisksinvolvedinthedecisiontomigrate.Increasinglyglobalized

media, and growing diaspora networks provide sound information about the

available costs andbenefits. Better standards of living, employment opportunities

andhigherwagesareweighedagainstimposedcostsofstrictmigrationpolicies,the

actualcostofmigration,andthechancesofsuccess.

A third theoretical approach to migration, the New Economics of Labour

Migration (NELM), takes these factors into consideration and focuses on the

household,ratherthantheindividualortheeconomicstructureastheappropriate

unit of analysis in determining the influential factors in thedecision tomigrate.57

56UKHouseofCommonsInternationalDevelopmentCommittee,18.570Stark,Themigrationoflabor(Cambridge&Oxford:Blackwell,1991).–J.E.Taylor,"TheNewEconomicsofLabourMigrationandtheRoleofRemittancesintheMigrationProcess,"InternationalMigration37.1(1999):63‐88.

30

NELMtheorizesthatmigrationformspartofalivelihoodstrategythattakesplaceat

the household level. “NELM perceives migration as a risk‐sharing behaviour of

households or other social groups, which are better able than individuals to

diversify resources in order to minimize risks.”58 Taking into consideration the

pushandpull factors, thedecisiontoemigrate isbasedonthepotential increased

capitalwhichnotonlyprovides insuranceagainst shocksandstressescommon in

developing economies, but provides a potential source of investment capital.59

NELM sees migration as a legitimate development strategy that incorporates the

structural and micro utility maximizing calculations of migration into an overall

attempttoimprovethewelfareofthesocialgrouptakingontherisk.Examiningthe

motivationsformigrationfromthisperspectivespeakstothepotentialofmigration

asaneffectivetoolintheprocessofdevelopment.

58deHaas,2008.2359A.deHaan,etal.,MigrationandLivelihoods:CasestudiesinBangladesh,EthiopiaandMali(Brighton:InstituteofDevelopmentStudies,2000).

31

PrimedforCongruence

Thepotential benefits resulting from the interaction ofmigrationpolicy and

developmenthave receiveda stormof academicandpolicy research interestonly

withinthelastfewyears.Acombinationofinequality,economicliberalization,and

changingdemographics,influencedbyforcesofglobalizationhaveprimedmigration

for impacting the growth and development of underdeveloped sending countries

likenoothertimebefore.

Whiletheglobalmigrantstocksrepresentaseeminglysmallthreepercentof

theworld’stotalpopulation,theimpactofsucharelativelysmallproportionisfar

greaterthanthepercentagesuggests.60Migrationisanintegralpartofaglobalized

world. Notwithstanding this fact, rich destination countries continue to maintain

highly protectionist immigration policies.While legal distinctions have fostered a

culture of acceptance towards receiving humanitarian asylum seekers, migrants

responding to adverse economic conditions are prevented from the rational

behaviour of seekinghigher returns for their human capital. This has occurred in

contrasttothecontinuedstimulationandliberalizationofalmostallotherpolicies

affected by globalization including the freemovement of capital and goods. Such

protectionistpoliciesexplain,inpart,theabsenceoflargeimmigrationflowswhen

comparedtothefirsthalfofthenineteenthcentury.61

While it is truemigrationtrendsare influencedbythecostsand information

conveyedthrough immigrationpolicy,suchpoliciesmustoptimizetheirobjectives60TonvanNaerssen,ErnstSpaanandAnneliesZoomers,1.61ÖzdenandSchiff,3.

32

inthefaceofchangingeconomicanddemographicvariables.Severalfactorsareset

to influence migration pressure in the coming decades with the result being an

increase in the number of potential international immigrants.62 To begin with,

sustained growth andpoverty eradicationwill continue to ease the constraints of

povertyonthepoorestpartsoftheworldaswellaslesseducatedpotentialmigrants

with fewer of the resources traditionally needed tomigrate. Second, the costs of

migrationintermsofinformationasymmetriesaredecliningasdiasporanetworks

reachacriticalmass intheirabilitytoprovideinformationaswellasresourcesto

potentialmigrants. “Migrationnetwork theorypredicts that the costs and risksof

migrationfallovertimeduetothefacilitatingroleestablishedmigrantcommunities

play in themigrationofothercommunitymembers.”63 Increased interdependence

asa resultofdeep liberalizationof tradehasalso spurred increased international

migration.

Continued income disparities between the developed and developing world

serve as a source of increasingmigratory pressure and an opportunity to realize

gains from such migration. Massive inequality between rich and poor countries

continuestoexist.Realincomeratiosbetweentherichestandpoorestcountriesin

theworldhaveballoonedfrom10:1to60:1 inthepast100years.64 Inadditionto

increasing thecostcalculationsof internationalmigrationdue towagedifferences

— corresponding with migration theory, — existing inequality increases the

62HattonandWilliamson.63deHaas,2008.28.64NinaNybergSørensen,NicholasVanHearandPoulEngberg‐Pedersen,"TheMigrationDevelopmentNexus:EvidenceandPolicyOptions,"TheMigrationDevelopmentNexus,ed.NicholasVanHearandNinaNybergSørensen(Geneva:InternationalOrganizationforMigration,2003).

33

developmentreturnofmigration.Largewagegaps,especiallyinunskilledandsemi‐

skilled labour, indicate the potential welfare gains from migration liberalization.

Mechanismsofwealthtransfer—remittancesinvestments,etc.—overtimeleadto

amorebalanceddistributionofbothlabourandcapital.Thedevelopmentimpacts

offinancialtransfersarestrongestinthecontextofinequality.Thegreatermarginal

utility of capital in the developing world results in its more efficient use in the

processofeconomicgrowth.

Finally, current demographic trends both in developed and developing

countries,havebeencitedasapotentialsourceofsignificantpressureandsourceof

economicgains frommigration.65The labour forces inmanydeveloping countries

are rising considerably.Not only do the increasing population pressures drive up

unemploymentanddrivedownreturnstolabour,butthedemographicdependency

rates are quickly changing as the proportion of young adults of working age in

sending countries increases in synchrony with a decline in the same ratios in

receivingcountries. StatisticsCanadapredicts thatgrowthwithin the labour force

willbefueledsolelybyimmigrationasearlyas2020.66Globally,thelabourforcesof

thedevelopedworldarepredictedtoleveloutaroundtheyear2010,andbeginto

decline by up to 5 percent in the subsequent two decades. Accompanied by an

increasingdependencyasBabyBoomersretire,suchdemographicchangesshould

giverisetoastrongdemandfor labour.Countrieswithservicesectorscomprising

65ÖzdenandSchiff66StatisticsCanada,TheDaily,Thursday,December15,2005.Populationprojects,15December2005,05112008<http://www.statcan.gc.ca/daily‐quotidien/051215/dq051215b‐eng.htm>.‐currentlyasof2001migrantsaccountfor70%ofallgrowthinthelabourforce.

34

upwards of 60 percent of their GDP will be acutely affected. Foreign workers

alreadyaccountforconsiderableportionsoftheworkforceinanumberofeconomic

sectorsofdestinationcountries.67

Theconvergenceofsuchdemographicandstructuraleconomicfactorsinthe

context of a globalized world with easier access to the resources for migration,

makesit imperativethatrichreceivingcountrypolicymakersrealizethepotential

benefits of the liberalization of immigration policies. An outflow of labour from

underdevelopedcountriesleadstoamorebalancedallocationofcapitalandlabour

and aids in economic development of the sending country. At the same time, an

inflowofmigrantsinreceivingcountriesprovidesmuchneededcheaplabourwhich

fosters production. Migration holds the potential for decreasing inequality by

fostering globalwealth redistribution and balancingwageswhile relieving labour

pressures in receiving countries. These positive sum benefits should instigate an

acceptanceofeconomicmigrantsasagentsofgrowthanddevelopment.Migration

needstobeseenasaglobalpublicgood.

67ForexampleMexicanMigrantsrepresent77%oftheUSFarmworkforcein1997‐1998upfrom57%in1990(U.S.DepartmentofLabour1991,2000)JorgeMoraandJ.EdwardTaylor,"DeterminantsofMigration,Destination,andSectorChoice:disentanglingindividual,household,andcommunityEffects,"InternationalMigration,RemittancesandtheBrainDrain,ed.ÇaglarÖzdenandMauriceSchiff(WashingtonDC:TheWorldBank/PalgraveMacmillan,2006).

35

TrendsandDeterminantsofdevelopmentthroughmigration

Migration has the potential to be a powerful force for economic and social

development. Before examining the micro and macro processes through which

migrationcontributestodevelopmentincountriesoforiginhowever,itisnecessary

to briefly define development in order to provide an analytical focus. Doing so

allows the impact of migration to be evaluated on the basis of its merit in

contributingtothedefinedendgoal.

Theconceptofdevelopmentiscontested.Traditionally,acknowledgementof

anyconnectionbetweenmigrationanddevelopmenthas focusedprimarilyon the

economicaspects, inparticulartheimpactofremittancesoneconomicgrowthand

the detrimental affects of brain drain on the development capacity of the labour

market.68 Development, however, goes far beyond the simple process of escaping

situationsofincomedeficiency.AmartyaSen’sfoundationalapproachtopovertyas

a deprivation in capabilities, diversified understandings of development in away

that focused on the intrinsic deprivations that give economic growth its

instrumental value.69 Development encompasses more than just an increase in

wealth but contains such interrelated aspects as social advancement, sustainable

economic growth, increasing equality, and greater political freedom through

democracy.70

68DPapademetriousandPMartin,Theunsettledrelationship:labourmigrationandeconomicdevelopment(NewYork:GreenwoodPress,1991).69AmartyaSen,DevelopmentasFreedom(NewYork:RandomHouseInc.,1999).70vanNaerssen,Spaan,andZoomers,3.

36

Migrationhasa fargreaterdevelopmental impact thansimplyaneconomic

one.Approachingdevelopmentfromtheholisticcapabilitiesperspectiverequiresan

examination of the processes that strengthen health, education, good governance,

equality, and other intrinsically valuable areas needed in underdeveloped source

countries.Assuch,itisessentialtoexaminetheinfluenceofdiasporacommunities,

knowledge and skill transfers, circular migration, transnational and trans‐local

connectionsaswellastraditionalremittancesinachievingthesemultifarious goals

ofdevelopment.

Aconsiderabledegreeoftheinterestandenthusiasmthathasbeengenerated

bymigrationhascomeasaresultoftheincreaseinflowsofremittancesbymigrants

in thepastdecade.Focusingspecificallyonremittances in their fiscal form,policy

makers and development economists have been buoyed by the potential

developmentalimpactofsuchlargeandincreasingtransfersofmoneyandsavings

by migrants to their home country. By definition, remittances are financial

contributions from workers in foreign countries both to relatives and friends.

Essentially, they are the financialmanifestation of the internationalmovement of

persons.Giventhelowrateofdomesticsavingsandhighgovernmentexpenditures

in many developing countries remittances can play a critical role in local

development and poverty reduction strategies. The nature of their flows and the

factors thatdeterminetheirsizeanddestinationhowever,arewhatmakethemof

particular interest for those that consider them an important driver of

37

development.71

In 2005 the global volume of remittanceswas calculated at US $232 billion.

This represents more than a doubling from only a decade earlier in 1995 when

official international remittanceswerecalculatedatUS$102billion.72While these

figures represent rapid increases in global remittance flows, in stepwith shifting

patterns of migration, the relative share of such remittance flows to developing

countriesisencouraging.Theshareofglobalremittancestodevelopingcountriesin

2005wasUS$167billion—72percentofallflows.Thisproportionrepresentsan

increase from 57 percent in 1995 (US $58 billion). Increases between 2004 and

2005however,accountedforanabsoluteincreaseofUS$41.2billiontodeveloping

countries. While these rapid increases represent an increasing ability to better

calculateremittancetransfers,theymustbeinterpretedinlightofthefactthatdata

remains uneven, and only reflect funds transferred through formal channels.

Estimates of unofficial transfers,while unreliable,were placedbetween $100 and

$300 billion per year by a 2002 United Nations study.73 Given that unofficial

transferstendtoflowtopoorerdevelopingareaswithlowlevelsofaccesstoformal

financialinstitutions,suchremittancesholdstrongpotentialforruraldevelopment.

71LKatseli,RLucasandTXenogiani,EffectsofMigrationonSendingCountries:WhatDoWeKnow?,WorkingPaperNo.250(Paris:OECDDevelopmentCentre,2006).72WorldBank,GlobalEconomicProspects2006:EconomicImplicationsorRemittancesandMigration(Washington,DC:WorldBank,2006).73UKHouseofCommonsInternationalDevelopmentCommittee,55.

38

Even with unofficial transfers excluded, the conservative estimates of

remittances by the World Bank place them as the second largest source of

development finance after foreign direct investment (FDI). Proportionally,

remittancesaccountformorethanhalfofFDIflows,74andin2001wheretentimes

higher than the value of private non‐FDI transfers and double that of Official

Development Assistance.75 Because they do not generate the corresponding

outflowsfromdevelopingcountriesthatFDIhasatendencytodo,remittancescan

be considered themost significant source of development finance. Further, these

trends in the flows of remittances have situate them ideally for development,

benefiting an estimated 500 million people, or eight percent of the world’s74DilipRatha,"Workers'Remittances:AnImportantandStableSourceofExternalDevelopmentFinance,"Remittances:DevelopmentImpactandFutureProspects,ed.SamuelMunzeleMaimboandDilipRatha(Washington,DC:TheWorldBank,2005)19‐53.75DeveshKapur,Remittances:Thenewdevelopmentmantra?,PaperpreparedfortheG‐24TechnicalGroupMeeting,25August2003,<http://www.g24.org/dkapugva.pdf>.

39

population.76

Unlikeotherformsofhardcurrencyflows,anadvantageofremittancesistheir

tendency to bemore evenly distributed among developing countries.77While the

largestmigrantcountries like India,ChinaandMexicoreceive the largestabsolute

shareofremittances,theimpactinrelationtoGDPandrelativetoimportsismuch

more significant in low income countries. Remittances received by low income

countriesin2003accountedforanaverage3.3percentofGDPand18.5percentof

thevalueofimports78(SeeFigure4).Finally,inadditiontobeinglarge,remittances

demonstrate a long term, stable upward trajectory.79 In contrast to foreign direct

investment, remittances tend to be considerably less volatile, and in some cases

countercyclical,risingintimesofeconomicslowdowninrecipientcountries.While

capital flows tend to rise and fall in a positive relationshipwith economic cycles,

remittancesdemonstratestability,andinsomecases,determinedbyhowcritically

they areneededby their recipients, can even rise. For example, asprivate capital

flows declined in the face of the Asian financial crises between 1998 and 2001,

remittances to developing countries continued to rise. Further, as FDI and ODA

flowsdeclinedbetween2000and2003remittancesagaincontinuedtorise.

76AderantiAdepoju,TonvanNaerssenandAnneliesZoomers,Internationalmigrationandnationaldevelopmentinsub‐SaharanAfrica:viewpointsandpolicyinitiativesinthecountriesoforigin(Boston:Brill,2008).77Relativetomigrantpopulationflows.Sub‐SaharanAfricareceivestheleastamountofremittancesdemonstratingtherealitythatcertainabsolutelevelsofpovertypreventmigrationandrespondingreturns.78Ratha.79Ibid.

40

The considerable stabilityof remittance flows isdeterminedby anumberof

factors.Communitieslivingonthemargininpoorcountriestendtospendreceived

fundsonconsumptionofgoodsnecessaryforsurvival.Assuch,remittancesrespond

negativelytotheeconomicsituationinthereceivingcountry,increasingintimesof

economicdifficulty.This is reflected in thenatureof remittances examinedat the

macrolevel.Incontrasttocapitalflows,remittancestendtobehigherincountries

thatarehigherrisk,i.e.withrelativelyhighlevelsofdebttogrossdomesticproduct

(GDPP) ratios, in other words, lower income countries. Between 1996 and 2000

remittances demonstrated a tendency to be higher in poor countries with lower

than average growth rates.80 El‐Sakka andMcNabb81 have found that the flow of

80Ibid.

41

remittances to low incomecountries respondedpositively to inflation, reflectinga

needtoincreasesupportinthefaceofrisingpricesinthehomecountry.

Other factors, including the nature of the migrants, characteristics of the

migrant stock, and the host country economy, also impact the size of remittance

flows to source countries. The economic situation in the host country affects the

wages, andemploymentofmigrantsandnaturally affects real remittance rates. 82

While economic conditions in both sending and receiving countries affect the

amounts remitted, at the individual level, the duration of time with which the

migrantremainsinthehostcountryalsoplaysarole.Earningsofmigrantsgenerally

risethelongertheyremainpartoftheworkforceinthehostcountry,increasingthe

amount they can afford to send money home, while countering evidence

demonstrates that longer stays coincide with a diminishing commitment and

returnstothoseinthesourcecountry.83

Finally, low‐skilled migrants tend to remit proportionally more of their

income,84which, in combinationwith thepropensity for such remittances to reach

poorer,more remote areas, have a stronger development impact. Several reasons

explain this occurrence; unlike highly skilled migrants, who have a tendency to

settlepermanentlyabroadwiththeirfamilies,lowerskilledmigrantswhosefamilies

81M.I.TEl‐SakkaandRobertMcNabb,"TheMacroeconomicDeterminantsofEmigrantRemittances,"WorldDevelopment27.8(1999):1493‐1502.82GurushriSwamy,InternationalmigrantWorkers'Remittances:IssuesandProspects,StaffWorkingPaper481(Washington,DC:TheWorldBank,1981)positsthattheeconomicconditionofthehostcountryisthemainfactorinthesizeofremittancessenttodevelopingcountries.83OECD200784JeffDayton‐Johnson,etal.,GainingfromMigration:TowardsaNewMobilitySystem,OECDDevelopmentCentre(Paris:OrganizationforEconomicCooperationandDevelopment,2007).

42

remain in the home country, tend to migrate for shorter periods increasing the

incentivesforhighersavingsandlargerproportionalremittances.

Further,thepro‐poorimpactofdevelopmentreinforcestheimportanceofan

immigration policy that supports a migration regime that facilitates remittances.

Remittancesofpoorfamiliessentbackhomeincreasetheabilityofotherstofollow

in the same path, further increasing the volume of remittances flowing to poor

communities,andconsequentlyliftingthemoutofpoverty.Whileitisimportantto

consider how immigration policy influences the determinants and flows of

remittances,aswellas thesheersizeofmigration, it isalso important toconsider

themechanismsbywhich such remittances engender change anddevelopment in

homecountries.

43

TheDevelopmentImpactofRemittances

The impact of migration on development occurs at multiple levels. The

transfer of economic, social, and knowledge resources through migration has a

directimpactonthedevelopmentprocessatthelocalcommunitylevel.Atthesame

time, the cumulative affect of numerous transfers from the developed to the

developingworld impacts development at themacro level of the global economic

structure, acting as a process of global wealth redistribution that better situates

developing states to compete in the international economy. This section will

examinetheprocessesandimpactoftransfersbymigrantswithinindividual,family

andcommunityspheresbeforemovingontoconsiderthecumulativeimpactofsuch

remittancesatthemacro‐economiclevel.

Micro­LevelImpact

The critical question regarding the transfer of money in the remittance

process, is whether such transfers in fact make an impact on the development

potential of the receiving communities and countries. In other words, is the

developmentpotential contained in themonetaryvalueof the transferbeing fully

liberated? Legitimate concerns regarding the potential of remittances to finance

inequality and create a culture of dependency in receiving communities must be

addressed. Remittances have the potential to foster dependency, and in some

situationsinflatelocalpricesforland,housingandfood,andtodisplacelocaljobs.85

Byboostinglocalservicesectorjobs,theincreasedliquiditymayleavemorereliable

85SRussell,"MigrantRemittancesandDevelopment,"InternationalMigration30.3‐4(1992):267‐87.

44

growth oriented sectors of the economy, such as agriculture, out of the loop.86 A

dependency on remittances leaves households potentially vulnerable to the

fluctuationsintheabilityofmigrantstosendremittanceshome.Concurrently,given

the costs ofmigration, the potential for inequality at the local level is significant.

Families with the resources to overcome the initial costs of sending migrants

abroad, particularly those in themiddle‐income range, subsequently benefit from

remittancespotentiallyincreasinginequalityandcommunitytensions.87

Assuaging these concerns, analysis of how remittances are used in receiving

countries,alongwithaccompanyingqualitativeevidencesuggeststhatremittances

tendnottocreatesignificantdependenceand,additionally,haveamoredistributive

nature than one might expect. Remittances used for investment purposes hold

considerable long term potential for reducing poverty, increasing equity, and

creatingeconomicsecurity.Thisfactwouldseemtobecauseforconcerngiventhat

the bulk of remittances — up to 80 percent in some regions88 — are spent on

consumption and welfare expenditures with shorter‐term impact and a more

limited potential for increasing inequality. This pattern of consumption, and its

correspondingimplicationsfordevelopment, ismisleading.Remittancesareavital

sourceof incomeandformanimportantpartofhouseholdlivelihoodstrategiesas

argued by the New Economics of Labour Migration theory. The supplement to

household revenue has an income smoothing effect allowing for increased

86UKHouseofCommonsInternationalDevelopmentCommittee87ÖzdenandSchiff88PGammeltoft,"RemittancesandOtherFinancialFlowstoDevelopingCountries,"InternationalMigration40.5(2002):181‐211.

45

consumption of local goods and services. Richard Adams makes the case that

householdsreceivingremittancesviewsuchearningsas temporary.89Remittances

offer an opportunity for families to increase their consumption of services that

representaninvestmentinhumancapitalincludingeducation,healthcareandfood.

“At the margin, households receiving… international remittances spend… 58.1

percentmore,… on education than households that do not receive remittances.”90

Remittances enable households to engage in risk reduction strategies by

diversifying and therefore stabilizing income sources. This allows for broadened

opportunitiestopursuefurtherincome,investinproductiveresourcessuchasland

orbusinessandevensave—allfactorsthatleadtolong‐termeconomicgrowth.

While consumption may not incur the same long‐term development impact

that investment in productive resources does, it is important to consider the

measures by which the impacts are evaluated. The use of remittances for

consumptive purposes does have a greater development impact than simply

increasingthewelfareofitsrecipients.Atthecommunitylevel,consumptionoflocal

goodshasspilloverormultipliereffects: creating jobs,encouragingneweconomic

infrastructure and increasing demand for services. While families that receive

money from migrants have an income on average 1.6 times greater than those

withoutmigrants, remittances also constituted 16 percent of the income of those

withnomigrantabroad,91pointingtothefactthatinmigrantsendingcommunities

89RichardHAdams,"Remittances,Poverty,andInvestmentinGuatemala,"InternationalMigration,Remittances,andtheBrainDrain(Washington,DC:TheWorldBank/PalgraveMacmillan,2006).90Ibid,78.91OECD2007.

46

friends and neighbours and distant relatives may also receive money. What is

important to realize is that although some evidence demonstrates that families

receiving remittances tend to spend less of their total income on consumption

relative to non‐recipient families, it is the impact on absolute poverty, and the

consequentincreaseincapabilitiesthatallowspeopletoinvestindevelopment.

The reduction in the depth and severity of poverty is perhaps the most

significant aspect of the impact of remittances on development. Remittances

represent a larger total share of the income of poorer families, allowing them to

move beyond simply survival and to invest in long term security and stability

strategies.WorldBankstudieshavesuggestedthatanaverage10percentincrease

in international remittances relative to GDP leads to a 1.6 percent decline in the

proportionofpeople living inpoverty.92Althoughseeminglysmall,examinationof

the reduction in the squaredpoverty gap ameasureof the severity of poverty—

highlightsthestrengthofremittances.AdamsfoundthatinGuatemalainternational

transfers resulted in a 21.9 percent reduction in the number of people living in

severepoverty.93Mostimportantly,recipientsofremittancesdeterminepatternsof

economic expenditure. They are in the best position to make rational decisions

basedontherisksandopportunitiestheyface.Toalargedegreeitallowsthemto

participate in theirowndevelopment.Remittancesprivately94provide theneeded

resources while refraining from proscribing what should be done, thus enabling

92RichardAdamsandJohnPage,InternationalMigration,RemittancesandPovertyinDevelopingCountries,PolicyResearchWorkingPaperNo.3179(Washington,DC:WorldBank,2003).93Adams.94Privateremittancetransfersrepresentfinancingwithnostringsattacheddifferentfrommanyotherformsofdevelopmentfinancing

47

recipients to actively participate in the improvement of their welfare and the

developmentprocesswithintheircommunity.

DiasporasandDevelopment

Avaluabledriverofdevelopment throughremittances is the influenceof the

migrantdiasporacommunities.Referringtothecollectionofinternationalmigrants

living outside their homelands, diaspora are as diverse as the communities from

which themigrants originate. Transnational networks are formed on the basis of

familyandemotionalties,andinmanycasesevokeastrongsenseofcommitment

and responsibility.95 Comparative analysis by Rubin Patterson suggests that

transnationalismisan“efficientmeansoftransferringknowledge,skillsandwealth

fromcorenationstothoseinthesemi‐peripheryandtheperiphery.”96Farrantetal.,

suggest that such networks initiate Diasporic Flows, consisting of investment,

knowledge and trade.97 The very effectiveness of diasporanetworks derives from

the fact that they hold influence in both locales at once drawing on synergies of

knowledge, connections, resources, and loyalties. Development through diaspora

networks is achieved in two principal ways. The first involves the collective

encouragement and transfer of resources for investment in thehome community,

whilethesecondisderivedfromthestrengthandinfluencetheorganizationholds

95UKHouseofCommonsInternationalDevelopmentCommittee96RubinPatterson,"Transnationalism:Diaspora‐HomelandDevelopment,"SocialForces84.4(2006):1891‐1907.97MFarrant,AMacDonaldandDSriskandarajah,MigrationandDevelopment:OpportunitiesandChallengesforPolicyMakers,IOMMigrationResearchSeries22(Geneva:InternationalOrganizationforMigration,2006).

48

asasocialactorinthehostcountry.98Whilethefirstrequiresstrongsocialcohesion

and commitment to the home community, it is this same “bonding social capital”

thatcanpotentiallycreatebarrierstobroaderparticipationinthehostcountryand

marginalizethemigrantcommunity.Inordertomaintaintheresourcesnecessaryto

engage in development of the local community abroad, and bridge their

communitieswith further resources in the centre,migrantdiasporaorganizations

mustinvestin“bridgingsocialcapital”withthehostcountry.99

Insituationswherethisissuccessful(andoccasionallywhenitisnot)diaspora

organizationsofferacentralfocusforthepoolingofremittancesbymigrants,often

through fundraisingevents,allowing forcollectiveremittances tobesent tohome

communities.Byvirtueoftheprolongeddurationsoftimespentabroad,members

often have higher incomes than new migrants. The close connections that are

maintainedwiththeircommunitiesoforigincanthusbeconvertedintosocialand

economic concern for the welfare of those communities. Counter to trends of

declining transfers over time from migrants who settle in the host country, the

presence of diaspora organizations encourages continued financial flows. The

likelihood of sustained remittances increases when groups of migrants from the

same communities maintain close links as a result of their involvement in

organizations in the host country. To the benefit of the receiving community,

diaspora organizations promote the financing of community‐based projects and

98Thiswillbediscussedfurtherbelowinreferencetothemacro‐economicinfluencesofthediaspora.99SSpencerandBCooper,SocialIntegrationofMigrantsinEurope:AReviewoftheEuropeanLiterature2000=2006,OECDDevelopmentCentre(Paris:foraccessinformationgotowww.oecd.org/dev/migration).

49

investments over individual household transfers.100 While second generation

migrantsusuallysendlessindividualremittances,theyareinclinedtoparticipatein

acollective,morestructured,approachtosendingremittancesthroughcommunity

organizations.101

DiasporaInvestment

Thecombinationofabroadenedfocusonthecommunity,andthecumulative

effectofstrengthenedandsustainedresource transfers,holdssignificantpotential

for alleviating poverty and encouraging development through investment in the

private sector, infrastructure, and human capital. Furthermore, diaspora

organizations hold an asymmetric informational advantage as well as social

mechanisms that allow for better risk evaluation when investing in their home

communities. One of the largest constraints in growth in developing countries,

particularlyintheprivatesectorandsmallruralcommunities,islackofcapital.Such

start up capital is essential for the provision of credit necessary for growth. The

problem, however, is that a lack of information about such pro‐development

investment increases risk for potential foreign investors creating an effective

barrier to investment. Diaspora network members know about the business

opportunities in their home countries and can more accurately assess the risk

involved. The pooled resources allow for investment in activities such as micro‐

100KClarkeandSDrinkwater,AnInvestigationofHouseholdRemittanceBehaviour,ManchesterSchoolofEconomicStudiesDiscussionPaper(Manchester,England,2001).101TonvanNaerssen,"WeareBridgingCulturesandCountries:MigrantOrganizationsandDevelopmentCooperationintheNetherlands,"GlobalMigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008).184.

50

creditorganizationsandmicro‐entrepreneurshipendeavors.102

The asymmetric knowledge that diaspora communities possess has huge

potential for improving the social and economic conditions of their home

communities. While the remittances from what are referred to as hometown

associations (HTAs) constitute only a fraction of the overall flow of remittances,

theirspecializedknowledgeandcommitmenttodevelopmentmakessomeconsider

theirexistenceapotentialsourceofsustainabledevelopment.103Theirexistenceas

social entities committed to the development of particular regions in the South

makes themprime components in strategies of co‐development.MexicanHTAs in

theUnitedStateshavebecomekeytransnationalactorsbecauseoftheirabilityand

experience in the implementationofcommunityworks in theirhometowns.Social

investmenteffortscanbeleveragedbycooperationwithgovernmentasinthecase

of HTAs from the Zacatecas state in Mexico. The Tres por uno (three for one)

program, an initiative where the Mexican government at the federal, state and

municipallevelsmatchesthreepesosforeachpesoremittedfromabroad,“provided

they are channeled into productive social investments”104 has aided in facilitating

relationsbetweencommunitiesonbothsidesoftheborder,andoptimizedtheuse

102AbulKalamAzad,"MigrantWorkers'Remittances:ASourceofFinanceforMicro‐EnterpriseDevelopmentinBangladesh,"RemittancesLDevelopmentImpactandFutureProspects,ed.SamuelMunzeleMaimboandDilipRatha(Washington,DC:TheWorldBank,2005).103GasparRivera‐SalgadoandLuisEscalaRabadan,"Migration,CollectiveRemittances,andDevelopment:MexicanMigrantAssociationsintheUnitedStates,"GlobalMigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008).112.‐asopposedtotheflowofremittancesbyindividualswhichischaracterizedashighlyunstableattheindividuallevel.104NIskander,"SocialLearningasaProductiveProject:TheTresporuno(Threforone)experienceatZacatecas,Mexico,"Migration,RemittancesandDevelopment(Paris:OrganizationforEconomicCooperationandDevelopment,2005)249‐264.

51

of material and financial resources provided by the HTAs. These programs have

demonstrated the potential of such organizations to promote social change by

targetingthevulnerable(childrenandtheelderly),andfinanciallysupportingsuch

key sectors as education, health, urban infrastructure, and basic community

projects.Burgess,inhisstudyofMexicanHTAsinvolvement,discoveredthat:

“MexicanHTAs from stateswith a longmigratory tradition have had an

impact in the decentralization of governance and the promotion of local

development. Furthermore thesemigrant groups seem to be contributing

to a more equitable distribution of benefits through their participation

withgovernmentinitiativesandcooperationmechanisms,bychannelinga

majorityoftheirprojectstothosecommunitiesoutsidethemunicipalmain

towns, which historically tend to be smaller more rural and with little

governmentspendingonthem.”105

Oneofthemajorstrengthsthatroundsouttheinvestmentcapacityofthediaspora

networksistheirabilitytorelyoninformalnetworksandsocialcapital.Government

investment agencies from the developedworld, on the other hand, are, forced, in

manydevelopingcountries,toengageonlywithformallyconstitutedorganizations,

torealizethefullpotentialoftheirinvestments.

KnowledgeandSocialValueTransfers

Beyond financial flows and investments, the transfer of knowledge, human

capital, and social values has a strong impact on the human development of the105Rivera‐SalgadoandRabadan,120.

52

migrants’homecommunity.Migrantsgainvaluableskillsthroughtheirtrainingand

experience indeveloped countries. In itsmostdirect form, the returnofmigrants

contributesdirectlytothehumancapitalstockandknowledgetransfertothehome

country. By fostering return ideologies, diaspora organizations can encourage the

return of migrants and subsequent generations who possess significant human

capital.106Barringphysical return, thevirtual transferofknowledgeona rangeof

issues from investment, to health, education and social values are transferred

throughnetworksbacktothecommunity.Whilefinancialremittancesmayallowfor

increasedexpenditureonhealth,educationorcertaininvestments,animplicitstress

bythesenderonthevalueofsuchexpendituresaddstotheproductivevalueofthe

remittances.Higherlevelsofhealthknowledgeinmigrantfamiliesforexample(as

well as spillovers into non‐migrant families), in combinationwith higher income,

have been shown to improve child health outcomes, lower infant mortality and

increasebirthweights.107

Original conceptions of co‐development, lead by France, attempted to

optimize knowledge transfers through programs of Assisted Voluntary Return

(AVR).Migrantswere encouraged to returnand contribute theiruniqueexpertise

and skills to their home country with the assistance of the host country’s

government.Thesuccessofsuchprogramsfounderedonthedifficultyofvoluntarily

106RobertPotterandDennisConway,"TheDevelopmentPotentialofCaribbeanYoungReturnMigrants:MakingaDifferenceBackHome,"Globalization,MigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008).107DavidJ.McKenzie,"BeyondRemittances:TheEffectsofMigrationonMexicanHouseholds,"InternationalMigration,RemittancesandtheBrainDrain,ed.ÇaglarÖzdenandMauriceSchiff(Washington,DC:TheWorldBank/PalgraveMacmillan,2006)123‐148.

53

returningmigrantstohomecountrieswheretheeconomicandpoliticalconditions

of the home country are less than desirable. More successful approaches by the

InternationalOrganizationforMigration(IOM),basedonpreviousexperiencewith

AVRhavefocusedonutilizingthenetworksofdiasporaforknowledgetransferand

temporary returnprograms.TheMigration forDevelopment inAfrica (MIDA)and

TransferofKnowledgeThroughExpatriateNationals(TOKEN)programsrunbythe

IOM ensure knowledge transfers through temporary stays in home countries,

focusingonresolvinglabourmarketimbalancesinskillcompositions.108

Transfers of knowledge, skills, and money are also accompanied by social

normsandvalues that can impact thehomecountry.Migration can lead to ‘social

remittances’ — the transmission of ideas and attitudes about differing social

structures,culturalpractices,andpoliticalorganization.Inprovidingevidencetothe

House of Commons (UK) International Development Committee Joseph Chamie

(UnitedNationsPopulationDivision)explainedthat“youexportculture,youexport

ideas, you export democracy, you export many things which [cannot be easily

valuedintermsof]dollarsandcents.”109Migrantsworkingabroad,forexample,are

abletotransferinformationabouttherolesandrightsofwomeninthehostsociety,

whichcanpotentially lead tochanges in theway thatwomenare treated.Also,as

noted in the case of Mexican HTAs, social remittances likely contribute to the

decentralizationof thepolitical structures. Finally, returnmigrants canusenewly

acquiredskills,ideasandauthorityuponreturntotransformdomesticpoliticaland

108vanNaerssen,198.109UKHouseofCommonsInternationalDevelopmentCommittee,65.

54

administrativesystems.

The transferof, financial, social,andknowledgeresourcesallhavea tangible

impactonthedevelopmentprocessinthehomecommunity.Diasporaorganizations

are able to increase the efficiency with which these transfers contribute to the

developmentprocessatthelocallevel.Therealitythatmigrationisabletoprovide

the resources necessary for growth and development exposes the potential for

influencingdevelopmentthroughmigrationpolicy.

55

MacroLevelImpact

Attheglobaleconomiclevel,thesheervolumeoftheflowsofremittanceshavethe

potential to impacttheglobaleconomicstructure.Transfersmadebymigrantsact

as a mechanism for redistributing wealth between the centre and the periphery,

placing developing countries in a better position to compete for the economic

resources necessary for successful growth. The redistribution process is only one

halfoftheequation,however.Themigrationprocessatthemacrolevelaffectsthe

development position of the state by influencing the balance of the factors of

production. The emigration of workers, in combination with inflows of capital,

adjuststhebalancetogeneratehigherreturnstolabour.

Perhapsmost significantly, the cumulative impact of remittances affects the

balance of payments and foreign currency reserves of developing countries. As

noted, remittances constitute a significant portion ofmany low‐income countries’

GDP. In situationswhere countries carry heavy debt loads, orwhere imports are

highrelativetoforeignexchangereserves,remittancescanaidinprovidingfinance

for needed imports and investments spurring growth.110 Internally, remittances

providemuchneeded liquidity for credit and investmentpurposes. In somecases

theabsorptivecapacityofcommunitiesreceivingremittance flowscreatessurplus

funds thatcanbe loaned to finance further investment.Expenditureof remittance

flows at the community level benefits thewider community and regions through

‘multiplier effects’. Increased domestic spending creates chains of increased

110OECD2007.

56

spending spreading wealth and increasing demand for products and services.

Conditionsofunemploymentandunderemploymentinpoorcountriesplacethemin

theperfectpositiontobenefitfromadditionaldomesticspendingasidleproductive

capacity is needed to instigate growth. Situations where productive capacity is

strained or unable to meet demand can result in rising prices or spending on

imports,111but research has demonstrated that such multiplier effects in poorer

countriesarelargeandextendacrossmultipleregions.112

Inflowsof foreignexchangecanhavepotentiallynegativeaffectsaswell.The

increaseinthesupplyofmoneycanleadtoinflationarypressures.Remittancesmay

also experience ‘Dutch Disease”: the influx of money contributing to the

maintenance of high exchange rates discouraging exports and making it more

difficultforimportcompetingindustriestosurvive.113Evidencesuggests,however,

that these threats do not pose a significant danger to the positive gains from

remittances.Thereislittleindicationthatremittanceshaveleadtoinflation.Studies

by the IMF have demonstrated that remittances do not adversely affect the

competitivenessofreceivingcountries.Because the inflowsofremittancesarenot

generated by an industry within the country, they are spent differently, and are

spread more evenly throughout the economy. Rather than increase demand for

scarce resources they may in fact contribute to its supply. Second, the IMF has

111Thishasbeenamajorconcernregardingthespendingofluxurygoodsandimportswhicheffectivelymutethemultipliereffect,butthishasbeenshownnottobethecasewithremittancesabove.112VMazzucato,TheStudyofTransnationalMigration:ReflectionsonaSimultaneousMatched‐SampleMethodology,paperpresentedattheWorkshoponMigrationandDevelopmentWithinandAcrossBorders(NewYork,November17‐19,2005).referencedinOECD2007,86.113OECD2007,87.

57

argued that in instanceswhere the exchange rate is overvalued,migrants refrain

fromsendingremittances.Overvaluedexchangeratesdiminishthevalueofsending

moneyandmayincreasetheincentivetosendgoods.Additionally,theinternational

networks that linkdiasporaorganizationshelpbuild and strengthen international

trade by generating knowledge and demand for products from the home country

helpingtoincreaseproductivity.

The emigration of workers also has an impact on the macro‐economic

development environment for countries of origin. Under certain labour market

conditions, thedepartureofworkerscanbebeneficial.Althoughtheemigrationof

highly skilledworkers is considered tohave a detrimental impact on the stockof

humancapitalandthecapacityfordevelopmentofthesendingcountry,arguments

fortheexistenceofa‘braingain’asaresultof‘braindrain’havebeenputforward.

Thebraindrainhypothesispositsthatoutflowofhighlyskilledmigrantsincreases

the perceived return to education and thus encourages greater investment in

educationandasaresult,generatesincreasinggrowthandwelfare.Schiffcounters

this arguing that claimsof brain gain are exaggerated.114Given theuncertainty of

thereturnstoeducationrelativetothebenefitsgainedbyunskilledmigrants,such

gainsmustbeapproachedwithcaution.115

Thedepartureof low skilledmigrants on theotherhand reducespoverty at

themacrolevelinseveralrespects.Asmentioned,lowerskilledmigrantscomefrom114MauriceSchiff,"BrainGain:ClaimsaboutItsSizeandImpactonWelfareandGrowthAreGreatlyExaggerated,"InternationalMigration,RemittancesandtheBrainDrain,ed.ÇaglarÖzdenandMauriceSchiff(Washington,DC:TheWorldBank/PalgraveMacmillan,2006).115Theinvestmentineducationbypoorfamiliesreceivingremittancesfromlowerskilledmigrantshasagreaterimpactontheeconomy.

58

poorerfamilieswheretheneedforaddedincomeisgreatest;groupsthatgarnerthe

greatestutilityforthepurposeofwelfareincreasesreceivethefinancialflows.The

departure of workers from conditions of unemployment or underemployment at

low wages further relieves poverty by increasing the demand for labour and

potentiallywages.EvidencefromthePhilippines,Pakistan,MalawiandMozambique

demonstratesemigrationcanbeaccompaniedbyrisingwages—eveninthefaceof

persistingunemploymentinsomecases.116

Massemigration,whileaffectingthe interactionofeconomic factors,canalso

impact the social structures in home countries. Building on the social transfer of

ideasthroughmigrantnetworks,migrationcanimpactthesocialpositionofwomen

in the community.Migration haswidened the role of women left behind, placing

them in positions of responsibility for budgeting, schooling decisions, and

community involvement. Households were women make decisions regarding the

allocation of financial resources, have shown a propensity for more welfare

enhancing expenditure than traditional male‐headed households. Also, a growing

percentage of female migrants, often selected for their reliability in sending

remittances, are gaining increasing influence over the use of remittances,

demonstrating preferences for welfare‐enhancing consumption such as

education.117 They are able to exert amodicum of control over their remittances

once they are received. Themigration ofworkers affects the economic and social

116OECD2007.117AdmosChimhowu,JeniferPiesseandCarolinePinder,"TheSocioeconomicImpactofRemittancesonPovertyReduction,"Remittances:DevelopmentImpactandFutureProspects,ed.SamuelMunzeleMaimboandDilipRatha(Washington,DC:TheWorldBank,2005).

59

structures of developing countries in positive ways beyond corresponding

remittancetransfers.

TheMigrationCycle

Migrationaffectsdevelopmentthroughthethreedistinctmechanismsoutlined

above:1)changesinthelaboursupply,2)remittances(bothsocialandeconomic),

and3)correspondingimpactondemandandproductivitytochangesintheformer

fluctuations of capital and labour. Differences in the impact of thesemechanisms

overtheshortandlongtermrevealaprogressioninthedevelopmentexperiencesof

countries experiencing outmigration. Emigration experiences tend to progress

through different stages — stages which affect the magnitude of changes to the

economyasa resultof shifts in the threedevelopmentmechanisms.118Evaluating

the effects of migration on the development of the home country or community

involvesanappreciationofitsmigratoryhistory.

Exit. At the outset, the departure of migrants causes a decline in the

laboursupply.The lossofhighskillworkers inparticularcan lead toa

decline in productive capacity, and intra‐household inequality may

increaseandfamilyrolesmaychange.

Adjustment. The process of adjustment involves the improvement of

informationflowsreducingthecostsandrisksassociatedwithmigration.

Migrationisintegratedintolivelihoodstrategies.Asremittancesbeginto

flow in, inequality may increase as the economy adjusts to changing

118TheconceptandstagesofthemigrationcycleareborrowedfromLKatselietal.

60

internaldemandsandsupply.

Consolidation. As remittances increase and migration reaches

equilibriumwiththelabourmarketadjusting,increasedgrowthislikely

tobeginasmultipliereffectsdistributeinflowsofcapital.Expenditureon

consumptionandhumancapitalwhichstarted in theadjustmentphase

continues. In the consolidation phase, the decreasing cost ofmigration

allowsforpoorer familiestobegintomigrate, furtherreducingpoverty

andinequality.

Networking: As the position of migrants in host countries becomes

established, diaspora networks increase the investment and trading

capacitybetweencountries furtherencouraginggrowthandproductive

capacity.

Return.Finally, after growth anddevelopment have occurred, demand

forlabourmayincrease,andtemporaryorpermanentrepatriationtofill

labourshortagesmayoccur.

61

119

While the migration cycle model is theoretical, and individual countries

experienceeachstageoverdifferingperiods,itprovidesausefulanalyticaltoolwith

which to compare expectations of migration policies implemented through a

development lens. For example, as development in sub‐Saharan Africa allows for

increased mobility and international migration, the migration cycle can guide

expectations about the development affects of migration at the different stages,

givenpriorknowledgeoftheeconomicstructuresintheregion.

119OECD2007,54.‐Downarrowsrepresentadecrease,uparrowsandincreaseand0nochange.

62

PolicyPrescriptions

The inevitability of human movement in the globalized world demands

coherentmigration‐for‐developmentpolicies thatmaximize thepositive impact of

migrationondevelopmentinthesendingcountry.Attheinternationallevel,several

proposalshaveattemptedtoimprovemigrationmanagementandconcurrentlythe

distributionofbenefits.EconomistJagdishBhagwatihasproposedthecreationofa

WorldMigration Organization, as well asmeasures such as a ‘brain drain’ tax to

recouplossesfromoutmigrationfordevelopingcountries.120Whilesuchmeasures

at the international level are needed, they are unlikely to come about in thenear

futureasmany sendingand receiving states remainguardedover controlof their

immigration policy. Despite this, international migration offers opportunities to

implement various policies at the national level that can strengthen development

objectives.

World financial flows demonstrate that the poorest countries gain the least

fromthecurrent liberalizationof tradeand investment; transfers throughForeign

Direct Investment and gains from trade tend to benefit transitioning and more

prosperous countries.121 While Official Development Assistance favours poor

countries,ODAmakesup the smallest portionof international transfers.Agreeing

withtheemergingconsensusthataidismoreeffectivewhenactingasacatalystto

promotefinancialflowsanddiffusetheirbenefits,thereexistssubstantialpotential120JagdishBhagwati121DCogneauandSLambert,L’aideaudéveloppementetlesautresfluxnord‐sud:complémentaritéousubstitution?,WorkingPaperNo.251,OECDDevelopmentCentre(Paris:OrganizationforEconomicCooperationandDevelopment,2006).

63

toexploit synergiesbetweenmigrationanddevelopmentpolicy.This sectionputs

forward several broad policy recommendations that aim to enhance the

demonstrateddevelopmentgainsfrommigration,whilereducingnegativeimpacts.

Achieving this involves policies designed to increase not only migration and

correspondingflowsofknowledgeandfinances,butalsostrategiesforaugmenting

theimpactthatsuchremittanceshaveonreceivingcommunitiesandcountries.

StrategiesofCo­development

Until recently, the potential contribution of diaspora organizations to make

migration work for development has largely been ignored. Host country

governmentsareslowlyappreciatingthenetworksofsocialcapitalandknowledge

that diaspora’s possess that can be harnessed for development. In its 1997white

paperonInternationalDevelopment,theUKgovernmentcommitteditselfto“build

on the skills and talentsofmigrants andother ethnicminoritieswithin theUK to

promotethedevelopmentoftheircountriesoforigin.”122Strengtheningtheroleof

diaspora organizations in development strategies has both direct and indirect

implicationsfordevelopmentstrategies.

Indirectly,diasporaorganizationsperformacriticalroleinthesettlementand

integration of migrants arriving in host countries. Policies that strengthen the

information advantages, networks, and socialmechanisms that allowmigrants to

successfully establish themselves can act as a safety net that permits greater

122HerMajesty'sGovernment,WhitePaperonInternationalDevelopment,EliminatingWorldPoverty:Achallengeforthe21stCentury,1997,<http://www.dfid.gov.uk/policieandpriorities/files/whitepaper1997.pdf>.

64

flexibility inadmittingpoorerlowerskilledmigrants.Whileensuringnotonlythat

the migrant does not become a burden on the receiving state’s social welfare

system, such mechanisms increase the earning potential of migrants and

consequentlytheirability toremit.Further, thestrengthofdiasporaorganizations

asasocialpoliticalactorincreasesthelikelihoodthatmigrantswillfindjobsthatare

both related to, and build upon, their skill sets. Given the real potential for de‐

skillingofmigrantswhoendup in jobstheyareoverqualified for, thismechanism

canhaveapositive impactontheskillsandknowledgethatmigrantswill laterbe

abletotransmitorbringbackwiththeminreturn.Finally,theexistenceofdiaspora

or hometown associations helps maintain the transnational and translocal

connectionsbetweenthemigrantcommunitiesthatencouragecontinuedcollective

remittancesfordevelopment.

This last indirect function, maintaining transnational links and focusing

collective remittances, make diaspora and HTAs an effective medium for the

implementationofmigrationfordevelopmentpolicies.Diasporaorganizationshave

asignificantadvantageinfacilitatingcriticalmechanismsfordevelopmentincluding

businesscreation, trade links, investments, remittances,skillcreation,exchangeof

experiences,andsocialandculturalvalues.Giventhespecialknowledge,experience

and transnational positioning of these organizations, they cannot be considered

marginal players in international development. Until recently there has existed a

serious lacuna in the integration of aspects of migration phenomena into

development policies. Strategies are developed without sharing knowledge,

65

resources or consulting with expatriate networks as formal partners.123 As

organized diaspora initiatives grow in number, reflecting the position of such

grassroots initiativesasmajordevelopmentplayers, twostrategiesofengagement

needtobeemployed.DiasporaandHTAscanbeconsultedtohelpinformthegoals

and implementation of development policy run by government or aided and

supportedintheirowndevelopmentinitiativesintheirhomecommunities.

Recent initiativesbyanumberof countries,drivenbyadesire to rationalize

developmentpolicy,havebeguntosetthegroundworkforwhat issuggestedhere

byconsultingdiasporaorganizationsconcerningthedesignandimplementationof

their home country development plans. The UK Department of International

Development(DFID),inproducingcountryassistanceplansforIndiaandPakistan,

engaged in consultation with the respective diaspora communities. Following a

similar rationale, a Policy Memorandum of the Netherlands House of

Representatives (2003) established the National Ethnic Minorities Consultative

Committee(LOM)whichinvolvesdiasporaassociationsinthecreationofpolicy.124

Attheheartoftheconceptofco‐developmentisthemobilizationofdiaspora

organizations.Thestrategyseesmigrantsaspartners indevelopmentcooperation

and encourages them to engage in commercial activities and social development

projects with their home country. An International Organization for Migration

123DinaIonescu,EngagingDiasporasasDevelopmentPartnersforHomeandDestinationCountries:ChallengesforPolicyMakers,IOMMigrationResearchSeriesNo.26(Geneva:InternationalOrganizationforMigration,2006).124Ibid.

66

survey125found that 66 percent of responding governments cited hometown

associations as their main interlocutors. The unique local‐to‐local approach of

diasporainitiativescanbebuiltuponbypoliciesthatengageandstrengthenthese

approaches. A number of programs support diaspora‐led development initiatives

through co‐financing. The French government, for example, co‐finances local,

community‐led projectswhile at least 15 percent of project costs are covered by

migrant associations. Not only does such a policy exploit the strength of the

diasporainitiativesbuttheco‐financingaspectfurtherencouragesmigrantstobuild

theircapacityforengaginginthedevelopmentoftheirhomecountry

Diasporaorganizationsandhometownassociationsembodyasuccessfuleffort

tocapitalizeonthegainsfrommigrationforthedevelopmentofthesourcecountry.

Developmentpolicywoulddowelltolearnfrom,workwith,andsupporteffortsby

these organizations to utilize the gains from migration in effective development

strategies.

SupportingRemittanceTransfers

Remittances are an integral part of the process of poverty alleviation and

growth that results from migration. If strategies of co‐development are to be

successfulinencouragingmigrantsinhostcountriestoremitmoreforthepurposes

of productive investment, barriers to the international transfer of such resources

need to be lowered. Weaknesses in the financial sector and government

administration increase the transaction cost of sending money, and act as125InternationalOrganizationforMigration,"MainstreamingMigrationintoDevelopmentAgendas,No.8,"InternationalDialogueonMigration,2005.

67

disincentives. Easing such constraints is likely to increase overall remittance

receipts.

The large portion of remittances transferred through informal channels, if

shifted to official organizations, could potentially increase the efficiency of such

transfers. However, informal channels are used for a reason. Inefficiencies in

international banking, high transaction costs, and constraints to access by rural

communitiesneed tobe resolved.Averagecostsof transferring remittances range

from9.5 percent to as high as 20 percent— exorbitant in relation to the cost of

transfersbetweenindustrialcountries.Remittancetransferstendtobesmall,under

US$200,andbringingtransactioncosts tounder10percentcouldpotentiallysave

US$3.5 billion dollars annually — savings that would likely be remitted.126

International efforts to curb money laundering and terrorist financing through

informal networks, means that ensuring continued remittances will involve the

formalsectorsteppingintofillthegap.Accesstoformaltransfersbyhostcountries’

banks need to adapt to the nature of remittance transfers— small, frequent and

dispersed. Government can increase competition by providing incentives, e.g. tax

exemptionsonremittances,whichencouragetransfersthroughtheformalbanking

system and increase competition among banks. Low levels of competition, and a

dearthofinformation,meanthatremittanceagenciescanchargehighfees.Reducing

transaction costs and forcing services toworkbetter should increase competition

amongprovidersandlowercosts.

126Ratha,34.

68

Strategies that reduce transaction costs “offer great potential for increasing

the flow of remittances and in turn the resources available for consumption,

investment and poverty reduction.”127 Such policies, in directing remittance flows

throughformalchannelshavepositive indirect impactsaswell.Flowsthroughthe

formal channels increase savings and available capital for loans. Research has

demonstratedthatBanksinmigrationareasaremoreactivethaninotherregions,

whileincreasinginteractionwithbankinginstitutionsincreaseslocalknowledgeof

financesandinvestment.128

Liberalization

Finally, changes in themanagementofmigration flows throughhost country

immigration control policies possess significant potential for contributing to

development. This potential lies in the deployment of strategies that exploit the

gains from increasing temporary and circularmigration. Fair rules governing the

crossbordermovementofpeopleneed tocomplement the relatively freeand fair

rules of trade and capital flows. Circular migration refers to the repetitive cross

bordermigrationofseasonal(lessthanayear)andtemporary(staysexceedingone

year)workers.Asalreadyemphasized, seasonal, temporaryand lowskillworkers

tend to have a greater impact on poverty reduction, remitting more to poorer

families, and saving for investment in their home communities. Moreover,

127UKHouseofCommonsInternationalDevelopmentCommittee,58.128ATituEki,"InternationallabouremigrationfromEasternFloresIndonesiatoSabahMalaysia:Astudyofpatterns,causesandconsequences,"UnpublishedPhDThesisUniversityofAdelaide,2002.referencesinGraemeHugo,"InternationalMigrationinIndonesiaanditsImpactsonRegionalDevelopment,"GlobalMigrationandDevelopment,ed.TonvanNaerssen,ErnstSpaanandAnneliesZoomers(NewYork:Routledge,2008).

69

circularityencourageseffectivetransferandexchangeofacquiredskills,knowledge,

and information by migrants. In terms of the emigration of highly skilled

professionals, proposals to subsidize replenishment training in developing

countries, in combinationwith temporary visa programs that allow forwork and

trainingindevelopedcountries,havethepotentialtoinduceabraingainforsending

countries.

The successof suchanapproach relieson theabilityofpolicy to exploit the

gains from circulation, and, more importantly, to effectively encourage the

temporarinessofmigrationflows.Whilediasporaorganizationsplayaroleinthisas

outlined in the previous prescription, migration policies need to intelligently

manage the flows in a way that ensures that the skills of migrants are properly

allocated and utilized in the host country. Innovative approaches to policymight

consider relying on ‘private linking pins in international networks’ to efficiently

manage admission while maintaining the gate keeper function of the state as

insuranceforthesecurityandhealthofthedomesticpopulation.129

Evidencesuggeststhat,giventhefreedom,andsufficientlylowtransportation

costs,circularitymightbethepreferredoptionoverpermanentrelocationformany

migrants.130 The challenge for policy makers is to encourage this preference.

Presentimmigrationpoliciesinplaceinrichreceivingcountriesconveyuncertainty

regardingtheprospectsofre‐entryandthereforediscouragereturn.Restrictivevisa129MichaelJandl,ed.,InnovativeConceptsforAlternativeMigrationPolicies:TenInnovativeApproachestotheChallengeofMigrationinthe21stCentury(Amsterdam:AmsterdamUniversityPress,2007).42.130OStark,etal.,SeasonalMigration,OECDDevelopmentCentre(Paris:OrganizationforEconomicCooperationandDevelopment,2006).

70

policies and narrow regulations surrounding residence status increase the

likelihood that migrants will choose settlement over return. Resources are then

directedtosettlementovertransnationalinvestment,andopportunitiesforgainsin

both countries are lost. Flexible approaches to residence allowing ‘back and forth

rights’ by expanding the diversity in residence statuses, andmultiple entry visas,

allows migrants to adapt their strategies for movement according to changes in

priorities andopportunities formaximizing the return to theirhumancapital and

their ability to contribute to the development of their country and community of

origin.131

Concernsabouttemporarymigrationpolicies failingto inducecircularitycan

be reinforced through incentives. Development accounts, reimbursable pension

payments, and return subsidies can encourage return and investment for

development.Recruitmentfortemporarycontractsthroughprivateintermediaries,

as discussed above, generally results in higher rates of return, and can be

encouraged through incentives for repeat contracting conditioned on a variety of

assessment criteria including the respect and protection of international migrant

workersrightsaswellastheirsuccessfulreturn.132

In the multilateral framework of the World Trade Organization, policies of

temporaryandcircularmigrationcanbeadvancedinthecontextofGATSMode4.

The General Agreement on Trade in Services establishes a forum within which

countriescanadvanceliberalizationoftradeinservicesthroughrequestsandoffers

131Jandl,62.132OECD2007,129.

71

forenhancedmarketaccess.Whilesignificantadvanceshavebeenmadeunderthe

first three modes,133 Mode 4, referring to the supply of services through the

Temporary Movement of Natural Persons (TMNP), has experienced limited

liberalization. At best, offers have largely focused on high skilled intra‐corporate

transfersandthemovementofmanagers,specialistsandbusinessvisitors.Further

insulating countries from their commitment to enhance labour mobility is the

Economic Needs Test, which essentially provides countries with an opt‐out

mechanism. Multilateral Coordination and transparency are needed to prompt

further liberalization and deliver well‐ordered migration for the provision of

services. More importantly multi‐lateral liberalization holds great potential for

equitablyincreasingglobalwelfareandliftingcountriesoutofpoverty.Basedonthe

reality that the productivity of labour increases whenmigrants transfer to areas

receiving higher returns for their labour,Walmsley andWinters134 developed an

economic model that predicts massive economic gains from liberalization. A

situation in which developed economies liberalize their quotas on inward

movement of both skilled and unskilled labour by 3%, would, according to their

model,resultinaglobalriseinwelfareofUS$156billion,orroughly0.6%ofworld

income.Notonlydoesthisamountfaroutstripthecurrentcombinedexpenditureby

133TheGATSoutlinesfourwaysinwhichservicescanbeprovided(traded)internationally.Thefirstthreeareasfollows:Mode1:crossbordersupplywhenaservicefromcountryAisconsumedincountryB,madepossiblebyadvancesintechnology.Mode2:consumptionabroadwhentheconsumertravelstotheplacewheretheserviceissupplied.Mode3:commercialpresence,theprovisionofaservicebyaforeigncompany.Ofalltradegeneratedbyinternationaltradeinservices,only1.4%comesasaresultofTMNPwith80%ofglobaltradeinservicesencompassedbymodes1and3.‐(OSands,TemporaryMovementofLaborFuelsGATSDebate,June2004,<http://www.migrationinformation.org/Feature/display.cfm?id=231>.)134TWalmsleyandL.A.Winters,"RelaxingtheRestrictionsontheTemporaryMovementofNaturalPersons:ASimulationAnalysis,"CEPRDiscussionPaperNo.3719,2003.

72

alldevelopedcountriesonofficialdevelopmentassistance,butitisalsosignificantly

greaterthanthepredictedglobalwelfarecreatedbyliberalizationofallremaining

restrictionsontradeingoods,of$US104billion.

The liberalization of immigration policy controls on temporary migration

closely follows the People Flow approach tomigrationmanagement proposed by

Veenkamp, Bentley and Buonfino,135 which focuses less on controlling migration

and more on effectively managing flows, “channeling and redirecting strong

migratory undercurrents intelligently by understanding the behaviour patterns of

different types of migrants and their counterparts as well as by connecting with

theirunderlyingmotivesinconstructiveandinventiveways.”136Circularmigration

embodiesthisapproachbymaximizingthegainsofmigration,whilemanagingflows

inawaythatappreciatedtheunderlyingmotivesandconcernsofbothsendingand

receivingcountriesandthemigrantsthemselves.

135TheoVeenkamp,TomBentleyandAlessandraBuonfino,PeopleFlow,ManagingMigrationinaNewEuropeanCommonwealth(London:Demos/openDemocracy,2003).136Jandl,41.

73

Conclusion

The potential development and poverty reduction benefits of migration are

rarely acknowledged in development strategy. “A recent review of 48 poverty

reduction strategy papers [by theUKDepartment for InternationalDevelopment]

foundthat21madenomentionofmigration;ninesawitasacauseof‘brain‐drain’,

whileotherssawinternalmigrationinnegativeterms,asacauseofurbanpoverty,

thespreadofHIV/AIDSorothersocial ills.”137Atthesametime, inwardmigration

policies of developed receiving countries rarely consider the implications of

migration on development in the source country. Globalization means that

apparentlydomesticpolicyactionshaveincreasinglyrealimpactsonotherpartsof

theworld.Designingpoliciestoshapemigrationcannolongerbedoneinisolation.

This new reality means that development strategies no longer involve linear

approaches tosolving the intrinsicproblemsofunderdevelopment,whichbroadly

defined, includes sustainable economic growth, poverty eradication, social

advancement,humanempowerment,andsocioeconomicequity.

Approaches to development by policy makers needs to look for and work

towardscoherenceamongdiversepolicies.Migration, inparticular,hassignificant

impact on thedevelopmentprocess of poor countries of origin anddemands that

development‐consciousmigration policies consider the implications and potential

gains that can be garnered from coherent policy. Through processes of financial,

social, and knowledge transfers,migrants carry real potentialwith them to affect

137UKHouseofCommonsInternationalDevelopmentCommittee,73.

74

change in their home countries, but their ability to do so is affected by the

circumstances and challenges they face in overcoming the migration policies of

destinationcountries.

This thesis has put forward policy recommendations that capitalize on the

benefitsofmigrationforthepurposeofdevelopment.Strengtheningthetrans‐local

networks that bind migrants to their home communities, takes advantage of the

specialized knowledge and intimate attachment they have to their countries of

origin.Increasingtheeasewithwhichremittancescanbetransferredisessentialfor

facilitatingtheprimarymechanismwithwhichmigrationachieveslocalinvestment:

global wealth redistribution. Finally, and most significantly, liberalization and

reformationofdevelopedcountrymigrationregimestopromotecircularmigration

increases globalmigration stocks and corresponding flows that positively impact

the growth and development of source countries, and supports the gains from

migration thathave thegreatest impactondevelopment.This innovative, indirect

approachtodevelopment,demonstratestherealityofourinterconnectedworldand

therealpotentialformigrationpolicytoactasatoolforincreasingglobalwelfare.

75

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