Wednesday, 17 December 2014

International aid will not stem the flow of migrants

by L. Alan Winters

As the political tension over migration from developing to developed countries increases, I hear more often from ‘liberals’ (in the UK sense) that we should use developed countries’  international aid to try to stem the flow. There are, indeed, lots of good reasons to send aid to low-income countries – don’t believe the stories that it has no, or even a harmful, effect – but curbing emigration is not one of them. Earlier this year Chris Parsons of Oxford University and I surveyed the literature and concluded that there is very little evidence that aid curtails migration and a good deal that suggest the very opposite.  This survey is available as Working Paper 16 'International Trade, Migration and Aid: A survey' from the Migrating Out of Poverty Consortium, based at the University of Sussex and will be published on 26th December in the International Handbook On Migration And Economic Development, edited by Robert E B Lucas.
Why doesn’t such an apparently obvious policy work? First, aid is too small to affect migration by closing the gap between rich and poor: with a typical developed country having income per head some 25 times higher than a typical low-income country, even a big and highly effective aid flow will be only a drop in the ocean.  Second, as aid increases the incomes of people in developing countries it is likely to make it easier for them to afford the high costs associated with international migration. That is, it provides the means to migrate. Third, delivering aid generally increases the contacts between rich and poor nations and so increases the information flow and deepens the networks between them, which reduces the risks entailed in migration.
Both aid and migration have a role in fostering development and alleviating poverty; let’s not view them as substitutes.
 Professor L. Alan Winters is the CEO of the Migrating out of Poverty Consortium and Professor of Economics at the University of Sussex.