Thursday, March 27, 2008

Strong Frontiers vs. Aid to Development: A Marginal Comparation of Anti-Migration Policies

Once immigration problems became so evident that not even anti-western Left could deny its existence, the ideology-making machine found a way to turn need into virtue, and started demanding all kinds of international aid programs, under the argument that developing Africa would put an end to migration problems. Note that, in the racist-leftist view of the world, Africans have nothing to do with their development; they are passive subjects of their own history.

Is the Left right? Is foreign aid a good program to end migratory flows? Let’s use two points to show that the myth of aid to development is a believable anti-migration policy.

First: the economical effect of the aid to development is small, null or even counter-producing.

Second: economical development, in very low per capita income level, exacerbates the migratory problem.

1. - The effect of the aid to development

What’s the capacity of foreign aid to generate development? Well, the answer is more ambiguous than liberals think. In countries with great institutional development, as those in the north pacific (Japan and Korea), the Israel State, post-war Europe, even authoritarian and efficient dictatorships as Taiwan, the aid has played a minor but appreciable role in the economical development by making certain products cheaper, guaranteeing certain privileges and stimulating business.

Minor but appreciable”… Europe, Japan and Israel do not owe their development to American dollars. Maybe the best support coming from United States, in these cases, has been military aid, promoting political stability, and offering educational opportunities to the governing elites. Countries develop by themselves, and to the last extend, international mendicancy may be moderately beneficial but hasn’t made any country rich. It is private international investment that has played an essential role in development, as much in a direct way, as through its technological externalities.

However, for countries with strong institutional underdevelopment, the exogenous income, either from international aid as much as from natural resources, has had disastrous effects in economical terms, and above all, in political stability. The benefits of individual work are not easily appropriated by the State. A State that taxes a productive middle class is limited by the need not to destroy the incentives structure that makes the existence of its fiscal base possible.

These limitations do not affect the exogenous income. The Saudi cleptocracy has accumulatedmany times the Marshall Plan in Swiss accounts: the rest has gone to bribe tribal allies, religious chiefs, international terrorists, and of course, to buy female slaves in the Asian human flesh markets. Well, that’s the African model: the political-tribal chaos of Nigeria, the dictatorships of West Africa or the racist regime of Zimbabwe. International aid to Africa has only being good to support criminal regimes and to exacerbate the competition for power and wealth sources: a melancholic experiment of Public Choice Theory…
Stylized fact of the day: (from Marginal Revolution) “estimated wealth of African wealth held in foreign accounts, expressed as a percentage of African GDP: 172” [1]

Someone could propose to bring down those governments, before starting with the development programs (like in 1945)… with U.N. support? Or maybe France´s?

2. - The Laffer curve of immigration

We have already seen that the transmission mechanism that goes from the aid to the development is more than doubtful. This assertion has no special merit. It has been made many times and from different platforms. But everybody accepts without criticism that economic development is by itself a way to reduce migratory flows. Sure? More development= less immigration?

Well, it’s clear immigrants look for countries richer than their own, therefore, economic convergence should reduce migratory flows among countries.
In the case of most Latin America in East Europe, the argument seems indisputable. They are poor but no miserable countries, therefore, the decision to migrate is at the reach of many. But where misery prevails, many don’t know, or cannot migrate. That’s why as countries go from miserable to simply poor, the migratory flows they produce, increases.

Another stylized fact: (from Marginal Revolution) “Contrary to economic intuition, it is often the poorest migrants who leave last”. And Tyler Cowen adds: “As Mexico gets richer, more people are coming to United States”.

I think this allows us to create a simple economical hypothesis: the answer of the immigration between two countries to the income differences has the form of The Laffer curve (see below). That’s why, for very poor countries, a raise in per capita income, increases the migratory flows. It is unusual to find malnourished immigrants in the boats that cross the Gibraltar Strait because malnourished Africans do not migrate…

Here’s a graph of the stylized evolution that I suppose for the relation between migration flows and per capita income (PPP):

In the above graph, we show two extreme cases: Senegal and Poland. In the case of Poland which is in the decreasing side of the curve, when moving towards the convergence, migratory flows to the rich country decrease. In the case of Senegal, is just the opposite…

If the hypothesis behind the curve is right, it breaks the blaming discourse about immigration as the result of underdevelopment: for a time, African development will bring negative effects in the way of increased migratory flows towards Europe. And I say, are we ready?

3. - Marginal comparison regarding the safe frontiers program and migratory diplomacy

If the old social-democratic and Samuelsonian principles still apply, the programs of public intervention should be compared in terms of marginal efficiency. That is, for any given objective, we will choose the public program that achieves, with one additional monetary unit, a maximum efficiency to accomplish the objective.

Let us compare now the two contention programs in marginal terms:

For each euro spent on international aid, how many less immigrants will reach our territory?

And now:

For each euro spent of frontiers defense (including conditional international aid programs for anti-migratory collaboration, and increased surveillance and patrolling), how many less immigrants will reach our territory?

A minimal intuition indicates that the answer to the second question is several magnitude orders above the first one. Therefore, without prejudice to our preference for international generosity, we should not believe we are fixing the migration problem with that money.

Anyway, by making the aid to development conditional to the aid the countries give to reduce migratory flows towards Europe, we can do both: to practice generosity and defend our unrenounceable interests.

[1] Harper's Index, October 2005 issue, p.11

PD.- From know onwards, comments are open. Enjoy!


Vital Core said...

World population is projected to start decreasing around 2050, and South America will soon not be having children at replacement. The Hispanic immigration to America will slow on its own.

Heck, right now the TFR of Hispanics in America is about 4, while for those who stay in Mexico it is much less, below 3. Mexico is running out of people to send; 1/10 are already in the US. As popluations shrink, children will become too valuable to let go.

UN Stats:

Central America 209m by 2050, TFR=2.7 & falling

Mexico 140m by 2050 TFR=2.4 & falling

South America 527m by 2050 TFR=2.5 & falling

Anonymous said...

I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.