The economic models used to evaluate migration must be expanded to consider the social sciences if we are to gain a full understanding of the issues, says Paul Collier.
In the first of three public lectures on November 22 at SPP, Paul Collier, a Visting Professor at SPP and a specialist in the political, economic and developmental predicaments of poor countries, explained how the economic models currently used to evaluate migration are far too simplistic and must be expanded to include an understanding of migration grounded in the social sciences. While economic models look at overall economic growth which can be created by migration, they fail to consider whether its benefits are actually passed on to the countries from which the migrants leave, or to the migrants themselves. For a proper understanding of the global effects of migration, Collier believes that the effect on the social models of both the host and source countries, as well as the migrants themselves must all be considered. This is the approach which Collier has taken in his new book, Exodus: How Migration is Changing Our World, and which he began to cover with this first lecture.
“Is migration an inevitable part of globalization?” was the question with which Collier opened this lecture. “There's a lot of loose thinking which sees the future as one in which everything is globalized in the sense that everyone lives everywhere: I don't think that is correct. Over the last 60 years migration in OECD countries has remained constant while trade has exploded – we move goods rather than people. Global migration has increased, but only within one particular category. It is not migration between developing countries just as it is not migration between rich countries – it is migration from poor countries to rich ones.”
Economists have traditionally recognized that the key driver of migration from poor to rich countries has been the growing income gap between the developed and the developing world. In his lecture, Collier pointed out though that this purely economic viewpoint provides much too simplified criteria against which to evaluate migration. Collier believes that researchers should be looking to the social sciences to expand on the models which economics provides. The income gap is, in current economic thinking, created by the effectiveness, or lack thereof, of a society's institutions. "Economics doesn't use the concept of narratives, social psychology does. But societal narratives and norms are important in dictating the effectiveness of institutions. Does a society view the world as a zero sum game in which one person must lose in order for another to gain? Such a view is not conducive to cooperation."
"The norm of trust is important in deciding the cost of doing business in a society. A low trust society will obviously have a high transaction cost, making it more difficult to conduct business," Collier explained. Through his work in Africa, Collier has seen that the striking feature of many poor African nations is a lack of effective organizations. He puts this down to work forces which have not internalized the goals of their organizations. "Rich countries are full of effective organizations and poor countries are not."
Migration from poor to rich countries, he explains, is driven by three factors, and the income gap is only one of these, and not even the most important of them.
The second factor affecting migration is its cost. Collier describes migration as an investment, the cost of which includes travel and a period of unemployment while the migrant seeks work in their new host country. Investment in migration is not something which can be easily afforded by the poorest people in a poor country and so it is generally the middle and upper income groups of poor countries who will even be in a position to consider migration as an option.
The third and most important factor in driving migration, according to Collier, is the diaspora size in the host country. A poor country's diaspora in a host country is the single most powerful influencer of migration. A diaspora provides a welcoming environment for an immigrant with a network of living and employment opportunities. It also reduces the cost of migration by providing a source of financing for the initial investment in migration, as more wealthy members of a developed diaspora can help new immigrants finance their travel costs and can help to absorb the initial expenses upon arrival in the host country. A large diaspora and a large income gap combined will give the strongest incentive – both reducing the costs and increasing the rewards of migration.
With the true root of the income gap lying in the difference in effectives between the social models seen in developed nations and those in the developing world, Collier describes migration in terms of a movement of people from ineffective to effective social models. The priority for the 21st century, he believes, must be the spreading of effective social models rather than the spreading of populations.
Collier is a Visiting Professor at the School of Public Policy, CEU, Professor of Economics and Public Policy at the Blavatnik School of Government and Director of the Centre for the Study of African Economies at the University of Oxford. He is also Co-Director of the International Growth Centre and is currently a Professeur invité at Sciences Po. He will return to SPP to deliver the next two lectures in this series in 2014 and again to teach a class on economic development as part of SPP's Master of Public Administration degree program.