Tuesday, September 18, 2018

Misplaced spending. Foreign aid does not reduce migration

While Western governments invest billions of foreign aid dollars in programs aimed at reducing the flow of migrants into the United States and Europe, the evidence suggests that such efforts can be futile, and even counter-productive. Two researchers at Center for Global Development argue that a smarter approach would be to manage migration for the benefit of all sides, instead of trying to halt it.


Michael Clemens, Co-Director of Migration, Displacement, and Humanitarian Policy and Senior Fellow at Center for Global Development
Photo: CGD



Hannah Posten, Former Research Associate at CGD
Photo: CGD

Programs that aim to deter migration from poor countries by targeting the “root causes” have historically done little to reduce the flow of migrants. The evidence suggests the opposite: the notion that aid can substantially and sustainably deter emigration is weak at best. There is little sign that aid has systematically targeted the most migration-relevant sectors or locations. The ability of aid to cause large, short-term changes in national income, employment, or security is not independently demonstrated. And overall development—better incomes, health, and education—is in fact strongly associated with rising emigration.

AID FOR DETERRING MIGRATION

With unexpected waves of migrants and asylum seekers crossing the Mediterranean and the US Southwest border, development agencies have received a renewed mandate to deter migration from poor countries - despite empirical evidence that this does not work. The EU has pledged EUR 3 billion to solve the so-called “root causes” of destabilization, forced displacement, and irregular migration from Africa. The United States has similarly poured millions of dollars into addressing the key drivers of unaccompanied, undocumented child migration from Central America.

In a new CGD Policy Paper, we have reviewed the evidence on whether foreign aid has deterred emigration from poor countries in the past, and draw lessons about its potential to do so in the future. For such efforts to succeed, assuming “root causes” aid commitments are disbursed accordingly, foreign aid must substantially change conditions in migrant origin countries, and such change must cause fewer people to move.

Assume first that aid disbursements reflect commitments to key “root causes” policy areas like employment creation, basic local-level service provision, migration management, and governance. It is not enough for these funds to target development outcomes which could shape migration in principle. Aid must also affect these migration-relevant development outcomes to a sufficient extent to deter future emigration.

Then take for granted that aid can help achieve the key desired outcome of economic growth. How long might it take for a now-poor country to develop to the point where emigration begins to fall? Almost 200 years, at the average historical growth rate. If aid could somehow triple growth, it would still take half a century. It is far from clear whether such growth is feasible. We find similarly ambiguous results for employment creation, conflict prevention, and human rights programming.

This is not to say that aid cannot affect conditions in major migrant origin countries in future. But there is one clear implication: Aid would need to act in unprecedented ways, at much higher levels of funding, over generations, to sufficiently affect major drivers of migration.

Even setting aside all the above concerns and supposing that aid does effectively achieve development progress in the lowest-income countries: Do fewer people choose to move if conditions at home improve? Unfortunately, the evidence is equally weak. Emigration from middle-income countries is typically much higher than from poor countries; 67 of the 71 countries that grew to middle-income status over the past 50 years also saw increased emigration rates. This suggests that development does more to encourage migration in the poorest contexts than to stem it. And there is no evidence of a link between migration and changes in non-economic development indicators (health, urbanization).

Many recent “root causes” aid programs have focused on youth job creation, with the rationale that getting a good job at home could preclude the need or desire to move internationally. We do find an unmistakable negative relationship between youth employment and migration: emigration from countries where 90% of youth are employed is only half that of countries with 70% youth employment. But aid agencies have had great difficulty in effectively fighting youth unemployment. And the greatest engine of youth job creation is economic growth, which in poor countries tends to raise emigration. Thoughincreased employment opportunities may substantially reduce migration rates in poor countries that remain poor, it may not do so in dynamically expanding economies.

Youth employment programs in poor countries that remain poor may have the potential to modestly reduce emigration spikes in the short-term. But aid efforts aimed at shaping migration must look beyond deterrence. Demographic realities imply that large-scale migration will continue in some form for the foreseeable future.

MANAGING MIGRATION

So, what are states to do? We suggest managing — not trying to halt — migration, in a way mutually beneficial to both the destination and origin countries. This requires innovation and a willingness on the part of governments and private actors to pilot ideas and open new lawful migration channels. The Global Skill Partnerships idea is one such innovation. It involves a bilateral agreement between a developed and developing country, wherein the developed country gets directly involved in shaping the skills it needs most in its economy to fill labor gaps. Training of prospective migrants is done in the origin country, saving on costs to the destination country and benefiting the development of the origin country through technology and skills transfer. Not all trainees will migrate, providing the local origin markets with more skilled labor. Those who do migrate have the opportunity to pursue new opportunities and benefit their home country through remittances and intellectual transfers. The developed destination country gets precisely the skilled workers it needs; the origin country gains a significant development boost through its own skilled labor; and migrants and trainees gain new skills and opportunities they didn’t have before.

Finding triple-win solutions like the Global Skill Partnership innovation will be imperative to “solving” migration realities. Migration can provide immense contributions to the destination and origin countries, when well managed. Now is the time for governments to take an honest look at the realities behind migration now and in the future, and act pragmatically to ensure mutual benefits for all.