[OPE-L] Migration and Development

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Nov 04 2005 - 01:48:54 EST

EPW Perspectives
October 22, 2005

Migration and Development
Government attitudes to migration - internal and 
external - have changed radically in recent 
years. Formerly seen as evidence of chronic 
social and economic breakdown, internal migration 
is now seen as a major mechanism for the 
redistribution of resources from richer to poorer 
localities and a vital means of raising the 
incomes of the poor. The same revision of view is 
affecting international migration. Remittance 
flows have become major components in the foreign 
exchange earnings of a number of countries. After 
some reluctance, governments have come to embrace 
emigration for work, to facilitate and reinforce 
its effects on the alleviation of poverty. 
However, there are problems in the loss of the 
most enterprising and best-trained workers of 
developing countries. Can the interests at stake 
- developing countries, migrants, developed 
countries - be reconciled? Temporary circulatory 
migration for the purposes of training would seem 
to be the best outcome, so that migration becomes 
a means to enhance the human capital of 
developing countries for the task of reducing 
world poverty. There are, however, many options 
for developed countries without immigration - 
from the reform of their domestic labour markets 
to off-shoring. The real choice is about what 
sort of world we want.
Nigel Harris

In the recent past, migration in and from 
developing countries has most often been seen by 
governments as both abnormal and a sign of 
chronic social breakdown - an implicit indictment 
of a society's capacity to provide the social and 
economic conditions which permit people to lead 
an adequate way of life in the place where they 
were born. Many newly independent governments 
attributed internal migration to the damage 
inflicted by colonialism - or capitalism - and 
assumed that the newly liberated powers of the 
State could be used to end territorial 
inequalities and create the economic homogeneity 
across the national territory which was 
supposedly the promise of nationhood. In 
essence, population immobility, a settled nation, 
was seen as the norm. In those societies where 
nomadism was a significant phenomenon, the 
cruellest measures were undertaken to 
force people to settle (as in the well 
known cases of the Roma in eastern Europe and the 
Kazakhs in the interwar Soviet Union).
From the 1950s with the increasing tempo of 
urbanisation in newly independent countries, 
particularly those which grew economically most 
swiftly, this negative attitude towards migration 
was reinforced by the fear that the modern 
economy and local government would be overwhelmed 
by the numbers of migrants and the spread of vast 
squalid squatter settlements and shanty towns. At 
the beginning of the 1980s, a UN survey reported 
that a majority of governments in developing 
countries were dissatisfied with the internal 
distribution of population, and were either 
actively pursuing or considering policies to 
change this distribution. In some cases, this led 
to draconian policies of expelling large numbers 
of families from urban areas or shifting 
population by force to places where the 
government thought people should be (Ethiopia is 
said still to be undertaking this kind of policy; 
Mumbai and Zimbabwe are currently still pursuing 
large-scale urban squatter clearances). In 
possibly the most extreme case, in China, the 
bulk of the population was immobilised by decree, 
and others forced to move elsewhere; this pattern 
of control was steadily undermined by clandestine 
migration (much as irregular international 
migration undermines immigration controls), 
numbering possibly some 80 million by the time of 
the beginning of reforms from 1978.
It is amazing that this set of negative attitudes 
towards migration - and the associated singularly 
cruel policies of enforced relocation or 
immobilism - could have been sustained so long. 
For the evidence was abundant and available that 
migration was always not only one of the most 
powerful mechanisms for the redistribution of 
income - in migrant remittances - from rich to 
poor areas, but also an indispensable means 
whereby poor households were able to diversify 
their incomes and ensure their survival [Harris 
2004, Ellis and Harris 2004]. Thus, one of the 
first World Bank reports on China in the early 
1980s specifically criticised Chinese migration 
policies as forcing poor people to remain trapped 
in poor localities instead of allowing them to 
escape to areas of greater potential. (China was 
not alone, but undoubtedly the most thorough in 
this perverse policy; at various times, other 
governments pursued forced population movements 
or tried to prevent them - for example, the 
Philippines, Indonesia, Malaysia, Tanzania; and 
many more pursued population expulsions from the 
cities or inter-provincial transfer.)
Now that the agenda for developing countries has 
been transformed, supposedly, to a single-minded 
attempt to reduce poverty as embodied in the 
Millennium Development Goals, governments have 
embraced a remarkable reversal of policy by now 
seeking not to block migration or expel people 
from the cities, but to facilitate mobility and 
the protection of families on the move.
Parallel to this recognition of the positive and 
important role of internal migration in 
redistributing income between rich and poor 
areas, in alleviating poverty, has come the 
increasing awareness1 that the same 
generalisation applies to international 
migration. International remittance flows are 
emerging as major sources of revenue for 
developing countries. Indeed, of all the various 
economic linkages between developed and 
developing countries that are involved in the 
reduction of poverty - capital, aid, trade - one 
of the most important, migration for work, is 
usually almost completely absent from the 
Migration and Development
In the 1990s, the dynamic of Europe's labour 
market attracted much larger numbers of regular 
and irregular workers from outside Europe, adding 
to the inherited stocks of the 1960s - 
globalisation has, as it were, now become 
inescapable on the streets of Europe's big 
cities. The by-product of this change has been an 
extraordinary increase in the flow of worker 
remittances to their home countries (increasing 
rapidly worldwide and now approaching US$150 
billion - including estimates of unofficial 
transfers in cash and kind, of $300 billion - 
possibly six times the levels of official 
development aid, now approaching $70 billion). 
The local value of these transfers is vastly 
increased by the substantial differences in 
purchasing power between developed and developing 
countries. The multiplier effect further 
compounds the total economic impact.
In development terms, this is a remarkable and 
unexpected increase in the revenues of developing 
countries. In addition, remittances are, in 
contrast to other revenue and investment flows, 
counter-cyclical (they increase in a recession), 
do not generate counter-flows (payments for 
imports, profits on foreign investment), and 
often go directly to those in need in some of the 
poorer localities [Suro 2003].
In sum, it has become apparent that one of the 
key restrictions on developing countries' 
capacity to increase the incomes of their 
inhabitants is the political control of 
immigration in developed countries; it is these 
controls which frustrate the potential for 
developing countries to exploit to the full their 
comparative advantage in low cost labour.
There is a school of thought which rejects the 
argument that worker remittance flows are an 
unmixed benefit. First, it is suggested that such 
sources of income are inherently unstable, and 
that long-term dependence upon them forces 
families to sacrifice local development (so that 
they could earn an adequate income while staying 
at home) to migration, to the export of labour 
resources. The point is strengthened by empirical 
studies which show that often the bulk of 
remittance revenue is spent on immediate 
household consumption, rather than devoted to 
saving and investment to expand the productive 
base of the local area. The argument reproduces 
one of the traditional arguments against internal 
migration. However, it is difficult to see why 
earning an income in a local factory is superior 
to earning one in a factory in another country, 
particularly because the real income involved may 
be much higher, so that it makes much more sense 
from the migrant's point of view. On the other 
hand, any increase in the revenue to a poor area, 
expended on consumption goods, relaxes one of the 
most powerful constraints on the development of 
poor areas, the narrowness of the local market 
(because of low incomes). So expenditure does not 
have to be on investment goods to stimulate 
development - spending on foodstuffs, for 
example, has, other things being equal, the 
effect of raising the incentives of farmers to 
produce more; the same is true of other sectors. 
Of course, this is not so if increased foreign 
income is expended on imports and there are cases 
where this is so, but in general, this seems not 
to be the case (and continuing import 
protectionism in developing countries reinforces 
Governments in developing countries, after some 
reluctance, have become eager to harness this new 
source of revenues for development.2 The most 
striking case is not in Europe but in the area of 
much larger flows, between Mexico and the US. 
The 400 or so home-town clubs of the 
Mexican diaspora in the US have mobilised to 
finance development projects in their home 
localities - to pave a road, build a health 
clinic, primary school, etc. Mexican local, state 
and federal governments have, in some states 
offered three dollars to match each dollar 
remitted by a worker abroad, and realigned 
domestic anti-poverty, health and educational 
programmes (Progresa, now Opportunidades) to 
reinforce the impact of remittance flows [Escobar 
et al 2003, O'Neil 2003a]. The Mexican 
government, after long years of apparent 
humiliation at the scale of emigration of its 
citizens, has moved to track their destinations, 
keep in touch, supply Mexican identity cards (for 
irregular migrants), facilitate cash transfers 
and offer advice. Other countries have developed 
schemes to utilise the scarce skills of their 
most highly skilled citizens abroad to upgrade 
universities and the professions, and to start 
industries of innovative technology [Lowell 2001, 
Findlay 2001].
Migration, however, can remove from the labour 
force of a developing country the most skilled, 
energetic and enterprising workers, making much 
more difficult the task of conquering poverty. It 
would be quite wrong for Europe to seek to secure 
the welfare of its inhabitants at the cost of 
developing countries. Are there ways in which 
migration could be turned into a positive 
reinforcement, rather than a reduction, of 
development efforts?
Immigration in Developed Countries: The Interests at Stake
There is clearly a conflict of interests here - 
between the developed countries need to recruit 
workers abroad to reinforce their existing 
workforce (albeit without necessarily encouraging 
settlement); the developing countries need to 
retain their skilled workforce (but without 
losing the enrichment of their skills through 
work abroad), and the interests of migrants 
themselves. At the risk of oversimplifying the 
complexities, on what basis might these interests 
be reconciled?
The Source Country
The interest of governments in sending countries 
is in retaining the skilled labour force while 
permitting skill-enrichment through experience 
and training abroad. The system which would best 
meet this requirement would be temporary circular 
migration, with the migrant ultimately returning 
to their original country with enhanced skills. 
The migrant, while abroad, retains their social 
embeddedness in their home country and is 
discouraged from permanent exile.3 Similarly, a 
source country government might encourage the 
emigration of the low skilled in order to 
maximise remittances. In the course of this, the 
low-skilled might enrich their capacities through 
training and work-experience, at which stage, the 
source country might want to encourage the worker 
to return with those skills, with savings, 
knowledge of market, contacts, etc. Again, 
temporary circular migration might be the option 
most favoured here.
The Migrant
As noted earlier, migration is one of the most 
important mechanisms for the redistribution of 
wealth from rich to poor areas. Most of this 
migration is internal. Take the example of China 
with something of the order of between 98 and 120 
million migrants outside the province of their 
birth, remitting sums to families left behind now 
nearly equal to 60 per cent of rural household 
incomes (that is, a greater proportion than is 
earned in farming).4 In terms of helping the 
poorest families to survive, it is an enormous 
injection of income. It is also a vivid 
illustration of migration as means to diversify 
the income of poor households (particularly in 
the agricultural off season) and so allowing most 
households to meet the costs of continuing to 
live in the same place.
International migration is much more costly to 
undertake once, let alone to circulate many 
times. However, its great advantage is in the 
difference in purchasing power values between 
developed and developing countries, a low income 
in the first becomes a middle income if spent in 
the second - what we might call the 
"international migrants bonus". Not only does 
this make the incentive to work abroad initially 
much stronger than that suggested simply by wage 
differences compared at official exchange rates, 
it makes for a willingness to work at wages well 
below those expected in a developed country. 
That, however, is only true if migrants do not 
spend where they earn. If they are obliged to 
support themselves in the developed country, a 
low income will yield only the standard of living 
of the poor - the migrant's bonus is lost.
It is here that immigration controls exercise 
their most destructive effect by preventing 
circulation and forcing migrants to settle as the 
condition of continued access to work.
The US experience is a vivid illustration of 
this. Mexicans have traditionally circulated 
seasonally for work to the north. With the 1986 
and 1992 immigration acts and steadily increased 
expenditure, successive presidents have attempted 
to make the US-Mexico border impassable. There 
have been a number of negative effects [Cornelius 
2001, Massey et al 2002], but one of the most 
interesting has been the fact that Mexicans have 
been obliged to settle for much longer periods to 
recoup the increased costs and avoid the 
increased risks of border crossing. One study 
suggests that in the early 1980s, Mexican 
irregular migrants stayed on average three years 
in the US; in the mid-1990s, nine years. With 
nine years, the migrant brings or acquires a 
spouse, puts children into school and so, in 
effect, becomes a settler, albeit generally a 
poor one. Thus, the perverse effect of tighter 
control is not at all that it ends irregular 
migration but rather forces circular migrants 
into settlement
Wherever immigration controls are introduced, it 
ends circulation and forces migrants into 
"immigration", that is, settlement. It 
substitutes for temporary work abroad in order to 
continue living at home, permanent exile. In 
terms of the interest of worker-migrants, 
temporary circulation for work, we can infer, 
would perhaps be the best form of migration so 
that they are able to return with their earnings 
- and benefit from the bonus.
There are many suspicions in developed countries 
here, even though, without controls, it is 
commonly observed that migrants circulate. With 
the 1890s decline in trans-Atlantic transport 
costs, nearly half Italian migrants to the US up 
to 1914 returned to Europe; 30-40 per cent of 
Portuguese, Croatians, Serbs, Hungarians and 
Poles [Baines 1991]. In the European Union, it is 
noted that immigrants of particular countries 
(Greece, Spain, Portugal) started to return when 
those countries joined the Union (and so acquired 
the right to circulate). Furthermore, Constant 
and Zimmerman (2003) estimate that 60 per cent of 
existing guest-workers in Germany are repeat 
migrants [also Eichengreen 1994, Dustman 1996].5
However, public debate in developed countries too 
frequently assumes all who enter wish sooner or 
later to settle, to join the national club. Of 
course, the sheer numbers entering show this not 
to be the case. Legal temporary work has the 
effect of opening a legitimate space between 
entering and working in a country and settling or 
joining the club. Such systems already exist and 
with proper management, succeed without great 
losses. However, the existence of two classes of 
inhabitants - those who are members and those who 
are not - raises questions about the nature of 
the nation state, democratic government and 
sovereignty which lead to legitimate 
apprehensions in the existing citizenry. These 
are, perhaps, of lesser significance in remedying 
the economic problem - labour to staff the 
developed country's economy and a means of 
pumping resources to developing countries.
The Destination Country
The developed countries of Europe seek to 
compensate for any demographic decline (and 
changing age-structure) in the labour force as 
well as recruiting scarce skills as the structure 
of the economy changes more swiftly than the 
training system - but to do so without offending 
the xenophobic sensibilities of the settled 
electorate, that is, without significant 
permanent settlement.
Temporary circular migration would meet the first 
requirement - workers migrating for one or two 
years to work, build their savings and return 
home. There would be many problems of short-term 
adjustment (particularly in language competence), 
in managing the social security system, etc, but 
none which render circulatory migration, in 
principle, impossible. The second requirement is 
more difficult. The permanent recruitment and 
retention of highly skilled workers from 
developing countries is perhaps only sustainable 
if the developed countries pay - either to repay 
the costs of training existing skilled workers or 
of future skilled workers (something already 
undertaken by some aid programmes).
However, a compromise might benefit both 
countries - that is, if all migration became 
training and work experience, modelled on foreign 
student and work-experience programmes: that is 
to say, a partnership programme to enhance the 
human capital of developing countries for the 
attack on world poverty. Aid programmes might be 
usefully refocused in support of such a campaign.
European Aid to Developing Countries
Official aid programmes to developing countries 
play a great variety of roles, from supporting 
macroeconomic balance and reforms, financing 
responses to emergencies, to projects. Project 
aid has a mixed record of achievement and can, in 
certain circumstances, lead to the subordination 
of the perception of the developing country's 
requirements to the interests of the donor. This 
does not happen with remittances which carry no 
political strings. However, the lack of local 
development agents can jeopardise the outcome of 
aid projects. Donors employ governments in 
developing counties, consultants and, 
increasingly NGOs to play the role of local 
implementing agents. However, with circulatory 
migration and return, there could be an immense 
number of development agents in returnees. Aid 
programmes could then be employed to reinforce 
the efforts of returnees, the impact of 
remittance flows and, as now, the efforts of 
developing country governments and NGOs.6
Enhancing human capital is widely seen as one of 
the most important issues in economic development 
and circulatory migration can contribute to this 
aim. On the one hand, temporary migration 
includes a large number of students who come to 
Europe to study. In many cases, they are also 
allowed to work. On the other, if we were to 
think of all circulatory migrants on the model of 
students (including in study, work experience, on 
the job training, and enhancement of professional 
skills), then migration could simultaneously meet 
Europe's requirements for workers and enhance the 
human capital of developing countries through 
returnees. In addition, treating all migrants on 
the same basis would militate against the current 
tendency to create a two class system in which 
the highly skilled are able to move fairly 
freely, work and settle, but the low skilled are 
expected to be tied to the soil of their native 
place. Aid programmes in conjunction with host 
country educational institutions, could be 
enlisted to organise the training, education and 
professional development programmes of migrants, 
track returnees, and offer follow up programmes 
in the student's country of origin, of aid and 
support for development projects.7
The national "management of migration" - as in 
Britain - exists, less for any defensible 
economic reasons, but above all to reassure the 
citizens in developed countries that their way of 
life will not be overwhelmed. Here, national 
politics and the fears of electorates confront 
the pressures generated in the domestic and world 
labour markets to integrate in a global economic 
order. We are well advanced in comparable 
processes in trade and capital, even though still 
very far from free trade. But it would seem most 
likely that a similar evolution will occur in 
migration to free and unrestricted migration - if 
efficiency and equity are to be secured. However, 
in present circumstances, this aim is so far from 
reality, it must seem utopian (as would have 
seemed in 1950 the degree of free trade achieved 
The problems are at their most severe in the 
transition to the global integration of what were 
semi-closed self-sufficient national labour 
markets. However, if the transition is slow 
enough, there is time for electorates to become 
accustomed to unprecedented levels of mobility 
and the relocation of parts of the world economy 
- for example, from the Atlantic area to east, 
south and south-east Asia. National economies 
become less territorially bounded economic 
complexes, more logistical and management centres 
for unbounded global networks, including many 
activities which are beyond the authority or even 
knowledge of the governments concerned.
At the moment, it is the dynamic and changing 
labour demand in the developed countries - even 
when this coincides with high levels of 
unemployment - which induces regular and 
irregular immigration. The expansion of the 
European Union has temporarily masked the effect 
of labour shortages. The west European states, 
particularly UK, are now recruiting labour from 
the new accession states, and this can be 
perpetuated if Romania, Bulgaria and Turkey join 
the EU. But the new accession states also have a 
demographic problem, and if Europe as a whole 
begins to reach its aspired rates of growth, 
these reserves could rapidly be exhausted. The 
more rapidly the European economy expands, the 
less self-sufficient in labour supply and 
skill-mix it seems to become.
But in the process of transition to an integrated 
global economy, there are many intermediate 
stages. There are also many reforms - many of 
them already underway - which may reduce the 
pressures for migrant workers:
- later retirement ages, tax and other efforts to 
reduce non-employment and the numbers on 
disability support;
- more careful use of skills so that, for 
example, nurses take over some responsibilities 
of physicians; teachers are given assistants; 
skilled workers are able to cover more ranges of 
skilled work (as in construction, etc);
- redoubled efforts, including allowing pay to 
rise significantly, to ensure people are able to 
acquire skills in demand.
Outsourcing/offshoring is the other side of the 
coin to migration - in the one case, economic 
activity moves to the worker, in the other, the 
worker moves to the work. The full resources of 
outsourcing have barely been perceived as yet. 
manufacturing - with the "unbundling" of the 
commodity - and the digitalisation/codification 
of many services, supported by new technology, 
have allowed the emergence of global supply 
networks and global patterns of collaborative 
But the potential for non-tradables to become 
tradable is just beginning - in off-shore 
universities, offshore medical treatment, retail 
trade zones, etc. There is some possibility that 
partnerships may replace one-way flows of skilled 
workers - instead of Indian doctors or Filipina 
nurses moving to, say, Manchester hospitals in 
permanent exile, partnerships between hospitals 
in UK, India and the Philippines for the mutual 
exchange of staff and patients can enrich all (as 
well as lower costs). Furthermore, the 
development of offshore retirement centres can 
much reduce the demand for labour-intensive 
services in the developed countries.
Finally, for the migration which remains 
necessary, there are many mechanisms other than 
immigration, forced settlement and permanent 
exile. We have discussed circulatory migration as 
a mode of enriching human capital. But contract 
labour, operating within companies (as do the 
staff of multinational corporations at present), 
circulating between countries for the purposes of 
major works - construction, highway building and 
maintenance, hospital and city cleaning services 
- is another option. The Doha GATS round of 
discussions might be an occasion to discuss such 
issues in connection with what is known as Mode 
4, but at present this seems unlikely to produce 
dramatic results. However, we are only on the 
threshold of ageing and the contraction of the 
developed countries' labour force; the need of 
western multinational service companies (banking, 
insurance, transport, IT) to operate in the 
larger developing countries, combined with the 
growing shortage of unskilled labour in the 
developed countries could well force concessions 
in a later trade round.
The danger is that the fears will so overwhelm 
us, some will try to reverse the process of 
integration, to draw back and restore the old 
national fortresses. War is the great force which 
drives the world back to the old world, the 
triumphs of which were two world wars in the last 
century. After 200 years or so of building nation 
states and the appropriate national identities, 
at least some people might find the cumulative 
effect of these processes undermines psychic 
stability - and the economics of labour migration 
become disastrously mixed with the politics of 
personal identity.
The dangers in mismanaging the transition to 
global integration are thus considerable - but 
the rewards in terms of the reduction of world 
poverty even greater.
Email: znv20@dial.pipex.com
1 There have been a number of efforts to estimate 
the beneficial effects of the end, or of a 
reduction of immigration controls on developing 
countries or the world economy - see Hamilton and 
Whalley (1984); Walmsley and Winters (2004); 
Winters et al (2003); Iregui (2002); Moses and 
Letnes (2202).
2 As also have financial institutions, 
development banks, aid donors, etc - see 
DFID-World Bank (2003).
3 Of course, this is most difficult where 
economic migration cannot be distinguished from 
the search for asylum - the regime ruling in the 
country from which the migrant comes is 
4 Report of a survey of the Chinese Ministry of 
Agriculture, Financial Times, February 26, 2004.
5 The German guestworker case is often cited to 
support the proposition that "there is nothing so 
permanent as a temporary worker". However this is 
a misjudgment since the introduction of 
immigration controls themselves powerfully 
affected behaviour: (i) employers pressed the 
government to keep workers because the suspension 
of the programme meant that there could now be no 
replacements; (ii) workers tried to stay because 
they recognised that, if they left, there would 
be no repeat opportunity to work in Germany; 
(iii) in any case, a significant proportion of 
guestworkers did leave Germany - see Werner 
(2001); Constant and Massey (2002). There are 
many other schemes of circular migration that 
have worked effectively - for example, the 
US-Mexico Braceros scheme, contract labour 
schemes in the Persian Gulf, etc. In the case of 
the Mexico-Canada agricultural labour programme, 
in the 28 years of its operation (with 12,500 
workers involved in 2002), no Mexicans overstayed 
their visas, and 5 per cent returned to Mexico 
before their visas expired - O'Neil (2003).
6 There have been proposals in Europe to link aid 
to migration, but less to reinforce development 
than punish governments for not preventing 
7 There have been many experiments here - see, 
for example, the Belgian Migration for 
Development Programme, the French programme with 
Mali, etc.
8 For the economic issues in the transition, see Harris (2004).
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Commonwealth Secretariat, London.

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