Paul Collier’s “Exodus”: Economic Tools to Bust Migration Myths

This week marks the one-year anniversary of Pine Tree Republic (and thank you to everyone who has contributed so far to the community through reading, sharing, and commenting on posts!). As we’ve discussed international events over the last 12 months, it’s safe to say that one of the most complex issues has been the mass migration of people across borders, without an effective system to properly track and accommodate migrants. In 2015, the number of international migrants living in a country different from that of their birth reached 244 million, a 41 percent increase from the number in the year 2000. Notably, refugees comprise nearly 10 percent of that total, a number that may increase as the number of refugees across the Mediterranean is expected to be even higher than last year.

With these trends in mind, I couldn’t resist picking up a copy of Paul Collier’s Exodus: How Migration Is Changing Our World while browsing through a bookstore last summer. The Oxford University economist has made a career exploring the systemic barriers and choices facing poor countries and poor people , through books such as The Plundered Planet and The Bottom Billion. In Exodus, his latest book (published in 2013), Collier applies his economic mindset and development experience to global migration, unearthing some counterintuitive connections that feed this system.

Spring 2016 Book Club Selection: Exodus: How Migration Is Changing Our World, by Paul Collier

• Softcover, 273 pp.
• Paul Collier – Professor of Economics and Public Policy at the Blavatnik School of Government, Oxford University
• Other books include The Plundered Planet and The Bottom Billion

Laying the Foundation for Understanding Migration

The foundation of this book – and what makes it worth reading – is Collier’s economic analysis of the root causes and impacts of migration, on the migrants themselves, their host communities, and their countries of origin. Rather than falling into a false dichotomy of whether migration is entirely good or wholly bad, Collier is more interested in what makes the rate of migration accelerate or decelerate, and how a country can assess its optimal rate of migration. In the first part of the book, he introduces the reader to a simplified model that seems to be broadly applicable to a wide range of migration cases, e.g. Bangladeshis immigrating to the United Kingdom, or Tongalese to New Zealand.

In these cases, the rate of migration depends on the income gap between the host country and country of origin (generally, the greater the income gap, the greater the incentive to migrate), and the size of the immigrant diaspora in the host society. This second factor turns out to be crucially important to predicting migration flows: Diasporas – communities that recent migrants establish in a host country –  are instrumental in reducing the hidden costs of migration, by smoothing the path for new migrants to settle into residences, jobs, and social networks. Generally, diasporas that are larger in size attract even more migrants as they decrease the costs of migration.

And this is one of Collier’s first counter-intuitive principles: The rate of any particular migration flow between two countries, in the absence of any checks and balances, tends to get larger and larger, fuelled by a positive feedback loop whereby increased migration leads to larger diasporas, which then pave the way for even greater migration. Combined with the fact that income inequality will continue to persist between countries for quite some time, the global implication of Collier’s model is that, “for the foreseeable future, international migration will not reach equilibrium: we have been observing the beginnings of disequilibrium of epic proportions.”

But why should we care if migration continues unabated?

Collier certainly acknowledges that, in an unequal world, migration is an important and powerful tool to help address global imbalances. But he also carefully argues that there is such a thing as too much migration, because it has real costs for both the host and sending countries. In economics terms, Collier writes:

The economics of migration is driven by the individual maximizing decisions of migrants and their families. Diasporas reduce the costs of migration, and so the larger the diaspora from a country of origin, the higher will be the rate of migration from it. But the social costs of migration are driven by the externalities that these privately maximizing decisions happen to generate. The paradox is that the economic logic of private maximizing decisions, which by definition reap the maximum economic benefit for decision takers themselves, appears also to increase the social costs.”

What are these costs? Collier provides a nuanced view of the economic impacts of migration on host societies. For example, poor migrants tend not to have much of an impact on wages – contrary to popular belief – but they do compete with other poor people from host countries for limited social housing. However, Collier argues that in the long run, the economic impacts of migration are relatively trivial, as immigrants and their offspring integrate within the larger host society.

In Collier’s analysis, the more significant impact from migration is less easily quantifiable – how it affects social cohesion, or what he terms mutual regard. Collier defines this term to mean the willingness of members of a society to finance transfers to less successful members (e.g. the willingness to pay taxes and support social safety nests), and to cooperate with others in providing public goods (e.g. the willingness to participate in and accept the results of democratic elections). In this line of thinking, preserving mutual regard should be the paramount concern of migration policy, because if it dissolves, it affects not just attitudes towards immigrants, but attitudes towards everyone in a society. Integration of migrants therefore becomes an important part of the immigration puzzle, because if the rate of immigration exceeds the rate of integration, Collier’s model predicts that  immigration and un-integrated diasporas continue to fuel each other’s growth, to the point that it risks threatening social cohesion.

Residents of the mostly-immigrant neighbourhood Molenbeek, in Brussels, Belgium, light candles to remember the victims of the November Parisian attacks. Source: EPA/OLIVIER HOSLET

And what are the consequences for countries of origin, i.e. those which migrants leave? Here again, Collier paints a nuanced picture. If the ultimate goal at a global scale is to help poorer countries develop more quickly, migration can assist in that goal, up to a certain point. On an individual level, migrants often serve as an “insurance policy” for their families; by working in a country where they can make a higher salary, they can send money back home in the form of remittances, which provides families near the poverty line with an extra cushion to survive economic or natural disasters, and perhaps helps finance a small business or education for a sibling. On a national level, having some of the brightest minds migrate temporarily to study abroad can help train the next generation of leaders and entrepreneurs, and also provides incentives for families to invest in educating their children. But here again, unabated migration brings costs, in the form of a “brain drain”, where a country’s best and brightest leave for good (Collier points to Haiti as an example of this).

Getting Migration Policy Right

Collier concludes his examination by offering recommendations for developing migration policy that is fit-for-purpose – encouraging enough migration to benefit migrants, host societies, and countries of origins, but not too much migration to upset this careful balance. The recommendations themselves are nothing new: Collier goes through the set of migration ceilings, selection criteria, legalization pathways, and integration policies that have been broadly discussed in other writings. Rather, the more interesting part is his take on why it’s so important to get this balance right. In more rigorous detail than can be shared in this blog post, Collier paints a picture of what happens if migration policy goes wrong, which could play out over decades.

A PEGIDA rally in Germany. PEGIDA is a nationalist movement that has protested Germany’s acceptance of refugees, and which has enjoyed increase support in recent months. Source: Sean Gallup/Getty Images

As a spoiler alert, an initial period of too much migration may lead a host country to cap migration at a level higher than the equilibrium where it is balanced by the integration of newcomers to the host society.  Consequently, the un-integrated diaspora grows to the point at which panic spreads in host societies, prompting a much lower cap on migration. If that cap is lower than the natural equilibrium point, it may encourage illegal forms of immigration, which can further stoke public fears that seek to turn off the migration tap altogether. When Exodus was first published in 2013, this may have seemed like a slightly exaggerated scenario; now, in a year of increasing border controls in Europe and more radical proposals in the U.S. election campaign, it suddenly doesn’t seem far-fetched.

This latter example points to one important omission in Collier’s analysis, which he could be forgiven for missing a few years ago: What happens when there is a massive shock to the global desire for migration, as we have seen with more than 4 million Syrian refugees over the past four years alone? If “getting migration right” means achieving a careful balance, and that balance is thrown off by significant, unplanned migration flows (as countries in the Middle East and Europe are experiencing), does this potentially upset the global migration system for years to come?

Unfortunately, the early signs point to “yes”. Since the beginning of the new year, German political opinion seems to have shifted from being largely sympathetic to welcoming refugees, to now permitting fringe and xenophobic arguments to take root. Elsewhere, European Union members are reinstating border controls not seen since the Schengen Agreement, or even questioning whether they should remain in the EU at all.

And perhaps this is the fundamental challenge of global migration. In a time where political, social, and environmental crises seem to be increasingly intense and unpredictable, will the glacially-slow political systems of most democracies ever be able to catch up with the rapidly-changing supply and demand of migration? And if not, what are the alternatives to an out-of-balance system that spawns extreme solutions in a futile effort to catch up?

Discussion Questions

• What happens when there is a “shock” to the global flow of migrants, e.g. refugees fleeing a state in collapse? Is there a way to plan for and accommodate these shocks?

• How does migration differ between host societies in the developed world, and host societies in the developing world? Are there special considerations – costs and benefits – for developing countries that are also host societies?

• Currently, approximately 3 percent of the world’s population can be considered “immigrants” (meaning they now live in a country different from their country of birth). Is this percentage likely to increase significantly, increase a little, decrease a little, or decrease significantly over the next 50 years? How will this affect nation-states?