Is Migration Good for Development?

How Could You Even Ask?Lant Pritchett

Harvard Kennedy SchoolPresentation at

Columbia UniversityFeb. 13, 2009

Is Migration Good for Development?

• Ideas and their evolution: Marx and Foucault• Spatial Based versus People Based thinking—

why does dirt matter in theories of justice?• The movement of people leads to development

gains orders of magnitude larger than anything else on the agenda

• For some places mobility may be the only development agenda

• Ideas and their evolution: Crazy, Crazy, Crazy, Obvious

The world that was lost in 1914

He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could dispatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference.

JM Keynes

Second Globalization as Farce

Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce. …Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living.

Karl Marx, remarks somewhere

Deconstruction, the most powerful idea of your time…

• There is no “reason” or “discourse” or “truth” there is just power

• Power socially constructs reality such that the agenda is deeply controlled without explicit repressions—its “common sense”

• “Deconstruction” is the subversion of the socially constructions of established discourse

• So, where do we look for overwhelming power? Not to controversy but for silence…what opposes the truly powerful is not controversial but just plain crazy

…has yet to tackle nationalism the most powerful idea of my time…

• God is dead

• All “..isms” are mortally wounded (e.g. racism, sexism, sexualism)

• “Truth” and “Reason” have retreated into scare quotes

And the “imagined communities” that are “nations” are all that is left

Estimated wage gains to low skill workers of crossing the US border—on average (from

42 countries), conservatively, P$10,000

0

5000

10000

15000

20000

25000

Ann

ual e

anri

ngs

(in P

PP

)

In home

In USA

Wages of “same” workers$10,000 to $15,000 (in PPP)By crossing the border

Place based versus People based thinking

• A person moves from Peru to the US, his/her income increases by $10,000.

• Suppose no one else is affected.• Assume they make above average wages in

Peru and below average wages in the USA.• The traditional, “national” place based measures

(e.g. GDP per capita, average wages) of “development” go down in both places

Output per natural (or wages per natural or poverty per natural) is the

more natural way to think• If person

moves from rural to urban the wage gain counts, of the person moves from state to state the wage gain counts—the natural global measure of development has to count the movers somewhere.

0100020003000400050006000700080009000

Inco

me

per

pers

on (r

esid

ent o

r na

tura

l)

Guyana

Guyanese

Jamaica

Jamaicans

Labor Mobility is bigger than anything else on the agenda

• The gain from a lifetime of microcredit is the same as 8 weeks working in the USA

• Total annual gain to Grameen Bank borrowers (around) $30 million

• If I get 3,000 Bangladeshi workers into the US, do I get a Nobel Peace Prize?

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

14000.0

Annual gain,micro-credit

Monthly gain,migration

Net presentValue, lifetimeof micro-credit

Annual gain,migration

PPP

$

Debt Relief…

• Total foregone payments due to HIPC debt relief in Africa—about 2.5 billion (in 2005)

• About 150,000 Africans to the US--.1 percent of the labor force, about 1 percent of monthly gross job growth, about one (good) months net job growth

• If a labor mobility activist accomplishes that do they get to sing at the Super Bowl?

[Picture of Bono here]

From the top of the cliff at the borders that faces labor you cannot see the

gains from goods or capital

65000

65 1090

10000

20000

30000

40000

50000

60000

70000

Complete liberalizationlabor mobility

Complete equalizatoinMPK

Complete liberalizationof goods markets, todeveloping countries

Wel

fare

gai

ns, i

n bi

llion

s $

Stand the question on its head…

Not “Is Migration Good for Development?” but, since labor mobility is so good for proper, people based, measures of development why is there so much talk about things that have gains that are so much smaller?

(Hint: It has something to do with power)

But it is worse…

• The myth of the current international system, the world created to “win the peace” after WWII—the “Pax Americana” is:– The world can be divided up spatially into

arbitrary bits– Each of those bits can achieve an adequate

standard of living

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H u t c h i n so n

I ri o n

J a c k

J a c kso n

J a sp e r

J e f f D a v i s

J e f f e rso n

J i m H o g g

J i mW e l l s

J o h n so n

J o n e s

K a rn e s

K a u f m a n

K e n d a l l

K e n e d y

K e n t

K e rr

K i m b l e

K i n g

K i n n e y

K l e b e rg

K n o xL a m a r

L a m b

L a m p a sa s

L a S a l l e

L a v a c a

L e e

L e o n

L i b e rty

L i m e sto n e

L i p sc o m b

L i v e O a k

L l a n o

L o v i n g

L u b b o c k

L y n n

M c C u l l o c h

M c L e n n a n

M c M u l l e n

M a d i so n

M a ri o n

M a rt i n

M a so n

M a ta g o rd a

M a v e r i c k

M e d i n a

M e n a rd

M i d l a n d

M i l a m

M i l l s

M i t c h e l l

M o n t a g u e

M o n t g o m e ry

M o o re

M o rr i s

Motley

N a c o g d o c h e s

N a v a rro

N e w to n

N o l a n

N u e c e s

O c h i l t re e

O l d h a m

O ra n g e

P a l o P i n to

P a n o l a

P a rke r

P a rm e r

P e c o s P o l k

P o t te r

P re si d i o

R a i n s

R a n d a l l

R e a g a n

R e a l

R e d R i v e r

R e e v e s

R e f u g i o

R o b e rts

R o b e rtso n

R o c kw a l l

R u n n e l s

R u sk

S a b i n e

S a nA u g u st i n e

S a nJ a c i n t o

S a n P a t r i c i o

S a n S a b a

S c h l e i c h e r

S c u rryS h a c kl e fo rd

S h e l b y

S h e rm a n

S m i t h

S o m e rv e l l

S ta rr

S te p h e n s

S te rl i n g

S to n e w a l l

S u t to n

S w i sh e r

T a rra n t

T a y l o r

T e rre l l

T e rry T h ro c km o rto n T i t u s

T o mG re e n

T ra v i s

T ri n i t y

T y l e r

U p sh u r

U p t o n

U v a l d e

V a l V e rd e

V a nZ a n d t

V i c to ri a

W a l ke r

W a l l e r

W a rd

W a sh i n g t o n

W e b b

W h a rto n

W h e e l e r

W i c h i t a

W i l b a rg e r

W i l l a c y

W i l l i a m so n

W i l so n

W i n kl e r

W i se

W o o d

Y o a ku m Y o u n g

Z a p a ta

Z a v a l a

R ed = C o u n ty D ec lin ed ; N et D ec lin e b e tw een 0 an d 5 ,0 0 0P u r p le= C o u n ty D ec lin ed ; N et D ec lin e b e tw een 5 ,0 0 0 an d 1 0 ,0 0 0Blu e= C o u n ty D ec lin ed ; N et D ec lin e g r ea te r th an 1 0 ,0 0 0G r een = C o u n ty I n c r eas ed b y m o r e th an 1 0 ,0 0 0

Experiments been run—its called the USA

Same institutions,

Same Policies,

Free labor mobility

What happened?

People got out of Dodge

Contiguous regions of the USA are a third their counter-factual size

Region of the United States(contiguous counties)

% change in population 1930-1990

Ratio of current populationto counter factual at rate of natural increase

Number of countries (of 192) with smaller area(with examples)

Ratio of area per capita income to national average

Texlahoma -36.8% 0.31 117/192(Nicaragua,Bangladesh)

92.2%

Heartland -34.0% 0.33 117/192 85.2%

Deep South -27.9% 0.36 96/192(Jordan, Austria, Sri Lanka)

62.6%

There is no theory or evidence to rule out the possibility of Ghost

countries

• Persistent negative shocks to labor demand--the “supportable population” at any level of population

• If labor is mobile you get “ghosts”—declining populations (e.g. rural midwest)

• If labor is not mobile you get “zombies”—populations trapped in a spiral of declining wages (e.g. Zambia?)

Back to ideas

• Pax Romana—spatial integration (or sorts)

• Pax Britannica—full globalization (of sorts)—labor, capital, goods

• Pax Americana—just goods and capital

“Globalization” of the Pax Romana—Not a single Roman emperor after 100

A.D. was born in Italy

Weekly food for a family in Bargteheide, Germany, $525 per

person/month

Source: Hungry Planet

Weekly food for a family in Tingo Ecuador, $14.72 per person per

month

Source: Hungry Planet

Food for a family in Chad, 86 cents per person per month

Source: Hungry Planet

Attitudes towards Interracial Marriage in the US

0

10

20

30

40

50

60

70

80

90

1958

1968

1972

1978

1983

1991

1994

1997

2002

2003

2004

2007

(Jun

e)

2007

(Sep

t)YearPerc

en

tag

e o

f P

op

ula

tion

Percentage of PopulationApproving

Shift in ideas, silly, controversial, progressive, then obvious

1992

LA riots spurred by tape of Rodney King beating

1963

MLK’s March on Washington

Barack Obama runs for President

of the United States

MLK assassinated

33% increase in approval over 4 years

Crazy, crazy, crazy…hero