Adam Smith Inst: Liberalise immigration to boost international development, says new report

11 Feb 2016 11:01 AM

Britain’s international development policy should use guest worker programmes to allow more of the global poor to come and work in Britain.

Moving from a poor country to a rich one can boost an individual’s income 20-30 times – even Peruvian immigrants earn 3 or 4 times more in a developed country than they do with similar education and skills in Peru.

Institutions determine prosperity more than people do—it’s too hard to bring good institutions to developing countries, but bringing their people to good institutions can deliver many of the benefits more reliably.

The best international development policy would be to let in more workers from the third world in to work in Britain, according to a new paper from the Adam Smith Institute. Politicians should stop trying to save entire countries with foreign aid programmes and instead help their inhabitants by letting them move to developed countries, it says.

The report Migration and Development argues that doling out billions in foreign aid risks propping up corrupt kleptocratic governments and having little impact on development; letting people move to where they can be most productive is a reform that really works.

The paper, authored by Swedish policy analyst Fredrik Segerfeldt, suggests an immigration target, modelled on the 0.7% of GDP foreign aid target, in order to boost the welfare of the global poor.

Not only would this help the migrants themselves, but it would even help their source countries to develop, Segerfeldt says. Migrants send around three times as much home in remittances as governments send in foreign aid, and this private development aid is far better targeted, going directly to those in need and not through flawed institutions. The money is often used by developing country citizens to educate themselves and raise their human capital, helping to create a virtuous development cycle.

To assuage worries that migrants will empty the state’s coffers as a fiscal burden on the state, Segerfeldt advocates both that migrant work permits be temporary, and that the full suite of benefits would only be available to natives.

Commenting on the report, Executive Director of the Adam Smith Institute Sam Bowman said:

”The best way to cut global poverty is to allow more of the world’s poorest people to come and work in Britain. With appropriate controls, a guest worker programme similar to the US’s Green Card system could give a huge boost to people from developing countries. There’s a multiplier effect here too: migrant workers send back an enormous amount of money to their home countries – about three times as much money as is sent in official development aid – and this reduces poverty at home, and may even provide investment capital for economic growth.

Though people may be concerned about immigration, they also have a desire to reduce global poverty if possible. In this paper we argue that the costs of letting more poor workers in are much lower than commonly believed, and the benefits much greater.”

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Head of Communications, at kate@adamsmith.org | 07476 915072.

To download a free copy of Migration and Development, click here.

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07476 915072.

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.