Paul Collier
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of government of developing countries had studied abroad. 11 Given this remarkable overrepresentation of former migrants in the leadership teams of small, poor countries, the net effect is surely positive: as a result of migration, these countries have more educated leaders.
This raises a further question: does education matter for leadership? President Mugabe accumulated several degrees during the liberation struggle, and his cabinet was similarly well educated, but this did not avert misgovernance. However, Zimbabwe turns out to be an outlier. Recent work by Timothy Besley, Jose G. Montalvo, and Marta Reynal-Querol investigated whether education affects leadership performance and found a significant and substantial beneficial effect. 12
We should therefore expect that whereas the emigration of the already educated has ambiguous political effects, emigration in
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order to get education should be beneficial. A recent study by
Antonio Spilimbergo provides convincing evidence.
13 Using a
remarkable global data set compiled by UNESCO on students
studying abroad since 1950, he investigated the link between their experience of political regime while studying, and the subsequent political evolution of their country of origin. He found that foreign study has lasting influences wholly disproportionate to the raw number of people involved: evidently, students trained abroad in later life become influential back home. But it is not the training per se that matters: students trained in undemocratic countries do not exert pressure for democracy. The more democratic the
host country, the stronger the subsequent influence for democracy. The precise route by which this works remains to be
researched, but Spilimbergo suggests that it might be through personal identity. Akerlof and Kranton, whose work I introduced in chapter 2, suggest that just as an effective firm encourages workers to identify with the organization, so education in a democracy may inculcate a sense of common identity with the international demo-
cratic community. 14 As part of studying, students have their norms reset to the standards of democratic societies and bring them back home.
If education improves the quality of leadership, and education in high-income democracies inculcates democratic political values in students from poor countries, we should expect that if a future leader gained her education in a high-income democracy, the quality of her leadership would benefit twice over. Not only would she be educated, but she would have absorbed democratic values. This is a precise hypothesis, and in principle it is testable: it just requires painstaking data collection digging out the personal histories of hundreds of leaders. Reassuringly, new research finds the support-
ing evidence: Marion Mercier has just done it. 15
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So, pulling this together, in the typical country of the bottom billion, although migration depletes the overall stock of educated people, it enables the society to draw upon foreign-educated students and other former migrants for its top public positions, and this in turn significantly improves the quality of governance.
While through a combination of pressure and selection of leadership, migration has beneficial effects on governance, it is only one of many influences, and its importance should not be exaggerated.
The presumed importance of a politicized diaspora was one of the crucial misjudgments concerning postinvasion Iraq. Two African societies with the largest diasporas are Cape Verde and Eritrea. Both have had prolonged and massive emigration to the West, particularly to the United States, over decades. In both the diaspora has remained heavily engaged: the government of Cape Verde periodically visits Boston, which probably has the largest cluster of Cape Verdians anywhere in the world, and the Eritreans in Washington, DC, also get regular visits from their government. Yet in respect of governance, Cape Verde and Eritrea are poles apart. On the Mo Ibrahim Index, a comprehensive rating system run by Africans, Cape Verde regularly scores around the top: in 2011 its retiring president won the $5 million Mo Ibrahim leadership prize. Meanwhile, Eritrea routinely scores around the bottom: the regime is highly authoritarian, with power concentrated around the president and its youth desperate to escape the country but conscripted en masse into the army. 16 If such a high common exposure to migration to America can coexist with such diametrically opposed styles of governance, then perhaps migration is not such a powerful force for change.
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CHAPTER 9
The Economic Consequences
IN ADDITION TO ITS INDIRECT POLITICAL EFFECTS on
those left behind, migration has direct economic effects. The most common phrase used to describe them is “brain drain”: emigration draws off the brightest, most ambitious, and most educated people from the society. But we should be wary of the premature use of labels that have such a strong normative force. “Brain drain” pre-empts the issue of whether the emigration of the most talented is overall adverse for the society.
Is “Brain Drain” the Right Concern?
Superficially, there seems to be no issue: the most talented people are an asset for their society. Although most of the returns to talent accrue to the talented, some of their productivity spills over to others. In the production process, educated people raise the productivity of less-educated people, thereby raising their wages. Further, high-earning
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people pay higher taxes, and these finance public goods that benefit everyone. So if emigration reduces the number of talented people in a society, it will affect the less talented adversely. While this might appear to close the issue, it hasn’t. The key question is whether the emigration of a talented person in fact reduces the stock of talent remaining in the society.
Evidently, in a direct sense if a talented person emigrates, the stock of talented people is indeed reduced by one. But talent is not primarily innate. The talent that produces high productivity is not given by the gene pool; it is built by education and effort. Education, like migration itself, is an investment. Effort is, well, effortful: given the choice, we would all prefer sloth, albeit disguised by a term kinder to our self-esteem. My own motivation for working on the bottom billion was the recognition of the vast untapped potential locked up in mass poverty. My father was a bright man who was taken out of school at age twelve and then faced the Depression of the 1930s: he had no chance in life. I see the frustrated life of my father millions of times over in these countries. The possibility of emigration opens up life chances dramatically, not just for the migrant but for the entire family. Recall that in many cases migration is more a family decision than that of the migrant alone: the migrant is not escaping from the family but rather is part of a larger strategy of enlarging opportunities. From the perspective of other family members, migrants are investments that often pay off handsomely through a prolonged stream of remittances and enhanced access for further migration. But parents know that for their children to stand a reasonable chance of accessing these family-enhanc-ing chances, they must stay in school and do well in it. At low levels of income, schooling is expensive. Roger Thurow gives a moving account of the choices facing a typical Kenyan mother as she decides day by day whether to use the food she has grown to feed her family
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or sell it so as to meet the school fees without which her children will be excluded. Not only is schooling expensive, but success
depends upon effort. 1 Most parents will be familiar with the routine
trial of encouraging and coercing children into trying harder, but the prospect of migration starkly raises the stakes.
The better the chance of migrating, the bigger the payoff to education and effort. So instead of having only a single effect of migration on the amount of talent available in the society, we now have two: a direct one that reduces talent and an indirect one that increases it. It might seem that the indirect effect could merely soften the adverse dir
ect one. After all, parents are only more strongly motivated to tap the latent talent of the children if they intend them to migrate. If children do migrate, there is no offsetting replenishment of talent. But the opportunity to migrate is limited by a variety of barriers. Many people will struggle up the educational ladder only to find that despite success at school their hopes of emigration are frustrated. Albeit reluctantly, they will augment the supply of talented people left behind. An analogy is the British savings-cum-gambling scheme known as Premium Bonds. The
bonds are secure assets that can be redeemed at par. While they are held, each month they attract the possibility of winning a lottery—
the Premium. The prospect of winning this lottery enhances the return on saving, and so many people purchase Premium Bonds.
An overwhelming majority of bondholders never win, but they
have nevertheless saved. So it is entirely possible that the pool of those lured into educational investment by the prospect of migration, but then not lucky enough to migrate, is sufficiently large that it more than offsets the direct loss of talent.
Within conventional economics, this effect of migration works through a probability: getting an education is like getting a lottery ticket to a better life. But there is also likely to be a different mechanism
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at work that does not depend upon probabilities: successful migrants become role models for others to emulate. Superficially, this may seem to amount to the same thing, but there is a deep analytic distinction that goes back to Keynes. He suggested that, confronted by unmanageable complexity, people fall back upon narratives that provide rules of thumb. The imitation of role models, which modern psychology now recognizes as a powerful influence on behavior, is just such an application of narratives: a role model is a set of rules for living. A successful migrant can have far-reaching influence, much as a celebrity footballer can have influence. Imitators are not calculating the odds—if they did so, they would usually be dismayed—they are lured by an idea of how to live.
The two mechanisms are not alternatives. Although economists
ended up rejecting Keynes’s analysis as a description of financial markets, as a description of how ordinary people take such deci-
sions both types of behavior surely coexist. 2 Although migration directly reduces the stock of talented people, indirectly it generates both an incentive and influential role model, augmenting the flow of new talent.
These subtle mechanisms by which the prospect of possible migration increases the flow of talent may be sufficient to counter the direct loss. However, the increased flow of talent works entirely by increasing the demand for education. A different mechanism is at work changing the supply. All governments spend money on education, usually by providing it through public schools and universities. The relative importance of public provision varies between countries, but in the poorest countries public provision is often dominant. Emigration changes the incentive of governments to spend on education. Most obviously, it reduces the social benefits of education and so weakens the case for public subsidy. Offsetting this, governments benefit from the remittances generated by emigration. So potentially governments
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can think of public money spent on education as an investment in future remittances. Nevertheless, the studies that have tried to measure government responses have found that usually education budgets are reduced.
The overall impact of migration on the supply of talent is a combination of the direct loss, the increased demand of parents for the education of their children, and the reduced willingness of government to pay for it. However, the initial effect is always adverse: the stock is first depleted, even if it then recovers. Economists have been
able to measure these effects: they are no longer just cute theories. 3
The estimates vary country by country: there are winners and losers.
The crucial discovery is that if the initial exodus is large, then it cannot be recovered. A large exodus builds a large diaspora and that gears up migration—as discussed in part 2. Most of the countries that remain very poor are small, and this matters for their rate of emigration: small countries have proportionately much higher emigration rates than large countries. So unless there are strong additional effects to the contrary, large countries will tend to be net
gainers and small countries net losers. 4 Further, an early exodus of the skilled feeds back not just onto the wages of those left behind, but onto the capacity of the economy to innovate and adapt new technologies. The poorest countries need to catch up, but emigration drains them of the very people who would enable them to do so. 5
To take an extreme, Haiti, with a population of around 10 million, has lost around 85 percent of its educated people. Such high emigration of the talented is not surprising: within Haiti the burden of history and prolonged misgovernance have left a legacy of shriv-eled opportunities, whereas it is offshore from the largest pool of employment opportunities on earth. In turn, the massive Haitian diaspora in North America makes migration both a natural and a realistic aspiration. In order to offset the loss of 85 percent of its
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talented people, the prospect of migration would need to augment the supply of talented people by around sevenfold. The actual response is much smaller than this, and so emigration indeed drains Haiti of its talent. As of 2000, which is the most recent year for all the empirical work on these effects, Haiti is estimated to have been one of the biggest overall losers: it has around 130,000 fewer educated workers than it would have had without emigration. President Clinton, who has worked passionately for Haiti over many years and especially since the earthquake, has this word-perfect. He describes America as having been blessed by mass immigration
from Haiti, but at the same time laments that Haiti has lost too much of its talent. He wants to see an expansion of higher education in Haiti, both to compensate for the loss and to produce educated young people who are more inclined to stay, being less
equipped with portable qualifications.
Almost all the small, poor countries have ended up as losers from migration. A sophisticated new study identifies twenty-two such countries in which the self-interested decisions of emigrants are
inflicting overall losses on the society. 6 In effect, these countries
would benefit from emigration controls, but of course these are neither practicable nor ethical. Many of these countries are in Africa.
Those that, like Haiti, have been stagnant for decades have, unsurprisingly, lost talent: Liberia, Sierra Leone, Malawi, Zimbabwe, Zambia, Guinea-Bissau, Mozambique, Afghanistan, and Laos read like a roll call of the bottom billion. But more troubling, even the more successful small developing countries have suffered net losses: Ghana, Uganda, Vietnam, Mauritius, and Jamaica. Doing well is apparently not enough to retain talent: Jamaica is estimated to have had a net loss of 14 percent of its skilled labor. In contrast, the few really big developing countries—China, India, Brazil, Indonesia, Bangladesh, and Egypt—enjoy an overall increase in talent. The prospect of
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emigration induces more investment in education, while relatively few people actually leave. The beneficial effect on the large countries is proportionately much smaller than the adverse effect on the small, but the large dominate: their modest gains more than outweigh the serious losses of the small.
A further way in which the supply of talent can be increased by emigration is through return: some emigrants come back home to work. One stream of returning migrants will be those who have not done as well as they had hoped. After a phase in work, they find themselves unemployed and go back. In the process of working, even these unsuccessful migrants gain experience and skills.
They may not be up to the standards required for success in a high-productivity economy, but they may, nevertheless, be productive by local standards in their countries of origin. An
other stream of returning migrants has been educated while abroad. The most important such flow of students has been the Chinese: China’s rapid absorption of Western technology has been substantially accelerated by the knowledge acquired by its students trained in the West. But the size of this flow depends not just upon how many young people leave from countries of origin for their education, but how many come back. China has benefited so much from migration because a high proportion of its students choose to return. But the needier the country of origin, the less likely that students will want to go back. The spectacular growth of China has made its students abroad confident that in returning home they are not damaging their prospects: they are rejoining the fastest-growing economy on earth. Until very recently, Africans have been far less willing to return, because prospects have been so poor relative to those in the advanced economies. It is indeed hard for the poorest societies to compete with the advanced societies as attractive living places for their talented students abroad. Even if salaries are
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bid up to competitive levels, implying horrendously wide wage differentials within the society, there is an acute lack of both public goods and many private goods that high-income people learn
to enjoy. Nevertheless, many students do return: for example, the academics teaching at African universities mostly have degrees from Western universities; without them African universities
would have collapsed. Similarly vital, in presidential offices and ministries of finance key people have been educated abroad.