A study showing the economic benefits of seasonal migration
Much obvious work on helping the poor may actually be beside the point. As good as supplying clean water and building schools is, giving people honest work tends to be the true way out of poverty. Give a man a fish, fishing rod etc. Thus, while the West makes a show of providing development assistance, the real steps it could take to help are actually much more simple. Cut agricultural subsidies for wealthy farmers and allow easier immigration from the developing world. Both of these options, however, are politically toxic whereas everyone generally likes giving out medicine and assorted largess. It may, however, be besides the point.
In Sri Lanka we import rice and one of the most popular local dishes is tinned fish curry. This is tinned as in from a can, as in from a container, as in from somewhere else. I eat this somewhat regularly and I live about 1 km from the sea. There is also a fish market at the top of my road, but the tinned fish is cheaper. That is somewhat off topic here, perhaps even detrimental to the topic. I digress. It’s just that I ate tinned fish today and I don’t really like it.
For all the talk of free trade, farmers in the west are still heavily subsidized. As Mark Malloch Brown, former head of the United Nations Development Program, says “It is the extraordinary distortion of global trade, where the West spends $360 billion a year on protecting its agriculture with a network of subsidies and tariffs that costs developing countries about US$50 billion in potential lost agricultural exports. Fifty billion dollars is the equivalent of today’s level of development assistance.”
In the US you see it in the weird promotion of food based ethanol as an energy source (something dumb), based largely on the fact that politicians need the support in grain belt areas like Iowa. If you take the subsidies away its a huge political hit without much local gain, but as the system is it produces huge market distortions. On one level, stuff like corn syrup becomes cheap and leads to bad cheap food that makes the west fatter. On the other level, farm subsidies essentially take away agricultural work from the developing world and replace it with aid which employs even more westerners.
It’s understandable, but still a bit bullshit. If western countries were serious about both poverty and free markets, they’d look at reducing agricultural subsidies. They generally don’t.
Humans have been immigrating literally since we walked out of Africa. Immigration is probably the basic mode of getting out of poverty, or hunger as it were. In the age of the nation state, however, immigration is viewed as something unnatural and illegal. Western countries let in migrants, but the phenomenon is often viewed as a negative thing. In a broader view, this is really just old migrants looking down on new ones, but migration does have societal effects on the good things about nation states.
Immigration, however, is the best way for people in the developing world to get out of poverty. It is a policy which every Sri Lankan understands. People smuggle on boats, overstay their visas or even pretend to be a non-existent handball team to get off the island and into a better life. And they generally do. And they send money home. Sri Lanka has something like a million people working abroad now, supporting countless people back home.
Now, a recent study in New Zealand has shown the striking effect of seasonal migration on Pacific Islanders (John Gibson, David McKenzie). As you can see from the graph above, the income gains dwarf microfinance and cash transfer. As the study puts it, “The vast wage differences across countries are a sizeable economic distortion, and offer the possibility of large gains through international migration”. In that way, development aid may be sowing unfertile soil. In my experience poor people generally ask for 1. a job or 2. a way to migrate. They may be right.
Development, especially development studies, tends to be populated by somewhat leftist types, in my experience. They approach it from a moral imperative, which is good, but it may not necessarily be efficient. Viewed from a pure results perspective, development is not about feeding starving children or building schools or saving lives. Those are the effects of development, but it’s not development in itself. Development is actually about, as the authors of the New Zealand study put it, evening out economic distortions. In that sense, the largest gains come not from clean water or education but from creating jobs and enabling migration when there aren’t jobs.
See, the world already has a reasonable system for lifting people out of poverty. The basic model is to simply move and the extended model is to move goods and services. That is, free movement and free trade. The emergence of the nation state as an economic and psychological entity has placed limits on that, but judicious lifting of those limits may have better results by ignoring the general economic distortions and airlifting specific solutions in. For western countries that would mean dropping agricultural subsidies that hamper free trade and loosening immigration restrictions that hamper free movement. Those moves, however, are basically too good to be true. People profit from those economic distortions, they are part of the voter base that nation states need to survive, and thus the developing world will continue to get more aid than development, at least for a while.