Does overseas aid reduce migration? It’s complicated

A growing panic about unauthorized migration from lower-income countries has led governments in the United States and Europe to pledge billions in development aid aimed at reducing the number of arrivals, but is that ethical? And can it work? A new study billed as the first “comprehensive causal analysis” of such spending concludes that the move can both succeed and be legitimate — but only if high-income nations distinguish between the type of migration they want to stop and that which should be “welcomed.” The policy brief, “Does Foreign Aid Reduce Migration?” published by the Kiel Institute for the World Economy in Germany, also dismisses fears of a “brain drain” in countries in the global south, arguing that the resulting migration can be a “highly effective development policy” for them and a “win-win” arrangement for all concerned. But the study warned leaders of donor countries that voters will “punish” them for exaggerating the cuts in migration that can be achieved. The research also concludes aid spending does not cut refugee flows from the most “fragile” countries of sub-Saharan Africa. Devex discussed the findings with one of the study’s authors, Tobias Heidland, an economics professor and director of the international development research center at the Kiel Institute, whose work has focused on the effects of development on migration and capital flows, particularly from Africa. Heidland said the research’s key distinction, not made in other studies, is between “irregular” migration, which high-income nations can succeed in reducing, and “regular” migration permitted by visas — which will go up. “What we show in our paper is that, while there is a short and medium-term decrease in migration [from aid spending], in the longer term there is a small improvement in incomes, which makes people potentially more mobile,” he told Devex. “So it would be dishonest to sell this as a policy which purely decreases migration aspirations. But allowing people to come as regular migrants is a much more humane way of thinking about these policies.” Previous studies have dismissed politicians’ claims that their hefty aid announcements will “reduce the pressure for mass migration to Europe” or “address the root causes” of why people move. But the Kiel Institute team says its research is the first to “disentangle” the impacts on the different forms of migration, studying “actual patterns” and both the aspirations and capabilities of would-be migrants from their individual testimonies. The study used the Gallup World Poll survey asking almost 1 million people in 106 countries if they wished to “move permanently to another country,” set alongside all World Bank development spending over an 11-year period from 2008 to 2019. The results identified a “substantial short‐run effect” from the announcement of a local aid project, cutting the numbers wishing to migrate by 8%. “In a nutshell, aid projects can give people hope,” the study states. But did this hope translate into actual falls in migration? Yes, the research says, finding that the spending of about $130 million per year in a given country led to a 7.8% annual decline in refugee numbers for two years before the effect “vanishes.” Crucially, even if aid successfully raises living standards, thus increasing people’s ability to move, the study found that it does not lead to more asylum seekers from Latin America, the Middle East, or North Africa, although it does from sub‐Saharan Africa. Instead, it argues that “starting between two and three years after project funds get disbursed, we find an increase in regular migration flows,” an average rise of 6.5% from $130 million of spending. According to the Kiel Institute team, over the longer term, foreign aid boosts the number of workers, students, and family members seeking and obtaining visas to move to higher-income countries. “People become more mobile, but in a form that is welcomed and easy to regulate,” the study states, calling it an “unintended effect of the root causes strategy.” Heidland dismisses fears of a brain drain because much migration is temporary, earnings sent back to countries of origin are “a huge boon,” and because of a gradual shift to training workers before they migrate, “as the U.S. does in the Philippines.” “The way to address this concern is to spend aid money to train people in their country of origin before they migrate to fill labor market gaps. That way you avoid the problem of a brain drain — it creates a win-win,” he says. “Very patchy data” makes it hard to determine how much high-income nations are — often quietly — loosening restrictions on legal migration, Heidland adds. But he says Germany and the United Kingdom certainly are, while the United States is “a bit.” In a strikingly optimistic conclusion, the study argues “aid and migration can be combined effectively to improve the longer‐term development of origin countries such that root causes of irregular movement vanish over time.” Heidland points to South Africa, Botswana, and Mauritius as examples of countries that have “pulled it off,” while conceding: “It is a long-run thing before a country like Chad or Niger achieves it.”