Improving policy coherence

The governance of international migration should not only be based on migration policies, but also on other policies, such as agriculture, labour, trade and development (OECD, 2007a; UNDP, 2009). Policy coherence is indeed necessary to reach the objectives of regulation, integration and development, as analysed in this book. It concerns both the countries of destination and origin.

But one problem of immigration strategies is precisely the lack of coherence between policies. Even though the effects of trade and foreign aid on development are ambiguous (see Chapter 2), it may seem inconsistent to fight against immigration on the one hand while reducing development aid on the other. It does not make sense, either, to adopt policies linking migration and development while maintaining trade barriers. Trade protectionism, particularly in the agricultural and textile sectors, prevents developing countries from exploiting their comparative advantages and inserting themselves fairly into the global trade system (Cervantes-Godoy and Dewbre, 2010). It therefore contributes, at least indirectly, to the increase in South-North migration flows.

OECD countries need, therefore, to face the potential policy trade-offs by clearly defining their priorities. If the priority is to reduce labour inflow, then agricultural policies should aim at reducing subsidies so that developing countries may increase their competitiveness. Not only would such a policy generate employment in the rural areas of developing countries,5 but it would also decrease the demand for low-skilled foreign labour in OECD countries.

But if border controls only represent a second-best option for other domestic priorities, such as saving jobs and preserving social cohesion, then policy makers should focus on these objectives through optimal policy intervention (Bhagwati, 1971). For instance, the best way to help low-skilled workers face international competition, induced either by international trade or labour mobility, is to invest in human capital instead of trying to protect the economy with trade or migration barriers. Likewise, immigration in itself does not represent a threat to social cohesion. It is rather the lack of specific housing, education and social measures to promote integration that makes it a problem.

Migrant-sending countries also need to take into account the interactions between migration policies and other economic and social areas. As seen in Chapter 4, the lost-labour effect induced by emigration is the result of missing or incomplete labour markets, especially in rural areas. Labour reforms should therefore encourage internal mobility, at both the geographical and sectoral levels. In the same way, policies aiming at increasing financial democracy help increase the benefits of remittances.

However, even though emigration may help foster development in the home country, it is not a foolproof strategy. The potential shortcomings of a strategy based on leveraging migration for development can be harmful and need to be taken into account. For instance, remittance-receiving economies may suffer from a "Dutch disease"-like problem, with increasing levels of dependency only satisfied through a permanent outflow of workers. When emigrants stop transferring money, the community of origin becomes vulnerable and the development model crumbles (see Box 4.3 for a recent illustration of this phenomenon).

In addition, migration-related policies usually focus on economic development, much to the detriment of the social dimension. Policies often emphasise the channelling of remittances towards productive investment and the return of high-skilled workers. But migration also comes with a social cost, such as the negative effects on those left behind, namely the young and the elderly, and can thus give rise to family disintegration (see Box 4.2).

Sending countries also risk failing into poverty traps. As long as emigration contributes to reducing demographic pressure and remittances feed the economy, governments have little incentive to undertake reforms. By helping partially solve unemployment problems, labour outflows undermine efforts to reform the labour market. As remittances provide informal social protection insurance, emigration countries also have less incentive to create a welfare state. Some countries may even want to encourage people to leave in order to reduce tension at home.

By contrast, successful countries have all carried out profound economic and social reforms. The achievements of such countries as Ireland, Spain or South Korea cannot be specifically attributed to the emigration process they experienced in the past, but rather to structural reforms. These countries, which used to export manpower, have become net receivers - or were until the recent crisis. This does not mean that emigration cannot help spur development, but the policy challenge here precisely consists in turning migration into sustainable development.

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