Is Migration Good For Development_columbia

Is Migration Good for Development? How Could You Even Ask? Lant Pritchett Harvard Kennedy School Presentation at Columbia University Feb. 13, 2009

Is Migration Good for Development? • Ideas and their evolution: Marx and Foucault • Spatial Based versus People Based thinking— why does dirt matter in theories of justice? • The movement of people leads to development gains orders of magnitude larger than anything else on the agenda • For some places mobility may be the only development agenda • Ideas and their evolution: Crazy, Crazy, Crazy, Obvious

The world that was lost in 1914 He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could dispatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. JM Keynes

Second Globalization as Farce Hegel remarks somewhere that all great worldhistoric facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce. …Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living. Karl Marx, remarks somewhere

Deconstruction, the most powerful idea of your time… • There is no “reason” or “discourse” or “truth” there is just power • Power socially constructs reality such that the agenda is deeply controlled without explicit repressions—its “common sense” • “Deconstruction” is the subversion of the socially constructions of established discourse • So, where do we look for overwhelming power? Not to controversy but for silence…what opposes the truly powerful is not controversial but just plain crazy

…has yet to tackle nationalism the most powerful idea of my time… • God is dead • All “..isms” are mortally wounded (e.g. racism, sexism, sexualism) • “Truth” and “Reason” have retreated into scare quotes And the “imagined communities” that are “nations” are all that is left

25000 20000 15000

In home

10000

In USA

5000

te m ala

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ad e

sh

sia Ba ng l

on e In d

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na

0 Ha iti

Annual eanrings (in PPP)

Estimated wage gains to low skill workers of crossing the US border—on average (from 42 countries), conservatively, P$10,000

Wages of “same” workers $10,000 to $15,000 (in PPP) By crossing the border

Place based versus People based thinking • A person moves from Peru to the US, his/her income increases by $10,000. • Suppose no one else is affected. • Assume they make above average wages in Peru and below average wages in the USA. • The traditional, “national” place based measures (e.g. GDP per capita, average wages) of “development” go down in both places

• If person moves from rural to urban the wage gain counts, of the person moves from state to state the wage gain counts— the natural global measure of development has to count the movers somewhere.

Income per person (resident or natural)

Output per natural (or wages per natural or poverty per natural) is the more natural way to think Guyanese 9000 8000 Jamaicans 7000 6000 Guyana 5000 Jamaica 4000 3000 2000 1000 0

ita u ral ita p ita p ita t... p p t a a a a a a c c c c n n r r r er per per pe pe pe p P P DP e DP e D D m m G G G o o c --- -G a -c l i n y a i n i z aic yan gua ica- Bra na -m Gu ra a a ya Ja P Jam u G

Labor Mobility is bigger than anything else on the agenda 14000.0 12000.0 10000.0 PPP $

8000.0 6000.0 4000.0 2000.0 0.0 Annual gain, Monthly gain, Net present Annual gain, micro-credit migration Value, lifetime migration of micro-credit

• The gain from a lifetime of microcredit is the same as 8 weeks working in the USA • Total annual gain to Grameen Bank borrowers (around) $30 million • If I get 3,000 Bangladeshi workers into the US, do I get a Nobel Peace Prize?

Debt Relief… •

Total foregone payments due to HIPC debt relief in Africa— about 2.5 billion (in 2005)

•

About 150,000 Africans to the US--.1 percent of the labor force, about 1 percent of monthly gross job growth, about one (good) months net job growth

•

If a labor mobility activist accomplishes that do they get to sing at the Super Bowl?

[Picture of Bono here]

From the top of the cliff at the borders that faces labor you cannot see the gains from goods or capital Welfare gains, in billions $

70000

65000

60000 50000 40000 30000 20000 10000 0

65

109

Complete liberalization Complete equalizatoin Complete liberalization labor mobility MPK of goods markets, to developing countries

Stand the question on its head… Not “Is Migration Good for Development?” but, since labor mobility is so good for proper, people based, measures of development why is there so much talk about things that have gains that are so much smaller? (Hint: It has something to do with power)

But it is worse… • The myth of the current international system, the world created to “win the peace” after WWII—the “Pax Americana” is: – The world can be divided up spatially into arbitrary bits – Each of those bits can achieve an adequate standard of living

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Contiguous regions of the USA are a third their counter-factual size Region of the United States (contiguous counties)

% change in populatio n 19301990

Ratio of current population to counter factual at rate of natural increase

Number of countries (of 192) with smaller area (with examples)

Ratio of area per capita income to national average

Texlahoma

-36.8%

0.31 117/192 (Nicaragua, Bangladesh)

92.2%

Heartland

-34.0%

0.33 117/192

85.2%

Deep South

-27.9%

0.36 96/192 (Jordan, Austria, Sri Lanka)

62.6%

There is no theory or evidence to rule out the possibility of Ghost countries • Persistent negative shocks to labor demand--the “supportable population” at any level of population • If labor is mobile you get “ghosts”— declining populations (e.g. rural midwest) • If labor is not mobile you get “zombies”— populations trapped in a spiral of declining wages (e.g. Zambia?)

Back to ideas • Pax Romana—spatial integration (or sorts) • Pax Britannica—full globalization (of sorts)—labor, capital, goods • Pax Americana—just goods and capital

“Globalization” of the Pax Romana— Not a single Roman emperor after 100 A.D. was born in Italy

Weekly food for a family in Bargteheide, Germany, $525 per person/month

Source: Hungry Planet

Weekly food for a family in Tingo Ecuador, $14.72 per person per month

Source: Hungry Planet

Food for a family in Chad, 86 cents per person per month

Source: Hungry Planet

Shift in ideas, silly, controversial, progressive, then obvious 90 80

33% increase in approval over 4 years

70 60 50 40

Percentage of Population Approving

30 20 10

1963 MLK assassinated MLK’s March on Washington

1992 LA riots spurred by tape of Rodney King beating

(S 7

(Ju

ne

)

ep t)

Year

20 0

20 0

7

20 04

03 20

20 02

19 97

19 91 19 94

19 83

19 78

19 72

19 68

0

19 58

Percentage of Population

Attitudes towards Interracial Marriage in the US

Barack Obama runs for President of the United States

Crazy, crazy, crazy…hero