Friday, May 16, 2008

Questions I've Been Pondering (with Matt)...Immigration

Q: What would happen if the United States had a open-border policy on immigration? Pass a security check, register where you're going, and come on in. We continue citizenship constraints, so that it takes a long time to be eligible for government programs like welfare or to vote in elections, but other than that stay where you like as long as you like.

I think this would induce a massive push for economic and political reform around the world. Government power to exploit is derived from the immobility of its citizens. If the bridge club wants to impose an income tax on you, you can just quit the bridge club. If the federal government passes an income tax, it's comparatively harder for you to leave, especially if there no other countries accepting immigrants. (Hat Tip to Buchanan's Club Theory.)

Adopting this policy, I think there would be enormous pressure on other governments around the world to become "more like the U.S." with respect to political and economic freedoms in order to persuade the most skilled and beneficial citizens from leaving them for the U.S. This would be the most true for South and Central America, who have some existing institutions that can adopt change. Even if this did not happen and America just ended up with a much higher immigration rate, we would experience massive income growth as the number of brains in the economy increased. It probably would stimulate some favorable (though unpopular) institutional changes within the United States as well.

I think Matt didn't entirely agree, but I'll leave it to him to post in the comments. I anticipate some interesting comments on this one.


danarch said...

I guess I'll start. So, in theory I agree with you, however, I guess some of the drawbacks would be

1) Can the current infrastructure support the addition of all these new people and if not where is the incentive to invest, especially if we aren't allowing citizenship automatically? Would towns build more schools and roads to accomodate this influx?

2) Other first world countries may see less of a need to "share the burden" of caring for some of these immigrants who need to leave countries as refugees or what not. They may tighten their borders in response.

3) What would be the ratio of good to bad immigrants (less skilled to skilled, poorer, or however you want to define "good" or "bad").

4) Why not let them become citizens much faster to qualify for benefits? There are not many "benefits" to being a citizen other than voting and some government programs, anyway. Maybe that may lead to more people coming in for good instead of for just long enough to save up enough money to go home.

Matt E. Ryan said...

Quickly-- I think that in order for other world leaders to want to retain their high skilled workers, they'd want to be installing institutions that would further long term growth. I think they've proven that they desire to do just the opposite-- impose extractive institutions to take for themselves what they can while they can. Further, should the U.S. open its borders, then presumably those who would be most in favor of changing the institutions within their home country-- the high skilled individuals-- would be the first to emigrate. This would leave those who, while not totally in favor of the bad regime, would at least be more tolerant of it. (If they weren't because of foregone wages, again, they could head to the U.S.) I think this would entrench the existing poor leadership and solidify the bad institutions. So I think we'd see less reform of the poor areas of the world.

Not that I'm against immigration here; give the example, I think this would be the result.

Would love to see Chris Coyne's take on this, though I know he's out of Morgantown for the weekend as well.