Targeted Foreign Aid and International Migration: Is Development Promotion an Effective Immigration Policy?

Immigration from poor countries continues to be one of the most salient concerns among voters and politicians in the United States and in countries of Western Europe. Faced with the failure of traditional immigration policies, scholars and policymakers in these high-income countries are increasingly turning towards foreign aid to reduce migrant inflows. This approach reflects the conventional wisdom that individuals in the Developing World migrate to countries of the Global North in an effort to escape poverty, underdevelopment, and other problems at home. Leaders representing high income countries believe that aid can improve the well-being of would-be migrants, thereby deterring them from uprooting their lives and migrating abroad. However, there remains little consensus as to whether foreign aid actually reduces migration, as only a few studies have tackled this subject and they have produced contradictory results. We suspect that this literature has failed to produce definitive findings due to its tendency to treat all aid the same way. Therefore, we examine the distinct effects of three types of aid on emigration patterns: governance aid, economic aid, and social aid. To do so, we analyze a panel of 101 low and middle income countries over a time series spanning 25 years (1985-2010). Our findings indicate that governance aid is accompanied by reductions in the emigration rates of developing countries, whereas other types of aid have no discernible relationship to emigration. These results suggest that some, but not all, types of foreign aid can act as an effective and development-friendly immigration policy.