Joseph Wright is a professor of political science at Pennsylvania State University. Abel Escribà-Folch is an associate professor of political science at Universitat Pompeu Fabra. They cowrote the book Migration and Democracy: How Remittances Undermine Dictatorships along with Covadonga Meseguer.
This is money that flows between individuals and families and largely circumvents governments and that’s a hugely important point, because the real take home of the book is that when these financial flows are controlled by citizens, it tips the balance of power in favor of citizens. When the international financial flow goes to governments, it tips the balance of power in terms of governments.
- How Remittances Break Clientelistic Relationships
- The Size and Importance of Remittances in Developing Economies
- Why Financial Remittances Facilitate Protest Movements
- Can Remittances Really Contribute to Democratization
- Implications for Immigration Policies
Today’s conversation focuses on migration. But unlike most conversations about it, we focuse on the country of origin, the country migrants leave. A new book called, Migration and Democracy: How Remittances Undermine Dictatorships, makes an unexpected argument: Migration fosters the conditions for democratization through financial remittances. Remittances are transfers of money from migrants to their families and communities back home.
This book challenges the assumptions of most scholars on this topic. For example, a recent article in the Journal of Democracy said, “Migration generates a flow of remittances, which improves the quality of life for those who stay home and prevents popular grievances from growing into a reason for mass uprising.” Think about that for a moment. The argument makes sense. People who leave a country should have little influence on their country back home. The country that they left. But today’s guests, Joe Wright and Abel Escribà-Folch, argue the exact opposite.
Joe Wright is a professor of political science at Pennsylvania State University. Abel Escribà-Folch is an associate professor of political science at Universitat Pompeu Fabra. They cowrote the book Migration and Democracy along with Covadonga Meseguer.
Now long-time listeners will notice parallels or connections to some past episodes. You might even recognize names mentioned like Bryn Rosenfeld or Nic Cheeseman and Gabrielle Lynch. Hopefully, some of the ideas we discuss begin to fit together even when the guests make very different arguments. At the same time, I don’t want to discourage any new listeners. This is a nuanced and original idea, but it’s not a complex one. I think anyone who takes the time to listen closely will be able to follow the argument and ideas here. Although you might find, it raises new questions you want to know more about.
Now before we start I want to thank another listener who reviewed Democracy Paradox on Apple podcasts. Here is my favorite part, “The podcast engages some of the leading academics and thinkers on the subject, and then goes further by posing and prodding tough but fair questions that make the authors go deeper on their work.” Thank you to BiDes19 for the thoughtful review. This is definitely what I hope to achieve in every episode. So, here is my conversation with Joe Wright and Abel Escribà-Folch…
Joe Wright and Abel Escribà-Folch, welcome to the Democracy Paradox.
Thanks. It’s great to be here.
Thank you for having us.
Your book really challenges a natural assumption that many scholars make. When they think about authoritarianism, the fact that it’s not as simple as just authoritarianism and democracy necessarily. That you’ve got a real interaction between economics and politics that exists within these authoritarian regimes. And I think it starts with the concept of clientelism. I think that’s really key to your work in the book. You write, “Poverty breeds clientelism.” Can you take a second and just help us understand what these regimes are like? What exactly is a clientelistic regime and how is it that it entrenches authoritarian leaders into power?
Yeah. So that’s a great question. You know, we typically think of clientelism as the government or some group that has power and resources to effectively pay people for their support. And then the question hinges on, ‘Well, how do you observe that support?’ Well, it could be simply the absence of protests. In a place like China social stability is important according to the Communist Party and what they mean by that is the absence of protest. It could be a high turnout in an election in which the vast majority of people are either too scared or are being paid to vote for the ruling party.
And so, in a lot of the cases that we look at, particularly when the regime is holding national level elections, clientelism works to help support the dictatorships and the ruling parties in that election. Local brokers are the ones that receive the payments and are supposed to then harvest or collect the supporting votes. And that could be as simple as turnout, you know, there are lots and lots of elections in which the government aims to sort of boost turnout in its strongholds or areas of support or maybe simply just boost turnout in the places where it’s highly contested. In fact, if you really want to sort of get the most out of your money and you’re trying to pay for votes, you’d go to the districts that are highly contested.
And so, what remittances can do is they can say, ‘Hey, you know, what, if they’re going to respond to the economic overtures of the government, the government’s going have to pay them more money.’ If they’ve got this external resource where they may decide that I’m not going to stump for the government anymore, I may not turn out to vote. I may not turn out for the pro-government protest if that’s what they’re paying me to do, if I have this external resource that isn’t linked to the government.
Now last year I actually spoke with Nick Cheeesman and Gabriel Lynch and they had a great book called The Moral Economy of Elections in Africa. And what was interesting was the idea that clientelism is much more subtle and complex sometimes than just a mere quid pro quo for a vote. Oftentimes, people are expecting the government to be able to react to their needs and so, sometimes buying votes is buying resources for the community. Sometimes it involves lots of things that maybe the people who are receiving the benefits of clientelism may not even see it as vote buying. But at the same time, the government’s doing it close to the time of elections with the expectation that you’re supposed to support the incumbent, party.
Can you help explain this idea of clientelism? It seems like it’s baked in so much closer into the way that the economy works in these countries. It’s not just simply that the dictator comes through with a bag of money and just hands it out and says, now you’re going to vote for me. I mean, sometimes it is, but it seems like it’s more complex than just that. Am I understanding that right?
Yeah, I think so. The incumbent party can monopolize and politicize the resources in a way that benefits them. And that includes as you were mentioning Justin, very correctly, not only the distribution of certain individual goods, like private goods that only some people or individual people enjoy, as well as distribution of local public goods that benefit the specific communities like infrastructure, schools, hospitals that are clearly targeted at actually keeping these people happier and in support of the regime.
And so where the remittances can come in there is that if they are actually helping to fund local infrastructure projects that are done independently of the government that is groups of individuals formed together to finance local public goods provision separate from the government. That, one, breaks that clientelistic tie, because they’re getting that good from elsewhere. But it also demonstrates to them how they can mobilize together independently of the regime. So, it has these two knock-on effects. One is a direct sort of competition with the government provided local good. And the second is it can actually be a way that people learn. They learn how to mobilize and that is the kind of resource, sort of the informal resource if you will, that can underpin a political mobilization for political opponents as well.
There’s also another complexity to clientelism that we analyze in the book. Clientelism is oftentimes associated with vote buying which is normally associated with someone who was thinking of voting for the opposition, after you receive this benefit then you change your vote completely, the direction of the vote. We’re thinking of going to vote for the rival party and then you’re convinced through this material inducement to vote for the regime party which actually doesn’t make much rational sense, because it’s quite expensive to make someone change completely their political position. The larger ideological distance or the political preferences makes buying that vote more expensive. So, what we actually suggest is that the most common is strategy that goes on in this regime is turnout buying.
So, essentially you target those people that you think are going to be supporting you. Then you use material inducement from private to public goods to make people show up in the election, so you can increase turnout. And by actually taking mild supporters to some extent, loyalist to the regime, that you’re going to be increasing the support for the regime. So, that’s very important in terms of the empirical implications that our study has. Because weakening of the clientelistic relationship that Joe was mentioning actually happens at the turnout level.
So, I think it’s going to be important here when we talk about remittances. I think a lot of people that listen to the podcast are going to have heard the term, but I just want to make sure that we’ve got it out in the open. Can you just kind of explain what exactly economic remittances are and how important they are for a lot of the countries in the developing world?
So, we talk about remittances in our book, we’re concentrating mostly on money. That is financial remittances. And when people migrate, they leave their country, that’s what we mean by migration. And they go to another country and they almost always work. Now, there’s going to be some cases where they don’t because the government in the host country does not allow them to work. But even in those cases, sometimes they work informally. The point is they have money. And again, in almost all cases, they’re going to be earning a higher wage in the destination country. This can be a higher wage there than in the country they came from.
So, there’s that wage gap and that’s a big motivation for migrating in the first place irrespective of whether that’s climate migration, just straight up labor migration or fleeing political violence or some sort of refugees. You know, in the United States we’re in the process of resettling Afghan refugees. When they get their jobs in United States, they’re actually going to make more money in the US than they did in Afghanistan, even if they worked for NGOs or the US government in Afghanistan. The way gaps are just that large. So, they make more money. And that’s the money that gets sent back across the border to the destination country.
In fact, oftentimes families when they make a migration decision, some members of the family gather resources within the family to send one or more of the members of the family to migrate with the explicit sort of informal contract, if you will, to send some money back. Take some resources to migrate in the first place, but in return for those resources, these people will send the money back. And so, there’s just a ton of money there. And when we narrowed down just specifically to dictatorships, it’s actually becoming probably the largest flow of international finance across borders, larger than foreign aid from say OECD countries to the global south, larger than foreign investment in Africa and if you exclude China and the massive inflow of FDI into China, exclude that, then remittances outweigh foreign direct investment in the rest of the dictatorships in the global south.
It even is starting to rival the amount of money that flows into dictatorships via oil revenue. And further oil revenue tends to be highly concentrated in just a handful of dictatorships most often found in the Gulf and a few other places. And so, remittances in sort of your typical or modal autocracy that isn’t highly oil dependent, that isn’t China, your modal autocracy in the global south, the largest source of international financial flows are coming from migrant remittances. Okay. So, it’s big. That’s the first thing to know. The second point about migrant remittances that I think often gets lost in the literature on international financial flows is that this is money that flows between individuals and families and largely circumvents governments.
And that’s a hugely important point because the real take home of the book is that when these financial flows are controlled by citizens, it tips the balance of power in favor of citizens. When the international financial flow goes to governments, it tips the balance of power in terms of governments. And take something like foreign aid. Foreign aid historically, particularly economic and military assistance, flows almost exclusively to governments. Now, there’s going to be some highly corrupt governments where foreign aid will go to NGOs. And increasingly even democracy assistance is flowing through actual governments and so, governments control the vast majority of foreign aid that flows into their coffers. Most autocracies that are highly oil dependent, the government controls those oil resources because it’s state-owned oil and even foreign direct investment governments tend to control a good chunk of that or at least their political allies do.
So, when we think about remittances though it’s hard to imagine for most of us to think of those being so large, because we don’t think of immigrants as usually making a lot of money. A common trope is that migrants or immigrants do the jobs that people in the host country don’t want to do. Now, obviously there’s a lot of highly skilled workers that come in and work as doctors and other types of professionals. But what I’d like to ask is, these remittances that are coming back, are they coming back solely from these highly skilled workers or are unskilled workers also contributing substantially to this flow of remittances?
Yeah, that’s a good, point. And there’s no actual like definitive answer on that question in large part, because it’s just hard to track the remittances. What we do know is that the vast majority of migrants who work in other countries are low skilled or have low skilled jobs in the host country, which would imply that the vast majority of money going back is from low-skill wage earnings in the host country. And certainly, there is some high skill migration here. I can think of like high skill migration from India, for example, to the US as a good example of that. But that’s generally not the kind of thing that we’re talking about here.
We’re talking about low skill migration from, it could be countries in Latin America to the United States, it could be folks leaving Sub-Saharan African countries and going to either the Middle East, if you’re from the Horn of Africa or to Europe.
And when you’re talking about a family working together to send somebody to the United States, let’s say to send money back, I just imagine that those are less skilled migrants or people that are going to have a harder time, even if they have a college degree, they might be underemployed, essentially when they first start working. Yet at the same time, it sounds like they’re still sending back substantial flows of income back to their home countries. Is that right?
That’s right. And what’s interesting is, and here there is some pretty good macro evidence, is that when economies in Europe or the US are doing quite well then the wages of low skill workers can rise and they can earn more money. But as importantly, when the economy falls and wages fall and incomes fall in migrant sending countries, we see that migrants tend to send more money home.
And so, what they’re doing is a lot of times for families, it’s actually a cushion for domestic economic shocks. A phrase that’s sometimes used is they are counter cyclical and they tend to increase into the migrant sending countries in the Global South precisely when those economies are doing worse. So, that’s one sort of macro finding from when these things flow. And the second is it tends to flow more actually around elections. There’s some pretty good evidence for that and that suggests that there’s something political going on. In addition to this sort of counter cyclical economic flow.
The other thing is what the data show is that they’re extremely, extremely stable and resilient. So, even the massive shock caused by the pandemic that actually caused a lot of economic distress in many countries in the world actually didn’t manage to actually make remittances reduce substantially. And they have recovered extremely rapidly in that they increased by one point something percent last year. And this next year the expectation is that they’re going to be increasing again by seven point something percent, according to the World Bank estimates. So, that’s quite impressive. The effort that all these people are making in terms of, you know, spending part or using part of their salary to send it back to their families, relatives, friends, or loved ones.
So, in terms of the scale of this thing is about 280 something million people, I think 281 million people, living in countries different than the one that they were born which represents around 3% of the world’s population, which is pretty small. But they managed to send more than $580 billion in remittances which is massive. And they’re making this extra effort despite the economic difficulties that they may face in the country they have chosen to live in and making this foreign income extremely stable, not something like foreign investment which can fluctuate a lot depending on the interest of the multinational corporations and so on and so forth. So, that’s pretty impressive. And that’s the potential for change that they may have because of that size. And also because of what Joe reminded very correctly of the fact that it’s people sending money to people.
So, Abel, one of the things that I’ve read in the past about remittances is that it’s not simply people giving money to people just to get them by. I mean, there’s a lot of that where people who are impoverished or you’re receiving remittances and it’s allowing them to survive. They’re buying food and other things. But they’re also purchasing infrastructure for the town. They’re building things in these towns, things the government would normally do. Can you kind of give us some idea on what type of projects some of these remittances actually fund beyond simply allowing their family to have a little bit more cash? I mean, it’s actually doing more substantial things that a government might actually do as well.
Yeah, absolutely. And that’s a very important point that actually these remittances can substitute for the goods that normally governments are providing. Migrants have been pooling resources and sending these resources in order to fund larger projects at the community level which is extremely important. And these projects include a multitude of things from schools, from health services, as well as infrastructure and other investments in local businesses. So, there is a multitude of different kinds of investment that have this public good nature.
They’re helping the whole community, irrespective of whether they have people living abroad or not, which shows as well, the important commitment and these ties these migrants retain with the communities in their countries of origin. That they want to make a change. And this change goes beyond the change in the local economy of the communities, but also as we show in the book with very important political ramifications as well. So, yeah, remittances can be used for a variety of things. We can not only associate them with just consumption, receive that money and you survive. People are using them to start small businesses, to overcome credit constraints, invest in their children’s education and also the community level with some of these public goods which, you know, the transformative impact that they might have is extremely important. They have been shown to reduce poverty quite consistently.
So, it’s a thought that I’ve got right now. And I don’t recall it being mentioned in the book, but I think it definitely buttresses your argument as a whole. The idea that if people are sending remittances that are building public goods or even just goods that are expected to be supplied by the government and they’re doing these as kind of a collective action, they’re learning how to be able to work together, to produce these goods on their own. It definitely undermines the authoritarian state because they’re effectively learning to work as a democratic community on their own, outside the bounds of this state.
So, I can understand how these economic remittances without, any political meaning behind it, let’s say, can just on their own encourage democratization because people no longer think that they need a strong man leader to deliver those goods. They think that now that they can do those on their own. Is this something that we see time and time again, Joe?
Yeah. There are certainly some case studies to suggest that the provision of local economic goods or local public goods that Abel was outlining have positive knock-on effects for local mobilization but that’s not the only thing we think that is going on. We think that when individuals have more resources that increases their ability to contest politically against the dictatorship. And one might think that that oftentimes comes in the form of voting against the dictatorship. But we also find and think that this actually helps fuel political protests, particularly among political opponents in the remittance receiving countries. And one might think, for example, that when the community provides more local public goods that people become actually more apathetic towards the autocratic government.
However, if you sort of think about that mechanism that would suggest that deprivation or the sort of grievances that come from deprivation are what fuel protests. And while that may be sort of helpful that as you might want people who are mad at the ruling party or the government to be the foot soldiers of a protest mobilization. We now know that it takes more than just deprivation or some sort of grievance to mobilize large groups of people to do something and to act in concert. Ever since Mansour Olson’s early work on collective action, you know, scholars have understood that to mobilize lots of people, you need some resources. And in his framework, it’s providing sort of an exclusive benefit and those local public goods may actually be sort of the local exclusive benefit.
These people benefit from that, but you also need resources to pay for the basics of a protest which could be as simple as paying for sandwiches or pizzas for the people who are doing the protest or to pay for a technology that helps disseminate information. You know, way back in the day, it used to be distributing pieces of paper that signaled disapproval of the regime. Today it might be mobile phone subscriptions. But having the resources to disseminate information is important, you know, when people stop showing support for the regime, because they are no longer economically dependent on it that can actually send a signal that there’s lots of people disaffected with the regime.
And one of the reasons people don’t protest is they think that everybody else supports the regime. And if everybody else is showing public signs of supporting the regime, then I don’t want to mobilize a protest because I think it might not go anywhere. However, if because people are now no longer economically dependent on the state, they are no longer showing these public signs of support for the ruling party then it may actually be easier to galvanize a protest just through this information mechanism. And so, there’s a direct sort of fueling the capacity and the resources necessary for that for a mobilization. Then there’s also this informational mechanism and sort of to put a point on this, we find that people who were supporting, as Abel has mentioned before, nominal supporters of the regime, they don’t come out to vote as often.
And so, when we think about do remittances sort of increase mobilization or boost apathy it really matters who we’re talking about. If it’s nominal supporters, they might increase apathy, but if it’s nominal opponents, then it might actually increase mobilization. So that matters and that’s one of the innovations we think of our work is that we’re sort of disaggregating who’s sort of receiving these remittances by looking at the effect of remittances in different locations within remittance receiving countries. So, to put a point on it we find some evidence that remittances actually increase anti-government protests, but at the same time, and this is the apathy effect, they actually decrease pro-government protests. And that latter effect simply could be that I’ve got more income and I don’t need the government to pay me to protest anymore.
Most protests that governments can induce in their favor particularly around election time, people are paid in some form to go to those protests. And if I don’t need that money from the government, because I got remittances and I don’t show up for that protest and we think that’s the mechanism that underlines this sort of macro finding that remittances appear to be reducing the likelihood of pro-government protests.
So, one of the points you just made was that people have more resources so that they’re more willing to stand up to the government. And there’s a longstanding literature. I mean, we can go back to lots of different writers from Lipset to others who linked together the idea of economic growth to the idea of democratization. But what I think is remarkable in your book is that it’s not simply that people have more money. But it’s the source of where they derive those resources. For example, you mentioned China. Their investment comes from actual foreign direct investment from companies and people can kind of link some of that to the state. I imagine it’s impossible to do that if you know that the resources you have are literally coming from a relative.
Another writer who was making the same point about the importance of where income comes from is Bryn Rosenfeld, who wrote a book called The Autocratic Middle Class. It’s a very different argument. It’s talking about how people who rise into the middle class through state support are less likely to protest, but it makes the same type of idea. She writes in her book. It is not principally the relative income of the middle class, but its source that determines the demand for democracy. And you make the same point. It is the source that determines the demand for democracy, not just the idea that they’re now in the middle class or even just a step above poverty. It’s not just the resources. It’s where they got the resources. And I just found that absolutely remarkable.
Yeah, I was teaching Brin’s book this semester and found it eerily similar to the kinds of arguments that we were making. And I had the students read it shortly after they read a short excerpt from our book and they could certainly draw the similar parallels. Let me go one step further. I came across, I want to say it’s a book and also an article, on Chinese public opinion, you know, sort of different citizen’s views of democracy. What do they think of when they think of democracy?
And the key point here was that those who worked for the state in some capacity, their views of democracy were really about things like does it provide social stability and economic security. Does it provide the goods that we want for a good life? Whereas those that were not strongly economically connected to the state that were not dependent on the state for their jobs and incomes were more likely to say, ‘Hey, democracy is really about some sort of political freedoms.’
And so, that very much fits with this idea that Bryn is offering that the middle class that’s attached to the state is less likely to protest. Whereas the middle class that is not attached to the state, is independent, is more likely to protest. There is one other sort of parallel that we can draw here and sort of a contrast into the Chinese and the Russian cases. And that is there was a great book that was written a number of years ago on democratization in Sub-Saharan Africa looking at the 1990s and the idea goes like this. That international financial institutions sort of pushed a lot of economic reform which included privatization of state assets onto African dictatorships and these countries complied.
And what that did is it took a whole chunk of resources that were controlled by the state and put it in the hands of sort of private entrepreneurs who then use those resources to finance opposition parties that were cross-ethnic that were expensive basically to put together because they were cross ethnic and they had the resources to put together these multiethnic opposition parties that led to fierce political competition in the new era of multi-party elections in Sub-Saharan Africa in the 1990s. And so, here you have a big chunk of finance that went from control in the state to control outside the state and that financed political opposition.
So, it’s again, it’s a different story that we’re telling, but it has that same general feel that when finance leaves the hands of the state and a big chunk of money goes elsewhere, it can actually be helpful for opposition. And that’s what’s really interesting to me about the Russian case is of course when some of the entrepreneurs got loads of money, the Russian state actually confiscated that in the 2000s after Putin’s rise to power.
And in China, a lot of the initial entrepreneurs that sort of were instrumental in the early periods of vast economic growth in China in the 1990s and 2000s were co-opted into the party. So, they were made and given privileges within the party. Basically, tied them to the regime. Now you see things a little bit differently. Now the Chinese regime going after some oligarchs, if you will, but I really think that’s about who gets to control information that’s given to citizens and the government really still wants that. And they don’t want to go after any private citizens that might have control over social media groups that can shape the message that Chinese citizens receive. And I think the Chinese government wants to control that message.
So, the question on the back of everybody’s mind right now is going to be that if remittances are able to encourage protest, be able to give citizens an independent source of income that allows them to stand up to their rule. Why is it that they just don’t ban migration? Why is it that they just don’t seize the remittances that come in? Why is it that dictators can’t just stop the whole process in its tracks?
They might decide to do so after our book is published and they might learn something about it. So, just thinking about remittances as compared to these other flows is that they are pretty difficult to not only try to control, there are several governments that have tried to actually capture some of those resources. But the thing is that remittances are very difficult to control for governments, because there are many ways through which remittances can be sent and so now remittances can be sent almost instantly using a smartphone app and many other different ways. So, one way in which you can send the remittances is through these formal ways, but there are many different ways through which remittances can be sent as well informally.
So, if the government tries to tap into those resources, people are going to be finding alternative ways for making the money go into the pocket of their relatives or friends. Being so decentralized and with the new technologies of communication and information helping transfer of money from one country to another to make it easier, faster, and hopefully cheaper as well.
Well, there’s obviously a lot of FinTech that’s been coming of age that’s made it much easier and cheaper to be able to send remittances. And you can read about that almost every single week in The Economist these days. What is a simpler way to close the door on remittances would be simply for governments to ban migration from their country. To ban emigration the way that the Soviet Union did by just putting in an iron curtain around their country and say that you’re not allowed to go to a democracy. I get the impression the reason why they don’t do that is because such a large portion of their gross domestic product now is literally coming from these remittances. Am I understanding that right? That these governments effectively can’t close off emigration because they’re economically dependent upon it for capital flows these days. Is that right?
That’s one reason and the other is that they have to balance actually the cost of trying to prevent people from leaving as well as the consequence that on balance maybe it’s good for some people to leave. Kind of a political safety valve, sort of arguing that, you know, you have people that are potentially the dissenters or that are against the government living within your own borders. Why not let them go, right? So, you can kind of reduce the pressure, the internal pressure, against the regime in that way. So, that’s kind of the different things that governments might be balancing here, although I’m speculating a little bit in here.
Yeah, border control is hard. It’s one thing to try to keep people out. It’s another to try to keep people in. And you have to have some set of strong state that can do that and in a country where leaving the country entails sort of one exit point it would be easier to control than when there’s lots of exit points for humans. And there’s going to be consequences to that, if you’re actually trying to , have all the borders controlled, then there’s going to be consequences for trade too.
So, over the past 20 years we’ve seen not only migration increase, but when I looked over the data I saw that remittances have also grown dramatically. But this is also a period that we’ve seen democracy decline around the world. If I’m reading your theory at its most simplistic way, it would seem like a contradiction that remittances should just naturally lead to an expansion and growth of democracy around the world. Obviously, we’re not taking such a simplistic reading of your work. I’d like to hear from you though. Why hasn’t the growth of remittances contributed to a broad spread of democracy over the past 15-20 years?
Yeah, that’s a great question. And one that we’ve, thought quite a bit about ourselves. So, let me answer that question in two ways. The first is really this trend that we’re seeing, declining democracy, depends on where you look. Certainly, if you read pages of the Journal of Democracy, for example, but also when you look at the data, for example, from the Varieties of Democracy Institute you see that the decline is mostly happening in places that were democratic in the year 2000 and the Western media tends to focus on those democratic declines in democracies. You know, there’s an example in our book from Cambodia where there’s a very close election in part, we argue, because of the role of remittances. Where the opposition almost won and there were lots and lots of remittance financed mobilization against the ruling party.
So, it’s not just the ones that we observed as successful, but the near misses too. Those places tend to get a lot less attention in part, because they tend to be smaller countries in regions of the world that get less media focus, parts of Asia and Africa, for example. So, the second part of the answer is that it’s important to think through the mechanisms that we suggest underpin this relationship between migration and the increase in democracy that happens through remittances. We basically contend that one of the main mechanisms that remittances undermine dictatorship and promote democracy is that it reduces sort of the political influence of ruling parties and their ability to buy political support at election time.
So, earlier we talked about how autocratic governments might one day want to put a stop to migration to be able to prevent remittances and obviously there’s challenges to that. But one of the other stumbling blocks to encouraging these remittances to bring about democratization in many of these countries is actually Western governments. The immigration policies in the United States and Europe prevent many migrants from coming into our countries to being able to make better wages and send them home in ways that hopefully would actually create opportunities for democratization in their own countries.
I know that this isn’t a policy book. You’re writing about a phenomenon that exists. You’re not necessarily doing this to make a policy proposal, but it has obvious policy implications. So, I’d like to give you an opportunity to explain based on your research, how should Western governments approach their immigration policies going forward?
I’ll give you the short answer. And Joe will elaborate on that because he’s essentially wrote that section in the book. That section that I love by the way. Which is that the very minimum Western countries should put remittances in the balance in terms of evaluating the impacts of immigration which is normally something that they don’t do. They either take into account the impact, sometimes negative impacts, that they see that immigration may have in their own countries or they see migration as detrimental to the countries of origin in terms of, you know, it’s the highest skilled people leaving. So, they’re causing a kind of economic shock in there. So, you should consider remittances as part of this exchange of one that can alter the political dynamics in sending countries.
What I see as sort of these debates about immigration policy, so often, particularly in the media take the form of ‘Should we have more or less migration? Should we have open or closed migration?’ And we’re going to be debating that in EU countries and in the US for decades and decades and decades and it’s going to becoming an increasingly important debate for two reasons. One is climate change is going to increase the sort of push of migrants across borders to the global north. We’re going to see mass incentive for people to leave the global south countries in search of better opportunities in the global north simply because of the catastrophic effects of climate change. You know, in the US we started to see that in people are being pushed out of their livelihoods in Central America because of climate change. So, that’s a push factor.
The pull factor is that we’re going to see declining fertility rates in the global north. China has long since passed the point of replacement for native births. The US and almost the entire EU, I would imagine, are either at that point or well beyond that point. Spain and Italy, I think, are some of the lowest native fertility rates in the EU, if I remember the data correctly. And so, these countries are going to start to see population declines over the next couple of decades or the rate of growth is going to decline substantially and that’s going to increase the pull for migration. Larger point, this debate’s not going to end today. It’s not going to end tomorrow. It’s going to be going on for decades and decades as these two forces come together.
So, what can we say? We don’t have a prescription for more migration or less migration. That’s not really sort of the point. What we would want to do is sort of inform discussions about specific policy issues. And so, one that Abel highlighted is can migration actually be used as a tool for democracy promotion in the global south. The reasons to promote democracy in the global south both to help the people who live there, because democracy is associated with better economic and security outcomes. But also, to reduce the negative side effects of having authoritarian rule in the global south, everything from more nuclear investment by dictatorships to less international cooperation to more trade.
So, could it be used as a tool for democracy promotion? The way that I would answer that question is actually to highlight for listeners that in the past two decades, US taxpayers have stumped up a couple, maybe now it’s $3 trillion, to invade Iraq and Afghanistan and to control those territories. And other countries have contributed to that fiasco as well with their taxpayers paying for it. Would the US be willing to spend $3 trillion of taxpayer money to use migration to promote democracy? It wouldn’t have to. Right? It wouldn’t cost $3 trillion to increase migration to the extent that would be necessary to promote democracy in a lot of these countries. But I think that puts a point on it.
So, any questions about sort of the costs and benefits of migration with respect to democracy promotion need to be put in comparison with other tools that have been used by countries like the US government at the tune of $3 trillion, let’s say, for an absolute fiasco. So, that’s point number one. It should be put on the menu when thinking about democracy promotion. And the second is there’s debates that I think will have more or less resolution in the ensuing years. And this is about outsourcing border enforcement to other countries. So, we see this happening in the United States and Central America. We see European countries doing this in North Africa and our book has implications for two ways that outsourcing border enforcement sort of hurts democracy.
And the first way is governments are actually paying groups in third countries to do the enforcement. Those groups are either the government or government aligned militias and smuggling gangs. Not only are they pursuing mass human rights abuses against migrants. But it entrenches their power. It’s a direct transfer of income from taxpayers in the global north to autocratic players in the global south. Okay. So, we’re subsidizing dictatorship through third party border enforcement. And the final point for policymakers to think through carefully and this goes back to our central point and the themes we’ve alluded to and discussed already. Who controls the money? In the future, policymakers are going to have control and are going to be talking and discussing specific policies about who’s going to control the money.
Justin, you mentioned FinTech and Abel’s answer was that, you know, it’s just hard. And I agree that it is hard, but it could become increasingly easy for authoritarian governments to control the flow of remittances, if they control access and have surveillance access to the electronic payment platforms when remittances are transferred. And if authoritarian governments have access to that digital technology for remittance payments, then that can potentially undermine the entire story that we’re talking about here. So, that’s an important thing to bear in mind as international financial institutions, for example, help invest in financial payment systems that will help facilitate this.
So, the angle that most IFIs talk about this or policy makers at IFIs talk about remittance transfer is trying to reduce the cost of that transfer for remittance centers, so third parties that do the sending don’t actually get that much money from it. But the migrants themselves benefit more and that’s great. But one point to put on their plate is they have to think about the development of these financial payment systems going forward, so that migration increases and more money is going to flow. The question will remain who gets to control that money.
I have to say that I was so impressed with the book because I felt that it told an unconventional story that really disrupts a lot of the assumptions that we have about migration, about remittances, about democratization in general. Yet at the same time, as you tell that story, it makes so much intuitive sense. Once you put everything together, once you understand what that story is, it seems like there’s no other possible way for that to happen. And for immigration policy going forward, it’s oftentimes been people on the left who’ve championed migration as a form of humanitarianism.
But as you tell your story, as I’m thinking through it, it definitely sounds like a story of the power of markets to be able to facilitate democratization. And maybe that’s something that people on the right can begin to change in terms of how they think about immigration going forward. Because the amount of money that we’re talking about being transferred here dwarfs foreign aid. It’s not only larger. It’s more effective. And I think it completely changes how we think about democracy promotion and how we think about immigration going forward. So, thank you for telling that story and thank you for writing that book.
Thanks for having us. It’s great to tell the story.
Yeah, it’s been a pleasure. Absolutely.
Migration and Democracy: How Remittances Undermine Dictatorships by Abel Escribà-Folch, Joseph Wright, and Covadonga Meseguer
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