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Open borders: the solution to conflict in the Middle East

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Anne-Marie Slaughter, a respected US academic and former bureaucrat in the field of international studies, recently authored an interesting piece highlighting an unconventional 2-state solution for Israel and Palestine:

“Two-state condominialism” is as visionary as the name is clunky. The core idea is that Israelis and Palestinians would be citizens of two separate states and thus would identify with two separate political authorities. Palestine would be defined as a state of the Palestinian people, and Israel as a Jewish state. Under “condominialism,” however, both Palestinians and Jews “would be granted the right to settle anywhere within the territory of either of the two states, the two states thus forming a single, binational settlement community.”

…Palestinians “would have the right to settle anywhere within Israel just as Jews would have the right to settle anywhere within the territory of the Palestinian state. Regardless of which of the two states they lived in, all Palestinians would be citizens of the Palestinian state, all Jews citizens of Israel.” Each state would have the authority and the obligation to provide for the economic, cultural, religious, and welfare needs of its citizens living in the other state’s territory.

…

Condominialism recognizes the reality of the deep interconnectedness of Israeli settlers in the West Bank with the rest of Israel – through roads, water supplies, electricity grids, administrative structures, and economic relationships (just as Israeli and Palestinian parts of Jerusalem are interdependent). Instead of trying to separate and recreate all of these structures and relationships, it makes far more sense to build on them in ways that benefit both states’ peoples and economies. And, in a world in which many citizens spend an increasing proportion of their time in virtual space, de facto condominialism is already happening.

As ideas go, I’ve seen worse. I like this a lot. In fact, I like this enough to the point that I would like to know: what’s keeping the rest of the world from trying this out? In many parts of the world, the forms of “deep interconnectedness” Slaughter describes already exist in total defiance of arbitrary, human-defined borders. In fact, I am a bit surprised she almost seems to gloss over the human relationships and communities that constitute the most important interconnectedness here.

To take an example I’m familiar with, it matters little to a Malaysian living in East Malaysia on the island of Borneo where the technical border is. Not when he and his family have been living and moving across the land long before any international border sprung up separating Malaysia and Indonesia. Across the South China Sea in West Malaysia, Malaysians who live in the north are permitted to cross our border with Thailand without passports or visas, a governmental nod to our deep interconnectedness. Stories like these can be found across the world, including in the southern US, where people still recall how, before paranoia post-9/11 set in, communities divided by a border paid it no heed, their lives bonded together by social and economic ties that matter far more than arbitrary lines drawn on a map.

And to her credit, Slaughter closes by obliquely pointing to the relevance of open borders outside the Middle East:

In the 1950’s, after four decades of war across Europe, the idea of a European Union in which member states’ citizens could live and work freely across national borders while retaining their political allegiance and cultural identity seemed equally far-fetched. (Indeed, the name of the political process by which the EU was to be constructed, “neo-functionalism,” was every bit as abstract and cumbersome as “two-state condominialism.”) Yet French and German statesmen summoned the vision and the will to launch a bold experiment, one that has evolved into a single economy of 500 million people.

The EU has proven that on a fairly large scale, open borders work. (I am not too sure about the feasibility of a single currency, though.) To the extent that open borders in the EU have been detrimental, they have been addressable by keyhole solutions (such as transparent, clearly-defined temporary restrictions on immigrant flows to allow societal adjustment). And to the extent that they have been harmful in spite of keyhole solutions, it is absolutely clear that most, if not all, predictions of catastrophe have not come to pass.

Borders may be arbitrary, but we don’t need to abolish them to have open borders. Indeed, Slaughter says: “To make this work, the borders of each state would first have to be defined – presumably on the basis of the 1967 borders, with mutually agreed territorial swaps.” Borders define the area of a state’s sovereign jurisdiction. But they don’t define the human relationships that form the warp and weave of everyday life. Fundamental morality and economics agree: we need open borders.

Singapore: 29% of the labor force is foreign

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From Singapore’s Success: Engineering Economic Growth, by Henry Ghesquiere:

Like other countries, Singapore controls the income of foreign labor. Here, too, economic growth has benefited from openness. Augmenting the domestic labor supply is an integral part of the country’s overall development strategy.

Foreign manpower made a key contribution to Singapore’s economic growth. By 1970, full employment had been achieved and Singapore began to attract temporary foreign workers, then accounting for 3.2 percent of the labor force. Their number grew rapidly, reaching 7.4 percent of the workforce by 1980. By 2000, foreign workers made up an estimated 29 percent of Singapore’s labor force– 5 percent higher-skilled or professionals on an “employment pass” and 24 percent lower-skilled holders of a “work permit.” Expatriates filled half of the 600,000 new jobs that were created during the 1990s, with the other half filled by the domestic labor force. The upward trend has continued since.

Foreign workers now play a key role in Singapore’s economy. Low-income earners, mainly from the Philippines and Indonesia assist in households and with elderly care, while road and construction workers hail from all over South and East Asia. Professionals and highly skilled workers are being courted through an aggressive open-door policy to attract global talent. Foreigners on temporary work permits and employment passes are expected to leave at the expiry of their term, unless renewed. There are procedures to keep the lower skilled as a revolving pool on fixed employment terms to prevent them from establishing roots. Jail penalties await landlords and employers who house or employ illegal immigrants. Foreign labor and the Singaporean economy have become intertwined in mutual dependence.

In this area as well, Singapore relies on the price mechanism as a policy instrument to manage the total inflow and skill level of expatriate labor. Under the foreign work permit system, employers pay a levy to the government budget that differs according to the skill level of workers and sector of activity. Permits are renewable every two years. Levies are raised if demand from employers is strong. Levies are lower or nil for better-skilled workers. This differentiation has encouraged construction firms to invest in training their workers and to introduce labor-saving techniques. One consequence of improved skill levels is increased competition: during the downturn in 1998, some local employees were retrenched while stronger performing foreigners kept their jobs, unlike in 1985. Also, the inflow of one important category of less-skilled workers may have indirectly contributed to higher productivity. The increase in female labor force participation from 29 percent in 1970 to 53 percent in 1999 has provided more than 228,000 additional workers over the past three decades. This includes 130,000 maids, allowing many families to have a second income-earner. The government explains the beneficial impact of the foreign presence, even though such a policy has led to some concerns among Singaporeans about future job prospects and more intense competition for housing.

Of course, I don’t approve of all of this. In particular, to jail landlords and employers who house or employ illegal immigrants is a  violation of human rights. That said, it may be more tenable for a city to adopt such measures– jail is indefensible, but fines might be tolerable– than for a country to do so, since congestion and local externalities perhaps give people a more legitimate stake in their immediate physical neighbors than any citizen of a large territorial state has in anyone’s residence, or not, somewhere in the territory, including perhaps in wild and uninhabited parts of it.

Most impressive is the statistic: 29% of the labor force is foreign (as of, I think, 2007). This share is a little less than twice as high as the 16.6% in the US. To get to the Singaporean level, the US would need to let in about 30 million more immigrants. Singapore is wealth worth emulating, considering that Singapore is about 20% richer than the United States (per capita). Moreover, Singapore seems to be maintaining rapid rates of GDP growth even since they’ve overtaken the United States and supposedly should be bumping up against the “economic frontier.”

UPDATE: By the way, the idea that foreign nannies and maids could free high-skilled women from housework and childcare and facilitate their entry into the labor force is particularly interesting. The feminist case for open borders?

Nonexcludable but rival goods

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There seems to be a widespread sense that while immigration can benefit immigrants, it hurts natives because immigrants grab a share of the pie. This argument is invalid as regards private goods and public goods, but it may be valid for nonexcludable but rival goods.

Economists distinguish private goods from public goods by two criteria: (a) rivalry, and (b) excludability. Private goods are rival and excludable. Public goods are nonrival and nonexcludable. At least, that’s what economists do when they’re being rigorous. There’s a frustrating tendency to stretch the concept of a public good from the narrow niche in which it is most proper and to which the theory of public goods– for example, the idea that you sum demand curves for private goods horizontally and demand curves for public goods vertically— properly applies, and use the word in a loose populist fashion to include lots of stuff that governments in fact provide even though it’s rival and/or excludable. Most obviously, here: public education. If economists had more logical rigor and theoretical integrity, they would proclaim with one voice that public education is not a public good, because classroom seats are rival– only one student can sit in a seat at a time; teachers can only grade one homework assignment at a time– and excludable– it’s perfectly feasible, though not permitted by current law but that’s irrelevant in principle, not to let a student into the classroom. But since that’s too politically incorrect, they usually say, with a shade of embarrassment, that, well, yes, education must be a public good, although it’s not an “impure” public good, since… well, since it doesn’t really meet the criteria for being a public good, at all. (At most, it has positive externalities.) I won’t say that education isn’t a public good, since everyone muddle-headedly insists that it is and I don’t feel I have a right to redefine the phrase public goods to be consistent with the theory. But I would advocate limiting the use of the term to exclude education.

While private and public goods get the most attention, the two criteria clearly imply, not merely a dichotomy, but a four-way typology, as shown in the table below:

Excludable Nonexcludable
Rival Private goods, e.g., food, shelter especially if privacy is a human need, a car if sharing isn’t feasible Parking spaces are one example. These goods might make the basis for legitimate nativist complaints
Nonrival Patented inventions and copyrighted books are the most well-known examples National defense is the classic example; public statues; music in the park; clean air

There would be many grey areas here even if what ought to be the clear case of education were definitely reclassified as a private good. We don’t exclude people from the park; but could we? Could we do it at reasonable cost? The park is usually non-rival, but perhaps on a brilliant bright Saturday when winter suddenly melts into spring, it is so crowded with picnickers that one can’t find a place on the grass, and the park becomes rival. Emergency room care is technically excludable: one could leave people who don’t have insurance or cash bleeding outside the doors. But it’s not legally excludable, since 1986, and perhaps it’s not morally excludable somehow, if we think a doctor has a moral obligation to help someone in desperate need in his field of vision even if they can’t pay. (I’m much less sure that that’s true, than that it’s wrong to exclude peaceful people from US territory by force.)

Now, the comparative advantage argument suffices to show that natives will collectively benefit from immigration to the extent that only private goods are at stake, and in a sort of rough, approximate fashion, migration taxes and transfers to natives should be able to make open borders Pareto-improving with respect to private goods. Basically, just by coming into the country, immigrants don’t acquire access to any of the private goods natives previously possessed. Natives’ exclusive claims to their private goods aren’t affected.

As for public goods, while immigrants can’t be prevented from enjoying them, this is not a downside to immigration, because public goods are, by definition, nonrival. The fact that immigrants are enjoying them doesn’t reduce natives’ ability to enjoy them, at all. Even if immigrants make zero contribution to the public goods of their host country, natives have no grounds for objecting to their presence, because the natives still enjoy just as much of the public good as they did before. More likely, immigrants will make at least a small, possibly a large, contribution to the host country’s public goods. In that case, natives are strictly better off.

Nonrival but excludable (or partially excludable) goods are important because they include designs, ideas, blueprints, technologies, whatever you want to call them. Migrants won’t reduce the supply of those. Well, unless open borders has a negative effect on the progress of the global economic frontier, but that’s a topic for another post.

The category of goods for which the nativists’ “smaller-share-of-the-pie-for-us” notion might be valid is for goods that are nonexcludable yet rival. Parking spaces may serve as an example, for although exclusion is sometimes possible– parking meters, gates and tickets in parking garages– it’s costly to regulate street parking, so to hold down transactions costs it might sometimes be best to treat parking as nonexcludable. If parking is nonexcludable, newcomers to a city may lower the quality of life for existing residents, by crowding the streets with cars and making it hard to find a parking space.

How many nonexcludable but rival goods are there? We treat public education as one, though in principle it need not be. Likewise emergency room care. The streets themselves are treated as nonexcludable (and probably exclusion would be infeasible and/or would violate rights in many cases) and might be rival in some respects, e.g., if you’re using the street for a rally of shouting protesters, I can’t very well use it to play serene classical music. Do storefronts have a nonexcludable but rival character for window shoppers on a crowded day? Does the random interaction of people with strangers on the street somehow have the character of a nonexcludable, rival good?

What international evidence exists for adverse impacts from illegal immigration or amnesties for immigrants?

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In the US, California is every restrictionist’s (and fair-minded skeptic’s) example of how badly things can go wrong if you mismanage immigration policy. I have not yet seen someone cite country-level evidence of poor immigration policy’s impacts: given that Italy and Spain have given multiple amnesties to unauthorised immigrants over the last 3 decades, and the current state of their economies, this seems surprising. Does anyone know of a comprehensive analysis that looks at jurisdictions outside the US?

To be clear, I often see specific references to how life in California is now terrible because of illegal immigration. Commonly-cited examples are the problem of the state government’s debt, a dysfunctional state government, soaring crime rates, deteriorating levels of social trust, a collapsing public school system, the high level of unemployment…I could continue on. I often see references made to California as the ultimate end-state for any jurisdiction that permits a large amount of illegal immigration, and would like to understand if this conclusion has been validated or supported by analyses that look at other jurisdictions with large amounts of illegal immigration. A previous post considered this question in the context of comparisons between the US states, but for this post, I’m interested in international comparisons.

I’m fine with somewhat unsophisticated stabs at this analysis: breadth can be just as important as depth, and given the rather poor state of knowledge about the ultimate impacts of high levels of immigration, any research or analysis can prove valuable. My understanding is that France and Germany both have ongoing processes for unauthorised immigrants to regularise their status, and considering the widespread use of discrete amnesties in other European countries’ immigration policies, it would be interesting to see if there are any different impacts, and what people’s thoughts are on the impact of either option has been relative to a counterfactual where these European countries did not regularise any unauthorised immigrants whatsoever.

The US has only implemented one amnesty of note, in 1986. In Europe, amnesties are much more common. Poland for example announced in 2011 its third amnesty since 2003 (though to be fair, Poland has much fewer unauthorised immigrants than the US). Surely there has been some study of the impacts of these amnesties, or even some informal comparison that correlates the number of unauthorised immigrants to various socioeconomic indicators at the country level. And I’m only really somewhat aware of amnesty policies in Europe: I’m not even sure what arrangements, if any, exist in other continents.

And going beyond amnesty, large numbers of unauthorised immigrants exist in various countries. The number of unauthorised immigrants could similarly be correlated to various indicators, as informal analyses in the US often do with California. If we rank countries by the percentage of their population that is present without legal authorisation, how would that compare to the ranking of countries by GDP per capita, or public debt per capita, or rankings in international educational aptitude surveys like PISA or TIMMS? What about ranking countries by the number of previously unauthorised immigrants whose legal status has since been regularised? Here are two charts (from link #3 at the end of this post) which rank EU countries:

EU-27 regularizations through programsEU-27 regularizations through mechanisms

A quick glance suggests that some of the worse-performing Eurozone economies have been much likelier to offer larger-scale regularisations. However I’m not sure what to make of Germany and France coming in right behind four of the PIIGS on this scale, or of Germany and France topping the list when it comes to mechanism-based (i.e. ongoing) regularisations. Moreover within the PIIGS it also seems quite clear that Italy and Spain are performing better than Greece (I am not sure where Portugal stands). So the correlation, if there is one, does not appear to be that strong.

(Something else that may be food for thought: according to the source for these charts, France once insisted that the EU adopt a continent-wide ban on mass regularisations of the “amnesty” type currently being discussed in the US. This idea was dropped because Spain vetoed it. It would be fascinating to learn what’s driving the different approaches here.)

If anyone knows of material that might be pertinent to the issues I’ve raised here, I would love to hear about it in the comments of this post. We can compile a compendium and document it on an Open Borders page about illegal immigration, and/or the regularisation of unauthorised immigrants. This compendium would be a useful reference for future discussions and blog posts on this site.

I’ll start by listing out some documents I’ve been able to find, and will add to this list as people post in the comments:

  1. Why Countries Continue to Consider Regularization, Amanda Levinson (2005) — a good summary of how different countries approach regularisation/amnesty, and where volumes stood as of 2005
  2. Regularisation programmes in France, Amanda Levinson (2005) — a good summary of the French approach, but no contextualisation with respect to how it compares to elsewhere
  3. Regularizations in the European Union, Kate Brick (2011) — probably comes closest to what I’ve been looking for, has excellent comparisons of different countries’ approaches to regularisation

The Gang of 8 immigration deal

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I’m not a political junkie (anymore) and I try not to follow all the feints and counter-offers and posturing and whatnot that comprises so much of political discourse, but at this point the momentum for immigration reform in Washington seems really to be bearing fruit. A deal has been made. The New York Times celebrates:

Huge news from the scorched desert of immigration reform: germination!

At last there is a bill, the product of a bipartisan group of senators who have been working on it for months, that promises at least the hope of citizenship for 11 million undocumented immigrants. It is complicated, full of mechanisms and formulas meant to tackle border security, the allocation of visas, methods of employment verification and the much-debated citizenship path…

There will be much to chew on in coming weeks, but it is worth a moment to marvel at the bill’s mere existence, and at the delicate balancing of competing interests that coaxed this broad set of compromises into being…

The bill gets around the “amnesty” stalemate by turning the undocumented into Registered Provisional Immigrants — not citizens or green-card holders, but not illegal, either. They will wait in that anteroom for a decade at least before they can get green cards. But they will also work, and travel freely. The importance of legalizing them, erasing the crippling fear of deportation, cannot be overstated.

Yes! Deportation is a particular disgraceful feature of the American polity, and it will be a tremendous moral relief to have it, if not permanently and generally abolished, at least abolished for most of the millions who live under the threat of it now. The Times deplores the length and difficulty of the path to citizenship:

That said, a decade-plus path is too long and expensive. The fees and penalties stack up: $500 to apply for the first six years of legal status, $500 to renew, then a $1,000 fine. If the goal is to get people on the books and the economy moving, then shackling them for years to fees and debt makes no sense.

The means of ejection from the legalization path, too, cannot be arbitrary and unjust — people should not be disqualified for minor crimes or failure to meet unfair work requirements. It should not take superhuman strength and rectitude, plus luck and lots of money, for an immigrant to march the 10 years to a green card.

Here I’m ambivalent, except about the “means of ejection” sentence. You can’t justly deport someone just because they don’t want a job, and to deport someone for, say, a speeding ticket, is a violation of just proportionality. My sympathies lie with a relatively short and easy path to citizenship. But reason tells me that if your goal is an immigration regime that is simultaneously incentive-compatible and humane, you can’t make the path to citizenship easy. And $500 here and $1,000 there are nothing compared to the income gains that immigrants to the US typically enjoy, though I’d prefer to see money extracted from immigrants in the form of taxes attached to earnings rather than as lump-sum fines and fees, so we can raise more revenue from those doing relatively well while mitigating the hardship we cause for the poorest immigrants. Continue reading The Gang of 8 immigration deal →