As fellow blogger Nathan Smith has argued before, the basic problem of political externalities is an essentially solved problem. To summarize, giving immigrants the vote is not a necessary addition to giving them the right to immigrate here. But can immigrants actually be a beneficial political externality? I’m going to try to examine the argument in favor of that. I should note that I will be working on the assumption that an increase in support for capitalism is a positive externality, so this argument is primarily for those with more conservative or libertarian views given that they tend to show more support for increased immigration restrictions.
One can point to certain anecdotal examples. David Henderson for instance has fairly recently blogged about his efforts in blocking local tax increases in his community. Here is an example of a Canadian immigrant helping to improve (at least from a perspective of economics) political outcomes in the place he has chosen to move to. However, Dr. Henderson is also a very particular kind of high-skill immigrant, namely an economist. So are high skill immigrants more generally likely to improve the political situation of the country they move to? Some examples, both current and historical might be useful in this case.
To start, let’s examine Southeast Asia. Southeast Asia has a long history of Chinese immigrants, often including many high skill emigrants such as merchants and businessmen. Today though, three countries stand out as having a large proportion of ethnic Chinese in their populations (in order from most to least): Singapore, Malaysia, and Thailand (with nearly 77%, nearly 24%, and 14% of their populations being Chinese respectively). Singapore may be an unfair example due to its small size and location as a convenient port-of-call going through the Straits of Malacca, so in the interest of looking at a more “apples-to-apples” type comparison, let’s forget about Singapore. Even discarding Singapore however, the institutions and economic success of Thailand and Malaysia stand out compared to the rest of South East Asia. Of all the countries in Southeast Asia (for this discussion that area including Myanmar, Laos, Vietnam, Cambodia, Thailand, and Malaysia) only Malaysia and Thailand manage to qualify for the label “moderately free” on the Heritage Foundation’s index of economic freedom, the rest of the region being labeled “mostly unfree.” Turning then to economic performance, the results are also significant.
On the general Human Development Index, Thailand and Malaysia both easily beat the rest of their region. This is also reflected in their GDP per capita numbers, with less wealthy Thailand having three times the GDP per capita as the richest country of the rest of the region, Vietnam. This result does not come from a sending country with superior institutions thereby simply bringing Malaysia and Thailand up to China’s level. Malaysia and Thailand both currently outperform China on GDP per capita, are far higher ranked on the economic freedom index, and while Thailand and China have similar HDI rankings, Malaysia clearly surpasses China.
This “immigration leading to better institutional outcomes than was the case in either the sending or receiving country” outcome makes sense once one remembers that immigrants are self-selecting. This is especially the case with high-skill immigrants whose education will tend to be correlated with more pro-capitalism conclusions (full text should be freely available, worked for me anyways). While it should be emphasized that education is not necessarily the cause of pro-capitalist conclusions, the correlation can be used to the advantage of immigrant-receiving countries. Large numbers of educated immigrants with the ability to impact politics would tend to lead to outcomes that libertarians would tend to prefer.
So the upshot for those worried about killing the goose that lays the golden egg, allow me to offer a different keyhole solution. Maintain open borders for the economic benefits, and then require immigrants to attain a certain level of education before being allowed voting rights. The result can then be that countries receiving immigrants can not only improve their economies, but their political structures as well.