Political externalities

This page discusses a general concern surrounding migration. The page attempts an overview of the concerns raised, the empirics surrounding them, their moral evaluation, and potential remedies. Please treat this page only as a starting point.

Because many of the empirics are up for debate, this page describes the general idea using simple plausible scenarios, largely avoiding naming specifics when laying out the general ideas. The discussion of scenarios should not be construed as endorsement of their empirical truth in general or in any particular circumstance.

Basic idea

In economics, “externalities” refers to costs and benefits imposed by people on other people outside of contractual relationships or chains of contractual relationships. The classic example of a negative externality is a factory polluting the air or water with its exhaust and waste, thereby degrading the quality of life for residents of the area or (to the extent that the polluted air or water spreads) the world at large. The key point here is that the residents of the area, or the world at large, are not in a contractual relationship with the factory, so they cannot negotiate the terms of the contract to get the factory to stop polluting or compensate themselves for the harms the factory inflicts on them.

The term “political externalities” refers to the idea that in the political realm, people’s actions impose costs and benefits on other unrelated individuals outside of contractual relationships. For instance, a state ballot initiative may be used to determine tax rates or whether gay marriage will be formally recognized by the state. In this case, individuals are affecting the political and regulatory regime that other individuals operate in, without any (direct) way for the other individuals to negotiate the terms with them.

Political externalities apply in any regime with nation-states and governments that decide laws, particularly laws whose details are subject to change. However, they are most relevant in a democracy, where a lot of people exert political externalities on each other.

When people talk of the “political externalities of immigration” or “political externalities of emigration” they are referring to the fact that, since migration changes the set of people who are participants in the political process and customers of institutions controlled by the political process, it could change the qualitative nature and quantitative extent of the externalities.

Note that externalities could be positive or negative, and prima facie, the nature of the changes to political externalities due to immigration or emigration could be good or bad. Whether you consider it good or bad depends on the political results you think are desirable, and also your empirical view of how migration would affect political results.

Political externalities of emigration: a brief note

Emigration can also change the political landscape in a country and the nature of political externalities that people exert on each other. While this falls within the broad realm of “political externalities”, the term “political externalities” has historically referred primarily to the political externalities of immigration. For more on the political externalities of emigration, see our delay of political reform page.

Political externalities of immigration exerted through the views and beliefs of the immigrants (and possibly their descendants)

This is the simplest form of political externalities: the immigrants themselves, being new people, and not statistically similar to natives of the host country, change the nature of political externalities through their views and beliefs. There are a few caveats:

  • Most immigrants don’t immediately get voting rights. In general, voting rights are tied to citizenship, and immigrants are not immediately eligible for citizenship. Many temporary workers are not even eligible to get on the path to citizenship. However, over longer timescales, the immigrants, and their descendants, do affect the nature of the political landscape.
  • Immigrants often have lower voter turnout than natives, even when they are eligible to vote. There are also other ways that they find it harder to be an important force in political participation. On the other hand, even non-citizen immigrants can influence the political process by contributing their time, money, and energy to policy proposals, lobbying, and political campaigns. In many countries, non-citizens have the full suite of economic and civil rights, both de jure and de facto, to perform these activities at the same level as natives.

There are a few related reasons that people might believe that immigration could affect the nature of political externalities:

  • Home country policy replication: The idea is that migrants, who are familiar with the politics of their home countries, may seek to vote for policy packages that replicate those policies in their new country. If the policies of their home countries are worse (something that is likely to be true, because migration tends to flow from countries with less successful political and economic systems to countries with more successful political and economic systems) then this is a bad thing.
  • Immigration assimilation to political values and beliefs: Even setting aside the question of whether the policies of their home countries are objectively worse, or whether they are trying to replicate those specific policies, immigrants may still have different political values and beliefs (relative to natives of their host country) stemming from their home country experiences, and their presence may therefore shift policy in a direction undesirable to natives. On some views, this is ipso facto a negative, insofar as it means that natives lose control of their polity, regardless of the rightness or wrongness of the competing value systems.
  • Failure of emotional assimilation and patriotism: This is slightly different from the preceding points, in that the problem is not so much immigrants’ policy positions as their ethnic and national loyalties. For instance, perhaps French immigrants to the UK still vote for politicians who support the interests of their homeland, France, or of immigrants like themselves, or their co-ethnics in the UK, rather than the interests of the UK at large. Or, Mexican immigrants to the US and their descendants may support Mexican Reconquista.
  • Differences in general characteristics that predict different political beliefs: The claim here is that it is not the immigrants’ immigrant status that is problematic. Rather, the issue is that immigrants tend to disproportionately have particular characteristics (such as socio-economic status, IQ, education level) that predict support for particular types of political beliefs. The immigrant status may not matter directly — natives with similar characteristics may hold similar political beliefs. But migration policy can change the relative proportions of people at various positions of the spectra of socio-economic status, IQ, education level, etc. and therefore shift the relative power of different ideologies.

Political externalities via the mechanic effect: changes to magnitudes of political externalities holding policy constant

Another potential source of confusion in the way the term “political externalities” is used is that it could sometimes refer to a purely mechanic effect of migration policy: even without any change to domestic policy per se, the increase in the immigrant population could affect the nature and extent of effect that existing policies have on natives. For instance, consider a situation where migration is liberalized for a class of immigrants that, on average, use a lot more in welfare benefits than they pay in taxes. In this case, even with no initial change made to fiscal policies, the liberalization of migration policy affects the fiscal situation of the state, and this could force later policy changes.

This notion of political externality is not contingent on the immigrants’ political beliefs or their ability to effectively participate in the political process. Thus, this type of political externality can be exerted through immigration even if the immigrants are not eligible for citizenship.

Political externalities via native response

The third important way that immigration creates political externalities is through native responses to the changed regime. This could include:

  • Nativist backlash against the increased proportion of migrants, as effected through the political process. For instance, natives may vote to reinstate policies that facilitate discrimination against migrants or people of ethnicities dominated by migrants.
  • Native responses to the changes to their life that natives experience due to the mechanic effects of migration via existing policies. For instance, if increased migrant welfare use bankrupts the fiscal condition of the state, natives may vote for higher tax rates or for dramatically cutting back the welfare state.


Here are some writings that make the case in favor of political externalities being a sufficient justification to radically restrict immigration:

  • The Negative Externalities of Immigration, a blog post by Richard Hoste, where he writes:

    Unfortunately, the low IQ masses vote. They demand free health care, welfare and schools for their children.

  • Open borders and the Welfare State , a blog post by Tino Sanandaji, which is an English translation of a piece originally written in Swedish. The original is here.
  • Some commenters on EconLog have raised concerns about how immigrants might suppress civil rights and undo progressive gains. For instance, Ken B worries about how immigrants may undo the gains toward gay marriage. CC and Eric are worried about immigrants making abortion illegal in the United States.
  • Various people have made “tipping point” arguments about the political externalities of immigration: a little more immigration will cause the US to permanently slide down the slippery slope to statism and socialism and become a banana republic. A moderate version of this concern is expressed in this comment by Mark Crankshaw.

Summary of counterarguments

Some of the counter-arguments are expressed by Bryan Caplan in a blog post:

1. Open borders are an extremely important component of the free market and human liberty.  The labor market is roughly 70% of the economy.  Labor is the main product that most people around the world have to sell.  Immigration restrictions massively distort this market, and deprive literally billions of people of the freedom to sell their labor to willing employers.  So even if open borders made all other policies much less pro-market and pro-liberty, the (open borders + side effects thereof) package would almost certainly constitute a net gain for free markets and liberty.

2. The political effect of immigrants on markets and liberty is at worst modestly negative.  The median American isn’t a libertarian, and the median immigrant isn’t a Stalinist.  We’re talking about marginal disagreements between social democrats, nothing more.  Immigrants’ low voter turnout and status quo bias further dilute immigrants’ negative political effect.

3. Immigrants have overlooked positive effects for markets and liberty.  Voters resent supporting outgroups; that’s a standard explanation for why ethnically diverse America has a smaller welfare state than, say, Denmark.  So even if all immigrants want a bigger welfare state, their very presence reduces native support for redistribution.  Immigrants are also markedly more pro-liberty and pro-market than natives in one vital respect: They favor more open borders.

Other Caplan blog posts that make these arguments in more detail are listed below:

More links on the empirical debate surrounding political externalities are at the end of this page.


  • Deportation meta-counterargument: Bryan Caplan has considered the statist generation analogy: why not deport the younger generation of voters, who tend to be statists?
  • Turning the camera around: In a blog post titled Turning the Camera Around: the Political Externalities of the Status Quo, Bryan Caplan considers the political externalities of the present situation from the perspective of immigrants and potential immigrants, drawing on parallels with apartheid (and also, implicitly, Jim Crow laws).
  • Rejecting slippery slopes: In a blog post comment, Evan provides a slippery slope argument (note that Evan uses “political externality” a little more loosely than its use on this page, but this is partly because restrictionists often tend to conflate the changes immigrants bring about through their voting power and their use of existing institutions determined politically):

    My main objection to the “immigrants use too much welfare” type arguments isn’t necessarily whether or not they do. It’s that using such arguments is a slippery slope that can lead to all sorts of horrible socialist interventions. If you start restricting and regulating a group of people because they place a greater than average burden on social services, where are you going to stop? What conservatives and libertarians fail to realize, when they make these political externalities arguments, is that the left uses these exact same arguments to justify all sorts of awful restrictions on our freedoms.

    Smoking bans? The left justifies them by arguing that smoking causes political externalities. Banning fast food restaurants? The left justifies it by arguing that fat people cause political externalities. Soda taxes? Again, the left justifies it by arguing that fat people cause political externalities. Forcing people to buy health care? The left justifies them by arguing that uninsured people cause political externalities. Onerous safety regulations? The left justifies them by arguing that injuries cause political externalities. And the worst example of all that I found was a (luckily unsuccessful) attempt by a faction in the Dutch Parliament to tax stay-at-home moms because since they’re not working they’re not returning the “investment” the government made in their educations.

    So I’ve decided, as a matter of principle, to unilaterally reject all “political externality” based arguments for restricting people’s freedom, whether it’s restricting immigration, or restricting fatty foods. The slippery slope it leads down is just too dangerous.

    I reject “Overlord Arguments” for the same reason, most conservatives and libertarians who use them as a justification for immigration restriction fail to realize that such arguments can and have been used by the far Left to justify every single social engineering scheme they want to force on us.

Keyhole solutions

Guest worker programs whereby people can live and work freely in another country but do not acquire the right to vote may be an example of a keyhole solution.

Empirical debate

The empirical debate on the political externalities of open borders has been carried out through a number of blog posts. Some of these are below:

"The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP" — Bryan Caplan