The Case for Brain Vacuum

"Don't Close the Golden Door: Our Noisy Debate on Immigration and Its Deathly Silence on Development"
Michael Clemens, Sami Bazzi
Center for Global Development


"People working abroad interact extensively with their countries of origin. They send enormous amounts of money home; they help build trade and investment ties between the United States and the rest of the world; they serve as conduits for spreading American technology and ideas to the world; and they make it easier for other people from their countries to find work here.

People working in the United States sent $45 billion in unrequited transfers to Latin America in 2006.4 This vastly exceeds all U.S. development assistance in the same year, not just to Latin America but to the whole world ($23 billion).5 Remittances are roughly one-fifth of gross domestic product in Albania, El Salvador, and Haiti. Sums this massive have a large positive effect on welfare in the countries of origin. But cash gifts are just the beginning of the story. Other, perhaps far more important, interactions occur between diasporas and home countries. Indian and Taiwanese immigrants to the United States, for example, have been crucial to the formation of manufacturing and informational technology hubs in those countries, by serving as intermediaries, commercial ambassadors, investors, and conduits for technology transfer. Chinese entrepreneurs in California were the first to commission the manufacture of IBM-compatible computers from Taiwanese firms like Acer, Mitac, and Compeq in the 1980s. This blossoming of high-tech industry helped induce tens of thousands of Taiwanese engineers to return to Taiwan from the United States in the 1990s. In other words, earlier migration was part of the process of developing home industries and
retaining skilled workers. Migration did not affect Taiwan’s development; it has been part of Taiwan’s development. Likewise, Indian engineers working at U.S. firms were the first to outsource software services to their home country, which encouraged others to do the same and sparked rapid economic growth in Bengaluru, Hyderabad, Mumbai and elsewhere.6 Investment capital also flows through migrant networks: small firms in Mexico that are attached to migrant networks face a lower cost of capital, and thus reap greater profits, than those that are not.7 One of Africa’s most important cellular telephone networks was built and financed by Mohamed Ibrahim, a naturalized British citizen who left his native Sudan at age 26.

There is a common theme here. We know from our own history that analogous patterns have been part and parcel of our own process of slowly developing into a very rich country over centuries. The development of the whole nation, not just its urban areas, has been driven by people born in rural areas who moved to urban areas to make their mark and never went back: John D. Rockefeller, Abraham Lincoln, Thomas Edison, and countless others. These people built networks of trade and investment, shaped ideas, and brought new technologies to every corner of the country—and the whole nation benefited, not just the cities they spent their careers in. Such linkages did not “affect” our development process; they have been an intrinsic part of it. We should expect nothing
fundamentally different at the global level, where the United States is a hub for world commerce, ideas, and capital, just as New York City has been a hub for commerce, ideas, and capital to all fifty states."