March 7, 2011

The country left behind

Based on the 64th round of the National Sample Survey (NSS), a report on migration was released in India. According to the report, 28.5 percent of Indians were migrants—in other words, they no longer lived in their place of birth.

Both the World Development Report (WDR) and Human Development Report (HDR) for 2009 focused on migration, with the latter being more prominently centred on the topic. Migration needn’t be a cross-border phenomenon. In fact, when Indians migrate, most of their movement is within the state, even within the district. However, data on intra-country migration is weak, and most discussion on the topic of migration—including Devesh Kapur’s—is based on cross-country trends.

Traditionally, migration analyses and policy prescriptions have focused on a few topics. First, India has a demographic dividend and a labour cost advantage. The rest of the world, including China, is greying. India should tap into that vacuum—so, should we aim to achieve this through cross-border migration (multiplier benefits occur in host country) or outsourcing (multiplier benefits occur in India)?

Second, the developed countries, the World Trade Organisation (WTO) and regional trade agreements have a thrust on free cross-border movement of capital. This is myopic globalisation, unlike 19th century globalisation, which was driven by free movement of labour. Therefore, in negotiations, we should push for free cross-border movements of labour and highlight developed countries’ policies of protectionism in hindering this.

Third, remittances have been important in managing balance of payments, a factor that has become less important post-1991, with capital inflows and export of invisible services.

Fourth, the gain to developed countries due to the brain drain is obvious. However, aren’t we subsidising developed countries like the United States? After all, there are explicit (and implicit) subsidies that have gone into, among other things, the education system. Should one impose a tax on human capital exports to recover this?

Fifth, a large chunk of international migration is not from developing countries to developed countries, but from developing countries to other developing countries. How should India handle the problem of in-migration from neighbouring countries from the subcontinent? Sixth, what has been the role of the diaspora in strengthening India’s soft power status? Seventh, what has been the role of the returning diaspora in India’s domestic IT sector’s progress, or even in strengthening the civil society and NGOs?

Research on all of these strands has been conducted to date in bits and pieces. That apart, most research has concentrated on what happens in the receiving end (host country). Mr Kapur’s book—and the published work that led up to it—focuses on the effects in the sending side (home country). In the conceptual-cum-analytical framework, four channels are identified, with an emphasis on the home country. These are the prospect channel, the absence channel, the diaspora channel, and the return channel. Here are quotes from the book to explain the purpose of the different channels:

“The prospect channel captures the way in which a prospect or an option of emigration affects the decision-making of households and whether they actually end up emigrating. The prospect of emigration affects decisions ranging from skill acquisition to the incentives for the exercise of voice to linguistic preferences.”

“The absence channel focuses on the effects on ‘those left behind’ (TLBs) in the case when individuals actually leave…This is particularly important in a multi-ethnic society like India, where differential rates of emigration can alter its ethnic balance.”

“The diaspora channel speaks [about] the impact of emigrants on the country of origin from their new position abroad.”

“The return channel looks at how returning emigrants can affect the domestic political economy differently than if they had never left”.

It has been said that an average economist looks at partial equilibrium, while a good economist looks at general equilibrium. With the caveats that this isn’t about intra-country migration, effects on the host country or cross-border elements in negotiations, this is as general an equilibrium as one can get. However, what is the point of a general equilibrium if you don’t have the data for analysis?

Strictly speaking, Mr Kapur isn’t an economist (he is an Associate Professor of Political Science at the University of Pennsylvania), but he has done better than most economists. Over a period of time, he has built up not one, but five data sets. First, there is a one-shot (2003) survey of emigration from India, with 210,000 households. Second, there is a database of the Asian Indian population in United States, with 410,000 households. Third, there is a survey (2004) of 2,200 households, which is a subset of the second source. Fourth, there is an “elite” database, constructed from “Who’s Who in India” and the civil service. Fifth, there is a survey of Indian diaspora NGOs in the United States. There is an inevitable US bias, but that apart, these databases have been constructed and used ingeniously. They are critical to the volume, because rigorous work on migration is rare due to non-availability of data.

There are nine chapters, with four appendices that explain the databases. Chapter 1 is the introduction, while Chapter 2 sets out the analytic framework and research methodology. Chapter 9 is the conclusion.

The titles of the other chapters explain their purpose: Chapter 3 is on “Selection Characteristics of Emigration from India”, Chapter 4 on “Economic Effects”, Chapter 5 is on “Social Remittances: Migration and the Flow of Ideas”, Chapter 6 is on “International Migration and the Paradox of India’s Democracy”, Chapter 7 is on “The Indian Diaspora and Indian Foreign Policy: Soft Power or Soft Underbelly”, and Chapter 8 is on “Civil or Uncivil Transnational Society? The Janus Face of Long-Distance Nationalism”.

The data throw up interesting insights. However, some chapters do seem to state the relatively obvious at some level. Seen from an overall perspective though, this is a great book that should be read by everyone—in particular by those who are interested in India and Indian policy-formulation.

Book: Devesh Kapur, Diaspora, Development and Democracy, The Domestic Impact of International Migration from India, Princeton University Press and Oxford, pp.(xv)+325. Kindle Edition

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