Political Economy and Migration Policy: Gary P. Freeman and Alan E. Kessler
Political Economy and Migration Policy: Gary P. Freeman and Alan E. Kessler
The disciplines of economics and political science have a good deal to offer each other in
the study of migration policy, but economists have until recently mostly ignored the ways
in which politics constrain migration markets, and political scientists*although giving
considerable credence to economic aspects of migration*have not always pursued these
matters systematically. We consider economic ideas drawn from theories of labour
markets, international trade and public finance and link them to political analyses
stressing the role of states, institutions and interest groups. A review of literature
incorporating these perspectives suggests the promise of a political economy of migration,
but also indicates the considerable work that remains.
Introduction
Economists studying migration have slighted the investigation of migration policies,
the role of states in formulating those policies, and that of politics in shaping policy
outcomes (Borjas 1994; Chang 2000). Political science, for its part, has deployed an
eclectic assortment of theoretical and analytical tools, as many drawn from cognate
disciplines as from political science itself. Cornelius and Rosenblum (2005) argue that
political scientists have tended to accept that migration has a strong, if not dominant,
economic dimension. Nevertheless, political science has not systematically integrated
economic and political concepts concerning immigration.
We argue that both economics and political science would be well-served to join
forces more self-consciously in the study of migration politics. The strengths of each
discipline complement those of the other and make good some of their deficiencies.
The discipline of economics provides some of the most promising and sophisticated
theories, concepts and empirical methods for analysing migration politics. Although
neoclassical economics is criticised for taking preferences as given (especially as
Gary P. Freeman and Alan E. Kessler are respectively Professor and Chair of the Government Department, and
Lecturer in Government, at the University of Texas at Austin. Correspondence to: Prof. G.P. Freeman/Dr A.E.
Kessler, Department of Government, University of Texas at Austin, 1 University Station, A1800 Austin, Texas,
USA. E-mail: [email protected]; [email protected]
Political Science and Migration Policy: States, Institutions and Interest Groups
The contemporary literature on the politics of migration policy is scarcely 30 years
old, but it has produced a broad array of interpretive schemes. A number of reviews
have tried to make sense of the field by categorising research according to its (often
unselfconscious) analytical or theoretical points of view. A partial accounting of
Table 1. Political economy approaches to migration policy
Political science
Economics
Wage and income effects 1 2 3
Fiscal effects 4 5 6
Journal of Ethnic and Migration Studies 657
recent reviews yields interests, the liberal state and globalisation (Hollifield 2000);
Marxism, realism, liberalism, national identity, domestic politics and institutionalism
(Meyers 2000); interests, rights and states (Freeman and Birrell 2001); post-industrial
change, spatial (territorial) models and trade theory (Freeman 2002); globalisation,
embedded realism and path dependence (Hansen 2002), domestic interest groups,
political institutions and international factors (Cornelius and Rosenblum 2005); and
power resources and constellation theories, state-centric and institutional theories,
cost-benefit or economic theories, and cultural and racial/racialisation theories
(Janoski and Wang 2006). Making a necessarily arbitrary choice, we treat the political
science literature here under the three headings of states, institutions and interest
groups.
The state was a central concept of traditional political science, but it nearly
disappeared from view in the wake of the postwar behavioural revolution. The
concept enjoyed something of a comeback in the 1970s with the relatively brief
popularity of neo-Marxist theories and the more lasting resurgence of interest in
institutions. States have always been a major component of realist international
relations theory, where they are typically treated as unitary actors seeking to
maximise the ‘national interest’. In some models, the state is thought to arbitrate
among competing domestic interests to determine policy. Debates on how and why
this arbitration takes place reflected instrumentalist versus structural theories of the
state and its relation to capital (Evans et al. 1985; Miliband 1987; Poulantzas 1982).
American political scientists, perhaps reflecting their experience with a weak and
fragmented liberal state, were less drawn to state theory than their counterparts in
other regions of the world (Seidelman 1985).
The combination of neglect of migration by political scientists with the fascination
of economists for some version of push/pull theory in which individual migration
decisions were a result of calculations of utility focused largely on employment
markets and relative wages meant that the fundamental role of states in stimulating
and organising migration flows was slow to be recognised. Indeed, no one has yet
produced a full-scale effort to apply a theory of the state to migration politics and
policy. Zolberg et al. (1989) were among the first to trace the sources of migration to
the activities of states. Zolberg (1999) produced an articulate case for treating state
regulations and policies as central to the character of migrations world-wide. Still, the
motives that might underlie state actions remain poorly specified. Hollifield (2004)
argues that migration policies of liberal states can be interpreted as steering a path
between the realisation of economic gains (which requires careful, if not always
restrictive, management) and respect for liberal values (which tends to erode such
policies). According to Weiner (1993, 2001) and Rudolph (2003), states approach the
prospect of migration from the point of view of its potential effects on national
security, variously conceived as economic viability, political cohesion, and defence of
the national territory. Hammar (1985), Brochmann and Hammar (1999), and Massey
(1999) view migration policies as problems of management and regulation, directed
658 G.P. Freeman & A.E. Kessler
at both controls over the character of flows and the interactions between migrants
and natives.
Institutionalist accounts disaggregate the state, focusing on the distinct roles played
by bureaucracies, political parties, electoral arrangements, executive/legislative
relationships, etc. in the policy-making process. Institutions have been variously
defined in straightforwardly empirical terms*parliament, president, party, electoral
system*or more loosely to include rules and norms that are not necessarily or
primarily embodied in formal organisations. Institutionalists have been the chief
advocates of the notion of path dependence and the fuzzy and, therefore, indisputable
claim that ‘history matters’. The gist of their interpretation is that the determinants of
policy are complex, difficult to pin down, and certainly not reducible to preferences
of individual actors or group-level demands. Institutional inertia, policy legacies and
‘contingency’ must be taken into account.
Examples of institutionalist accounts of immigration policy abound. Inter-agency
conflict ‘inside the state’ is at the heart of some accounts (Calavita 1992; Fitzgerald
1996; Rosenblum 2004). Political parties have been central to many immigration
studies. Scholars have investigated the immigration preferences of mainstream parties
(Messina 1989; Money 1999; Tichenor 2002), the sources of support for right-wing
populist parties (Betz 1994; Betz and Immerfall 1998; Schain et al. 2002), and the
effect of electoral arrangements on the success of anti-immigration parties (Givens
2005). Soysal (1994) advances perhaps the best-known exposition of the impact of
the new international regime of values and norms transcending traditional notions of
national citizenship (cf. Gurowitz 1999; Jacobson 1996). Hansen (2000, 2002) shows
that path dependence can be helpfully applied to otherwise puzzling immigration
policy conundrums. Efforts to explain the variation across states in the shape and
temperature of migration politics often focus on political opportunity structures that
affect the capacities and incentives of various groups to organise and give voice to
their preferences (Ireland 1994; Koopmans and Statham 2000; Ögelman 2003).
Interest-group arguments date from the seminal works of such luminaries as
Arthur F. Bentley (1908), V.O. Key, Jr. (1942) and David B. Truman (1951). Group
models of politics contest the idea that the individual can be the principal unit of
analysis and instead search for propositions about how and when individuals
coordinate their activities and engage in collective behaviour (Olson 1971). Work in
this vein commonly attempts to link policy demands to concrete (or expected) gains
and losses of identifiable sub-groups of the electorate and to the bargains and
compromises they produce in pluralistic political systems. Interest-group approaches
have focused on a broad array of groups positioned for or against immigration
(Freeman 1995; Gimpel and Edwards 1999; Haus 1995; Joppke 1998; Watts 2001).
For all the insights research in political science yields, a singular failing is that it is
unable to provide a convincing theoretical account of the origins of individual
preferences on immigration or the motivations of institutions with respect to the
issue. Statist analysis, for example, presumes that policy is designed to achieve the
national interest, but provides few sure guidelines for determining what the national
Journal of Ethnic and Migration Studies 659
Economic approaches to immigration thus offer diverse accounts of the costs and
benefits of immigration, leaving analysts to select the model best suited to the
political context in question. Because low-skilled workers or those with low education
are likely to bear the brunt of labour market competition, redistribution of income is
the key mechanism underlying potential political conflict. Where the impact of
immigration on local labour markets appears ‘large’, an increase in the labour supply
accompanying an influx of immigrants is likely to exercise downward pressure on
wages. In such a case, class conflict, or political cleavages pitting businesses and
immigrants against labour, is likely to result. If the labour market impact of
immigration is ‘small’ or social programmes mitigate adverse effects of competition,
on the other hand, non-economic concerns are likely to dominate the political
debate. How one defines large and small is, of course, crucial to characterising politics
and is subject to manipulation by organised political constituencies (lobby groups,
media outlets, issue entrepreneurs, etc.). This is critical for understanding the
interaction between economic and political approaches to immigration. We take up
this argument again below.
If the labour market effects of immigration are of less immediate concern and the
political debate instead is cast in terms of costs and benefits to taxpayers, the cast of
characters engaged in policy debate is likely to change. Fiscal costs and benefits from
immigration cut across class or sector-based lines, pitting taxpayers, localities, and
diverse lobby and special interest groups against one another in the struggle over
policy. Low-skilled workers adversely affected by immigration are, as in the previous
case, likely to push for local or national redress, particularly in high-immigration
localities. Where low-skilled workers are of similar ethnic or cultural background to
immigrants, one may expect that solidarity rather than economic self-interest
dampens incentives to oppose immigration, though ultimately the question remains
an empirical one. Federalism, as in the US and German cases, adds additional
complexity to this discussion, with sub-national governments looking to the central
government for assistance in dealing with the consequences of policies that are a
‘national’ responsibility.
Many of the observations and hypotheses discussed in this section are summarised
in Table 2. In terms of standard production function or aggregate output accounts
summarised across the first row of the table, the expected economic effects of
immigration yield a familiar class-oriented account of potential political cleavages.
Businesses benefiting from an increase in the supply of labour gain, while labourers
competing with new immigrants face a more competitive labour market. Trade
models, depicted in the second and third rows, offer a distinct starting-point for
political economic analysis. In the H-O context, immigrants enter into the
production process in a manner consistent with their skill-set, exercising little
impact on the labour market and, hence, occasioning little reason for political action.
The specific-factors model better approximates potential economic incentives that
might generate political tensions in the short run (during the process of economic
adjustment). Immigration is expected to depress wages of citizens and residents of
Journal of Ethnic and Migration Studies 663
Table 2. Economic models of migration effects and projected political consequences
Model Relevant actors Economic effect Politics
H-O model* 2 factors (capital, No wage effect (in long Model predicts none
labour) or skilled, run), change in but expect short-run
un-skilled labour production opposition from workers
bearing cost of adjustment
*Heckscher-Ohlin model.
wins, loses.
similar skill, but augment incomes of other socio-economic actors. A rich set of
coalitional possibilities thus arises, with patterns of support for and opposition to
immigration attuned to the mobility and sectoral affiliation of organised groups.
Fiscal models, highlighted in the bottom row, identify an even broader array of
potential economic effects and offer a richer but complex set of political patterns.
One might expect class tensions in light of perceived competition for public goods
but matters of geographic concentration or regional or local politics (particularly in
federal systems) complicate straightforward hypotheses. With respect to the
beneficiaries of tax-funded programmes versus those who are essentially tax-payers,
the model predicts that beneficiaries favour a status quo in which they gain but are
likely to face high collective action costs*a status quo bias effect. Because the
situation is symmetrical, generally, welfare effects are opposite.
Economic models produce powerful hypotheses about the economic effects of
various types of migration and, therefore, the stakes involved for migrants and
natives. If actors respond to the economic incentives produced by migration, the
models should be predictive of the political conflicts and coalitions generated by
migration. One obstacle to testing these economic hypotheses is that the models from
which they are derived are highly abstract, general and simplified. In the real world,
migration flows are more numerous and complex than the models can accommodate.
Efforts to test trade models with historical data drawn from specific countries find
considerable support, but confront important instances when economic predictions
are not confirmed (Kessler 1999). Addressing the interaction of economic and
664 G.P. Freeman & A.E. Kessler
restrictive measures that seem to belie economic needs. Labour-short Britain attempted
to close Commonwealth immigration in the 1960s and accepted only limited numbers
of European displaced persons after World War II. Japan and South Korea currently
pursue restrictive policies that belie labour market conditions (Seol and Skrentny 2004;
Tsuda and Cornelius 2004). If the expectation of open immigration policies is the
starting-point of economic models, then a major task is to account for the substantial
deviation of policies from that expectation in particular countries and times.
Beyond that, there is a complex interpretive issue involved in classifying immigra-
tion policies as restrictive or open. What exactly do large-scale irregular immigration,
unauthorised employment, and rolling amnesties indicate about the intentions of
policy-makers? Are they policy failures or are they at least partially intentional ‘gaps’
designed to achieve economic goals indirectly or covertly? Does a tolerance of illegal
border crossings and unauthorised work in the informal sector indicate preferences for
actual open migration policies without formally endorsing them?
Turning to the fiscal effects of immigration, support for economic hypotheses from
comparative evidence is, again, mixed. Consider first the matter of maximising
revenues from migrants. The most effective means for achieving this goal are
combating irregular immigration, suppressing immigrant participation in the
informal economy, and discouraging remittances to countries of origin. Irregular
workers are more likely than natives to participate in the informal economy and
workers there tend to underpay or avoid taxation on income altogether. Monies
dispatched back home are not spent in the country of immigration and, thus, bypass
consumption taxes. Whether states are making good-faith efforts to suppress the
informal economy is a topic too broad for serious consideration here, but estimates
suggest that informalisation is pervasive in the United States (with the number of
illegal migrants as high as 12 million) and in many European countries (Geddes 2003;
Reyneri 2001). With regard to remittances, liberal states lack the legal authority or the
means to restrict them and to do so would undermine major incentives for migration
in the first place. Indeed, the promise of remittances is employed as an inducement
for sending states to enter into migration agreements. What is perhaps even more
striking is the failure of either sending or receiving states to tax remittances in order
to redirect spending from consumption to investment in the homeland or to capture
more of the economic gains of migration in the host society (Bahgwati and
Partington 1976; Kapur and McHale 2005; Özden and Schiff 2006). In sum, states
may well wish to maximise revenues coming from migrants, but they appear ill-
equipped to achieve this end.
With respect to limiting migrant access to publicly-funded benefits, the record is
more complicated. Some immigration programmes have endeavoured to prevent
immigrants from participating in public benefits programmes. Guestworker schemes
in Europe did not specifically stipulate that immigrants could not benefit from health
care or housing subsidies, or the like. Instead, their temporary character, and the fact
that residence permits were often linked to time-limited work permits, created a
system in which immigrants who lost their jobs (and might be expected to resort to
666 G.P. Freeman & A.E. Kessler
public benefit schemes) would be impelled to return home. These plans did not work
as designed, of course. Authorities representing components of national states (welfare
bureaucracies, local governments, and the courts) foiled these schemes by upholding
immigrant claims to a vested interest in social benefits (Bommes and Geddes 2000;
Joppke 1999). States have sometimes taken aggressive steps to cut off migrant access to
public largesse, as in the case of the UK (Geddes 2000a) and the USA (Freeman 2001).
In the US case, some of the most serious efforts to limit immigrant consumption of
public benefits have come from grassroots movements in states and localities heavily
impacted by migration, and have been targeted against central government policies
seen as too generous or poorly enforced. Studies cited above that indicate that in the
USA the central government enjoys a net fiscal gain from migration whereas some
states and localities do not, suggest that central governments have an incentive to
offload the costs of immigration onto local communities.
One important fiscal issue is the possible impact of immigration on the financial
viability of unfunded public pension programmes. Immigration enthusiasts some-
times argue that, because of their relative youth and high rates of labour force activity,
immigrants make a positive contribution to the stability of pension systems and other
welfare programmes. Immigrants may also contribute to social security funds but
often never claim their benefits in retirement, either because they go back to countries
of origin, make contributions to fictional social security accounts, or die on average
earlier than native workers. Most serious studies indicate that migration can play only
a limited and temporary role in redressing demographic imbalances of populations
(United Nations 2000).
A second reason the statist political economy model needs amplification is that not
all states are alike. Liberal states may have different priorities and capacities than those
of authoritarian systems. A comparison of the outcomes of the temporary worker
schemes in Europe and the United States with those run by the Gulf states is evidence
enough of that (Castles and Miller 2003: 12833). If, furthermore, liberal states are
instrumentally or structurally capitalist, as has been argued, then we would expect their
overriding concern to be to provide ample, flexible labour for capitalist interests
(Castles and Kosack 1985). On the other hand, liberal states should, in principle, be
both more inclined and under greater pressure to compensate immigration losers
(Hollifield 2004). They might also devise immigration policies to diminish the costs to
domestic labour: limiting admissions to skilled labour, for example, mounting highly
selective policies that privilege migrants targeted to niches where labour markets are
tight, or recruiting temporary labour without political rights.
The statist perspective also invites analysis of the interaction of states, especially
strategies of competition over the recruitment of skilled migrants and the incentives
of states to enter into free migration regimes. Meyers (2002) explores this topic by
comparing international labour regimes in several regions. Geddes (2000b) treats the
role of state interests in immigration policy in shaping preferences for a community
policy in the European Union. From the aggregate gain perspective, the key question
Journal of Ethnic and Migration Studies 667
may be how the reciprocity these arrangements are meant to establish affects access to
migrant labour and the nature of compensation available for ‘losers’.
Borjas 2002; Reitz 1998). Hanson (2005) shows for the United States that migrant
welfare programme participation varies modestly over time but tends to substantially
outstrip native use (2005: 28). However, migrant welfare participation rates vary
widely across the states. The imputed fiscal burden of immigration on states is a
function of the size and characteristics of the state’s migrant population (especially its
average skill endowment) and the generosity of the state’s welfare programmes.
Hanson shows that the immigrant fiscal burden is much larger on the high welfare/
high immigration states of New York and California than it is on the low welfare/high
immigration states of New Jersey, Florida, Texas and Arizona (2005: 37).
Comparative data on the link between public perceptions of immigrant use of
public benefits and support for the welfare state are scarce and contradictory
(Brücker et al. 2002; Fetzer 2000). Whether immigration is playing a role in eroding
support for the welfare state among native voters is an important question that is
inherently difficult to answer and that has been too little studied. Bommes and
Geddes (2000) and Banting (2000) avidly contest the notion that there is any evidence
to support the claim. On the other hand, Hanson (2005) and Hanson et al. (2005)
present evidence consistent with the interpretation that welfare reforms in the United
States in the 1990s that sought to reduce immigrant access to benefits had the effect
of reducing high-skilled natives’ support for immigration restrictions.
Moving beyond the internal structure of state authority, we can examine variations
in the structural relationships between states, capital and labour. Advocates of
‘varieties of capitalism’ identify two types of political economy: the coordinated
market and liberal market (Hall and Soskice 2001). This typology focuses on the
means by which firms in different countries resolve coordination problems with
respect to their core competencies (industrial relations, corporate governance, inter-
firm relations, and relations with their own employees). The approach offers micro-
foundations to explanations of why national responses to globalisation vary along
predictable lines. Another common typology distinguishes between social demo-
cratic, corporatist, and liberal political economies or welfare states (Esping-Andersen
1990; Wilensky 2002). Neither the ‘varieties of capitalism’ literature nor welfare-state
typologies have systematically considered the implications of their models for
responses of firms or states to international migration. It seems plausible that states
more closely linked institutionally to organised labour and business, and committed
to national-level bargaining over economic and social policy, would develop
distinctive migration policies. For example, coordinated market economies might
be expected to pursue stricter enforcement of labour market regulations and more
aggressive development of activist labour market policies. These should reduce the
likelihood of the emergence of dual labour markets and large underground sectors
dominated by immigrant workers. Liberal market economies, for their part, can be
expected to tolerate higher levels of illegal immigration, more unauthorised labour,
and more business activity of questionable legality (Freeman 2004: 9535).
Political parties are key institutions in the process by which immigration policy is
formulated, but because they aggregate blocs of voters and organised groups they
Journal of Ethnic and Migration Studies 669
Economic models suggest that class cleavages, especially those between skilled and
unskilled labour, on the one hand, and organised labour and organised employers, on
the other, are at the heart of immigration policy contestation. Labour market and
trade theories predict who should experience concentrated or dispersed gains and
losses from migration. Work combining these theories with interest-group analysis
goes on to ask how groups mobilise or fail to mobilise to defend their interests. The
chief advance of this combined perspective over either of its components is
recognition that wage and income effects predicted by economic theory are not
automatically translated into political demands. Political analysis of interest groups is
supplemented, on the other hand, by theoretically driven expectations of the likely
benefit/cost consequences of migration of skilled or unskilled labour.
Pioneering work on the economic sources of individual attitudes towards
immigration has been done by Scheve and Slaughter (2001) and O’Rourke (2003).
Using public opinion polls conducted in the United States, Sheve and Slaughter find
support for hypotheses derived from the Heckscher-Ohlin and the proportional
factors trade models.8 Specifically, they find that there is a robust skills cleavage over
immigration policy, with highly skilled workers being less likely to support
restrictionist immigration policies and low-skilled counterparts more likely to do
so. These findings follow from the two models’ hypothesised effects of immigration on
workers at different skill levels. Their findings suggest ‘the potential for immigration
politics to be connected to the mainstream redistributive politics over which political
parties often contest elections’ (Scheve and Slaughter 2001: 144). O’Rourke (2003)
points out that Scheve and Slaughter cannot adequately test the H-O model with data
from a single country. The theory predicts that the impact on immigration attitudes of
being skilled or unskilled should depend on a country’s skill endowments, with the
skilled being less anti-immigration in more skill-abundant countries than in more
unskilled-labour-abundant countries. O’Rourke tests the model against data from 24
countries with varying skill endowments (proxied by GDP per capita). He finds strong
support for the hypotheses as they relate to attitudes toward globalisation, but less
impressive support for his hypotheses on immigration attitudes. However, his data
confirm the theory’s prediction that, other things being equal, a person who is
protectionist is also likely to be anti-immigrant, and vice-versa.
Missing from these intriguing studies, of course, are propositions about the likely
political expression and impact of the preferences opinion polling uncovers. If
immigration policy were set by referendum, then the median voter would decide
policy (see McGann 2003 for a critique of median voter models applied to
immigration). Except for Switzerland, however, immigration policy is made through
legislative and executive bodies that are more or less constrained by electoral
competition that is typically decided by issues unrelated to immigration. In the
legislative, administrative and electoral process the interests of organised groups are
more important than the opinions of individuals. Economic theory has the most to
say about the likely preferences of labour and capital; in contemporary democracies
this means the trade unions and employer federations.
Journal of Ethnic and Migration Studies 671
At their most basic, economic models predict that trade unions should resist
immigration because it imposes downward pressure on wages. The introduction of
the idea that skilled and unskilled workers may have contrasting interests over
immigration, and that this might depend on the skill endowments of the countries
involved, greatly complicates the matter. Research should, following this line of
reasoning, concentrate on whether a country’s trade unions are organised along skill
lines, how densely organised the workforce is, and how cohesive trade federations are.
Most research in the rich Western countries shows that trade unions have
traditionally taken a protectionist stance toward immigration. This has at times
involved tolerance of migrants where they are guaranteed national-level wages and
conditions, or where their recruitment is carefully targeted toward sectors with
demonstrable shortages. In terms of our models, trade unions have tolerated
immigration that is complementary to national labour, and opposed immigration
that substitutes for it. Recently, some scholars have argued that the unions have
undergone a change of heart and have embraced a more liberal view of immigration
(Haus 1995; Watts 2001). While these studies point to puzzling and important
developments in immigration politics, they have not advanced convincing explana-
tions for them. Perhaps the trade unions have become more enlightened, perhaps
they have resigned themselves to the inevitability of migration and are making the
best of a bad situation, or perhaps the skill mix of contemporary entrants has
modified their economic costs and benefits as experienced by labour.
Freeman (1995; cf. Wilson 1980) predicts four modes of politics reflecting patterns
of cost/benefit consequences of migration and the incentives they produce for
individuals and groups to mobilise politically. Concentrated benefits and diffuse costs
produce client politics dominated by beneficiary groups; diffuse costs and benefits
yield majoritarian politics with no clear winners or losers; concentrated costs and
diffuse benefits produce entrepreneurial politics as adversely affected groups seek to
escape bearing the burden of policies; and concentrated costs and benefits spawn
interest-group competition between roughly evenly matched adversaries.
A major deficiency of the model was the absence of theoretically driven
expectations as to whether immigration produces concentrated or dispersed costs
and benefits (McGann 2003). The introduction of wage and income effects is a
promising avenue for clarifying these matters. Our previous discussion of the
significance of the size of migration’s wage and income effects is relevant to the issue
of the concentration and dispersion of benefits and costs. What is required is the
addition of characterisations of interest-group configurations, in particular political
systems. The concentration or diffuseness of effects, in this analysis, depends on the
concentration and diffuseness of the interest groups affected by them (that is, if the
number and range of groups is small or large and if the groups are themselves
strongly organised or not). Consider a 2 2 matrix with economic cost (benefits) and
political mobilisation on the axes. If economic costs (benefits) are large and political
groups concentrated, we get client politics. If economic costs (benefits) are large and
political groups diffused, we get interest-group politics. Where economic costs
672 G.P. Freeman & A.E. Kessler
Table 3. Wage and income effects, political mobilisation and modes of politics
Political mobilisation
Concentrated Diffuse
(benefits) are small and political groups concentrated, entrepreneurial politics should
follow; and small-cost (-benefit) diffuse groups should yield majoritarian politics. We
predict the same four modes of politics as in Freeman (1995), but with different
characterisations of the independent variables (see Table 3).
It is a commonplace that immigration politics produces ‘strange bedfellow’
coalitions. Zolberg (1999) conceives of these as involving a matrix that includes the
putative economic effects of migration intersecting with their putative political/
cultural effects. In the area of the matrix where both are positive, he predicts
‘immigrationist’ coalitions composed of co-ethnics, cosmopolitans, employers and
transporters. In the area where both are negative, he predicts ‘restrictionist’ coalitions
made up of native workers, local authorities and traditional nationalists. Tichenor
(2002) suggests an alternative framework based on attitudes toward immigration
admissions and immigrant rights. Those favouring open admissions and expansive
rights for immigrants are labelled cosmopolitans; those favouring restrictive
admissions and expansive rights are nationalist egalitarians; those favouring
expansive admissions and restricted rights are free market expansionists; while those
favouring both restrictive admissions and restricted rights are classic exclusionists.
These groups yield what appear to be unnatural coalitions between liberal
cosmopolitans and business, for example, or between trade unions and classic
exclusionists. Both Zolberg and Tichenor tap into the interplay between economic
and political/cultural concerns. Both frameworks might be improved by a
consideration of the diverse political consequences of fiscal versus wage effects.
Introducing fiscal effects into the analytical equation increases the number and
range of interests potentially drawn into the political arena. As noted above, the most
important examples are tax-payers and the residents and governments of local areas
sharply impacted by immigration. The central point to register in this respect is that
fiscal issues cut across the class and sectoral lines established over wage and income
effects. Perceptions that large-scale immigration is connected to rising costs of public
services can stimulate middle-class tax revolts among voters who might normally be
supportive of immigration. Working-class voters may join a cross-class coalition in
demanding relief from the fiscal burden of large-scale migration in high impact areas.
Fiscal costs can pit service payers (tax-payers) against service providers (bureaucrats,
teachers, etc.) who argue for expanded budgets to meet immigrant demand.
As is the case with economic effects, the public perception of the fiscal effects of
immigration is not fixed, but can be deliberately shaped by interested lobbies, the
Journal of Ethnic and Migration Studies 673
media, think-tanks, and politicians. Following the logic laid out above with respect to
wage and income effects and interest groups, we anticipate that, whether fiscal effects
are perceived to be large or small, whether their costs and benefits are concentrated or
diffuse, and whether they fall on concentrated or diffuse interest systems, will
determine the dominant mode of politics that will ensue.
Conclusion
The political economy of migration policy is a fertile field not yet fully cultivated.
Economists are increasingly asking political and policy questions and incorporating
political variables into their models. Political scientists are moving in the same
direction, but could benefit from more systematic testing of economic hypotheses
wedded to political propositions. This will require a more careful and self-conscious
elucidation of political models of migration politics as much as the borrowing of
concepts from economics. Specifically, political scientists must address where
individual preferences on migration policy come from and how these are aggregated
and processed via interest groups, institutions and states. Our partial and brief
consideration of the analytical terrain in the field of migration politics reveals its
relatively undeveloped state. The three perspectives we introduced often do little
more than identify a basket of potential independent variables with modest effort to
stipulate how and when they come into play.
Our review of attempts to interpret comparative immigration policy outcomes via
trade, labour market and fiscal theoretical premises has uncovered significant
relationships and suggestive data. Nonetheless, in a number of cases it seems
apparent that economic models can only partially account for outcomes, in some
cases perhaps not at all. These findings point to the need to take the political
dimensions of migration policy into fuller account. Given the ubiquitous discussion
of the economic dimensions of immigration phenomena in the political science
literature, we think it is imperative that the debate be put on a more rigorous and
systematic footing, yielding a more robust political economy of migration.
Notes
[1] For obvious reasons, scholars of immigration have been drawn to the cultural, ethnic and
racial dimensions of migration. We have no intention of denying the relevance of such
perspectives. Indeed, the central thrust of our argument is that neoclassical theory by itself
must necessarily fail to accommodate the complexities involved when immigrant and native
populations interact. Our focus has been on the explicitly political variables*states,
institutions, political interest groups*that come into play in forging immigration policy.
The study of the economic basis of immigration politics should make the importance of
non-economic factors all the more evident.
[2] The economic costs and benefits of immigration are difficult to assess empirically. Borjas
(1999: 6286; 2003) argues that recent immigration to the United States has put downward
pressure on the wages of low-skilled American workers, but see Smith and Edmonston (1997,
173253) and Card (2001) for contrasting views.
674 G.P. Freeman & A.E. Kessler
[3] If one reverses the standard assumption that goods are traded and factors are immobile to
permit factor mobility with goods immobile, the distributional effects of immigration mirror
those of trade (cf. Rogowksi 1989). In general, owners of a country’s abundant factors, or
resources which it possesses in relatively large supply, gain from immigration, while owners
of a country’s scarce factors lose.
[4] This result stems from the model’s strong assumptions about the long-run, product market
disciplining effects of trade and does not hold in models where the number of factors exceeds
the number of goods. See Ruffin (1984).
[5] Kuhn and Wooton (1991) argue that skilled and unskilled labour are extreme factors and
capital the middle factor in the US case. An increase in either low- or high-skilled migration
thus exercises downward pressure on wages while raising the productivity of capital.
[6] Empirically assessing the fiscal effects of immigration is a difficult and contested exercise
(Smith and Edmonston 1997). Research on the US case finds that immigrant-headed
households are more likely to receive public benefits than non-immigrant households (cf.
Borjas 1999; Fix and Passel 2002). Given that immigrants are, on average, less educated and
more likely to experience poverty and lack health insurance than non-immigrants, this
should come as little surprise.
[7] According to the National Research Council’s definitive 1997 study, the fiscal burden of
immigration for taxpayers in US states varies with immigrant population and benefits
eligibility. In California and New Jersey, for example, immigrant-headed households on
average receive net fiscal transfers annually from non-immigrant households to the order of
$3,463 and $1,484, respectively. Fiscal costs are lower in states with smaller immigrant
populations and/or less generous eligibility requirements. When distributed among all US
non-immigrant households, the net impact per household ranges from $166 (New Jersey
estimate) to $226 (California estimate). See Smith and Edmonston (1997: 27094); also
Hanson (2005: 2740).
[8] Technically, the H-O model highlights long-run changes in output or the production
process. Short-run wage effects from migration are better captured by the proportional
factors model.
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