Ethics@Work: Ins and outs of immigration

'Beggar thy neighbor' or 'Cut off your nose to spite your face?'

Business ethics 88 (photo credit: )
Business ethics 88
(photo credit: )
Immigration policy is an actively debated issue of economic ethics. A fundamental issue is how we weigh the interests of various groups: the citizens of the host country; the immigrants themselves; and the country of origin. Each group has varying interests: the host country has winners (employers, consumers) and losers (competing workers, often taxpayers); the immigrants themselves would like a free opportunity to earn a living and often the ability to avail themselves and their children of social services (quality free schooling, health care). The country of origin has its own considerations. On the one hand, they are often happy to have opportunities for their citizens in wealthy countries; they may lack work for their own workers and be grateful for the remittances, which in some countries (like the Philippines) are a very substantial piece of national income. On the other hand, they may be jealous of their highly trained workers, who were provided with desperately needed "human capital" at great expense, and be highly reluctant to see their investment siphoned off by wealthy countries. Immigration policies differ greatly in the importance they accord to each of these three interests. In this week's business press, I encountered three different immigration plans with vastly different approaches. Economics Nobel Laureate Gary Becker proposed that the US give special leniencies to encourage highly skilled workers to settle there. This policy would probably be good for the US, but considered in isolation I worry that it is a bad neighbor policy - one that in effect institutionalizes a system where poor countries subsidize rich ones. For this reason, I would call it a "beggar thy neighbor" policy, after Keynes' description of tariff regimes that benefit one country only at the expense of another. The US Congress, in the meantime, is considering a bill that is meant to weigh the interests of US citizens (which they think means limiting immigration to prevent immigrants from driving down wages and becoming a burden on social services) and those of immigrants. It is meant to make legal immigration easier and illegal immigration much more difficult. There is no explicit consideration of the countries of origin but the US is subject to pressure from Mexico and elsewhere to accept some immigrants, and the bill doesn't have significant incentives for brain drain to the US. The problem with the bill is that the expanded mechanism for keeping out future illegal migrants is so expensive (over $10 billion a year) that is hard to believe that the benefit to the US taxpayer is really worth it. That's why I call it "cutting off your nose to spite your face." The European Union, meanwhile, is considering a policy of explicit negotiations with the countries of origins. I am not going to discuss here the specific conditions being suggested, but I think that involving the countries of origin is the only effective way of balancing the needs of the two groups. One problem is that some poor countries have such poor governance that they can't effectively represent the interests of their citizens, but there are some fairly well-governed poor countries (such as India); negotiated agreements with these countries could serve as a model for a general policy that would apply to other countries. I think that the idea of open negotiations between host countries and origin countries of illegal immigrants is the best and indeed only effective way of avoiding "beggar thy neighbor" policies - to ensure that the rich countries are not subsidizing the poor ones, and most of all that the poor ones are not subsidizing the rich ones. The writer is research director at the Business Ethics Center of Jerusalem (, an independent institute in the Jerusalem College of Technology.