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Migration as an antidote to rent-seeking?

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  • Fabio Mariani

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

We develop a new mechanism through which skilled migration may influence economicperformance in the sending country. If agents can choose between acting asrent-seekers and engaging in productive activities, and only productive skills are exportable,a positive probability of migration (to a more secure economy) reduces therelative expected returns from rent-seeking, thus decreasing the proportion of skilledworkers who opt for ”parasitic” activities. Such an improvement in the allocation oftalent may prevail over the loss of skilled workers due to outmigration. However, weshow that this result is not robust to the introduction of endogenous protection. If productiveworkers share their resources between accumulation of productive capital andinvestment in security, prospective migration may induce a weaker protection againstrent-seeking, which in turn might depress average income in the source economy.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00186460.

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Date of creation: Nov 2007
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Publication status: Published, Journal of Development Economics, 2007, 84, 2, 609-630
Handle: RePEc:hal:cesptp:halshs-00186460

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Keywords: Rent-seeking; Skilled migration;

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  1. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
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  4. Panu Poutvaara, 2004. "Public Education in an Integrated Europe: Studying to Migrate and Teaching to Stay?," CESifo Working Paper Series 1369, CESifo Group Munich.
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  9. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 503-30, May.
  10. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
  11. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
  12. Acemoglu, Daron, 1995. "Reward structures and the allocation of talent," European Economic Review, Elsevier, vol. 39(1), pages 17-33, January.
  13. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  14. Frédéric DOCQUIER & Hillel RAPOPORT, 2003. "Endogenous discrimination, migration prospects and the protection of ethnic minorities," Annales d'Economie et de Statistique, ENSAE, issue 71-72, pages 79-95.
  15. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
  16. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  17. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-14, May.
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