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Coordination Failures in Immigration Policy

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  • Paolo Giordani

    ()
    (Università Luiss "Guido Carli")

  • Michele Ruta

    ()
    (World Trade Organization)

Abstract

We propose a theoretical framework for analyzing the problems associated to unilateral immigration policy in receiving countries and for evaluating the grounds for reform of international institutions governing immigration. We build a model with multiple destination countries and show that immigration policy in one country is influenced by measures adopted abroad as migrants choose where to locate (in part) in response to differences in immigration policy. This interdependence gives rise to a leakage effect of immigration policy, an international externality well documented in the empirical literature. In this environment, immigration policy becomes strategic and unilateral behavior may lead to coordination failures, where receiving countries are stuck in welfare inferior equilibria. We then study the conditions under which a coordination failure is more likely to emerge and argue that multilateral institutions that help receiving countries make immigration policy commitments would address this inefficiency.

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Paper provided by Dipartimento di Economia e Finanza, LUISS Guido Carli in its series Working Papers LuissLab with number 1190.

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Date of creation: 2011
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Handle: RePEc:lui:lleewp:1190

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Keywords: Immigration policy; cross-border externalities; coordination failures; multilateral institutions.;

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Cited by:
  1. Floriana Cerniglia & Laura Pagani, 2014. "Political knowledge and attitudes toward (de)centralization in Europe," Working Papers 272, University of Milano-Bicocca, Department of Economics, revised Apr 2014.
  2. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2012. "Visa Policies, Networks and the Cliff at the Border," IZA Discussion Papers 7094, Institute for the Study of Labor (IZA).
  3. Paolo E. Giordani & Michele Ruta, 2012. "Self-Confirming Immigration Policy," CESifo Working Paper Series 3762, CESifo Group Munich.

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