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The Political Economy of Immigration, Investment, and Naturalization

Author

Listed:
  • Atisha Ghosh

    (Department of Economics, University of Warwick)

  • Ben Zissimos

    (Department of Economics, University of Exeter)

Abstract

This paper provides the first economics-based rationale for the purpose of naturalization. It presents a new political-economy model of immigration featuring a hold-up problem between the government and capital owners over immigration policy, that causes under-investment in capital. Naturalization plays the role of an institution that the government can use to 'tie its hands' to the presence of naturalized immigrants, partially resolving the hold-up problem. The model is used to explain the Koopmans-Michalowski paradox: that while dictatorships are more open in terms of policies towards immigrants, democracies are more open in terms of extending immigration rights through naturalization.

Suggested Citation

  • Atisha Ghosh & Ben Zissimos, 2021. "The Political Economy of Immigration, Investment, and Naturalization," Discussion Papers 2101, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:2101
    as

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    File URL: https://exetereconomics.github.io/RePEc/dpapers/DP2101.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    hold-up problem; immigration policy; institution; migration; naturalization;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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