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A Political Economy and Voicing Model of the Institutional Impact of Brain Drain, Human Capital, Inequality and Country Size

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  • Docquier, Frédéric
  • Schiff, Maurice

Abstract

Brain drain BD, human capital h, and inequality's institutional impact is examined in a model where a rent-seeking elite taxes residents and voicing affects the likelihood of regime change. We find that BD and h's impact on institutional quality (Q) are as follows: i) Q is a U-shaped function of BD, with maximum (minimum) at BD = 0 (0 ) BD1, and is maximized at BD = 0; vi) Q increases in a high (low) BD country under a host country's immigration promotion (restriction); vii) a high BD country's institutions improve (worsen) under a large (small) reduction in BD; viii) the latter is particularly relevant for small and micro states where BD and Q are likely to be greater than in large but otherwise similar countries.

Suggested Citation

  • Docquier, Frédéric & Schiff, Maurice, 2021. "A Political Economy and Voicing Model of the Institutional Impact of Brain Drain, Human Capital, Inequality and Country Size," GLO Discussion Paper Series 866, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:866
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    1. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    2. Docquier, Frederic & Rapoport, Hillel, 2003. "Ethnic discrimination and the migration of skilled labor," Journal of Development Economics, Elsevier, vol. 70(1), pages 159-172, February.
    3. Maurice Schiff, 2017. "Ability drain: size, impact, and comparison with brain drain under alternative immigration policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1337-1354, October.
    4. Maurice Schiff & Frédéric Docquier, 2016. "Institutional Impact of Brain Drain, Human Capital, and Inequality: A Political Economy Analysis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 53(1), pages 95-110, December.
    5. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
    6. Kugler, Maurice & Rapoport, Hillel, 2007. "International labor and capital flows: Complements or substitutes?," Economics Letters, Elsevier, vol. 94(2), pages 155-162, February.
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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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