International Migration and Institutional Competition: An Application of Hayek’s Evolutionary Theory

Abstract

In the last decade, the number of migrants on the international level, especially migrants to western welfare states, has increased to unforeseen heights. The United States has experienced a level of legal immigration unseen since the beginning of the century, and the number of illegal immigrants to the US is supposed to have increased as well. Due to liberal asylum laws, asylum-seekers have flooded Western Europe, which has been exacerbated by an influx of immigrants from post-communist countries. As legal immigration is restricted, unregulated immigration takes place, to a large part, under the guise of asylum-seeking, especially in the European states. There are worries that these huge migration flows will be detrimental to western wealth, and that they will prove inefficient worldwide. Therefore, governments are trying to tighten immigration laws, especially in the field of asylum policy. They find support from economists, who propose an international migration order to control migration and to co-ordinate migration policies. Analogous to the GATT, this proposal is named GAMP, the General Agreement on Migration Policies.

It should provide rules of entry permission, rules of exit permission, rules of taxing migration, treatment of foreign labour, and other migration aspects which have to be fixed within this multilateral agreement (remittances, transfers, social rights, pension transfers etc.).¹

The assumption behind the proposal is that unregulated migration is inherently inefficient. Pareto-efficiency, it is argued, would dictate a coordinated regulation of migration.² However, policy coordination always includes the danger of governmental policy cartelization in order to escape from institutional competition. This must be considered when analyzing the GAMP proposal.

However, in assessing the economic effects of the migration of a factor of production, the relevant criterion is not marginal private productivity, but marginal social productivity.

Brinley Thomas (1968, p. 298)

Competition between local authorities or between larger units within an area where there is freedom of movement provides in a large measure that opportunity for experimentation with alternative methods which will secure most of the advantages of free growth.

Friedrich A. von Hayek (1960, p. 263)

The author would like to thank Barbara Dluhosch and Clemens Fuest for helpful comments, as well as the participants of the symposium, especially Louis De Alessi and Stefan Voigt. Major parts of the research were done while the author was Hume fellow at the Institute for Humane Studies, George Mason University, Fairfax, VA. Financial support of the IHS as well as useful suggestions by staff members there are gratefully acknowledged. Errors and omissions remain the responsibility of the author.