Quotation of the Day…

by Don Boudreaux on May 25, 2016

in Competition, Immigration

… is from page 26 of my colleague Peter Leeson’s and GMU Econ alum Zachary Gochenour’s excellent article “The Economic Effects of International Labor Mobility,” which is Chapter 2 of the superb collection (2015), edited by Ben Powell, The Economics of Immigration (link added):

If citizens are mobile and political authorities are concerned with enlarging, or at least preserving, their tax bases, the prospect of inter-jurisdictional migration may improve their incentive to follow those policies their citizens demand.

Traditionally, inter-jurisdictional competition is considered in domestic contexts with reference to the movement of a country’s citizens between federal jurisdictions, such as states, or within states, between municipalities.  However, the mobility of citizens internationally may also be useful to citizens for improving the quality of their countries’ governments.

International labor mobility is nowhere near as great as labor mobility domestically – because of the much more substantial policy barriers to international movement as well as the considerably larger cost of moving to another country for many citizens.  Thus Tiebout competition‘s potential to improve government quality at the national level is surely much weaker than its potential to do so at the local level.  Still, since some citizens in developing countries do in fact migrate internationally, and many more desire to do so, there is reason to think that inter-jurisdictional competition at the international level may be able to affect national government quality to some degree and that reducing policy impediments to international migration could strengthen that effect.

I add to Pete’s and Zac’s point that, despite the naturally higher costs of migrating internationally compared to the costs of migrating intranationally, at the margin the payoff – in terms of improved government behavior – from more international migration is today likely higher than is the payoff from more intranational migration.  The reason is the one highlighted above by Pete and Zac: precisely because policy now puts far higher obstacles to international migration than to intranational migration, international migration has not yet been allowed to put as much “Tiebout” pressure on governments as has intranational migration.


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