Immigration and the Institutions of Freedom

One of the perennial worries about immigration, especially from libertarian/conservative types, is that it will corrode the foundations of a free society. Using the Economic Freedom of the World Index, Clark, Lawson, Nowrasteh, Powell, and Murphy find no evidence for this fear. Countries that accept more immigrants tend if anything to grow in economic freedom:

The economics literature generally finds a positive, but small, gain in income to native-born populations from immigrants and potentially large gains in world incomes. But immigrants can also impact a recipient nation’s institutions. A growing empirical literature supports the importance of strong private property rights, a rule of law, and an environment of economic freedom for promoting long-run prosperity. But little is known about how immigration impacts these institutions. This paper empirically examines how immigration impacts a nation’s policies and institutions. We find no evidence of negative and some evidence of positive impacts in institutional quality as a result of immigration.

The published paper is here.  An ungated version is here.

Comments

So if you transport 50M Filipinos and 100M Pakistanis (about half the population) to the USA, they all will behave like Americans? Why not do the easier thing then and make the Philippines and Pakistan the 51st and 52nd states? Same thing yes? Or is this like the old rule about dispersing ghettos amongst the population will make blacks behave better? Racism noted... self-recommending!

I think he's saying that running child sex rings doesn't "corrode the foundations of a free society" or that there is "no evidence" that it does (evidence is something published in a professional journal and mentioned in the abstract).

Perpetually, the white man is kicking the black. The wrong-people-that-run-everything are bringing in millions of Chinese, Filippinos, Guatamalans, Hondurans, Mexicans, Pakistanis, et al to keep down the black man.

What you're talking about is something completely different. Transporting half the population of the Philippines and Pakistan (unlikely) and dispersing ghettos (happens now) is something that could only happen by government engineering.

I think what they're talking about is something that happens more naturally.

The one foreign nation with Open Borders with the United States is Puerto Rico. A sizable majority of Puerto Ricans now live on the Mainland, despite massive tax subsidies to industry to create jobs in Puerto Rico to encourage them to stay home.

It's hard to see why the rest of the world wouldn't react like Puerto Rico did to Open Borders with the United States.

As if anyone doubted for a second what sort of person you are - why not talk about how the U.S. has open borders with various Indian nations, and take it from there?

Really, let the good times roll.

Translation: "Ooh that bad Steve Sailer man just said something really really mean! I'll just, well I'll just mutter something incomprehensible - that'll show him!"

A sizable majority of Native Americans now live outside their tribal lands, despite massive subsidies of every kind to encourage them to stay home.

And what ziel said.

Those tax subsidies are mostly gone which is why Puerto Rico has been in a severe recession for 10 years

Are you sure? I belive the main subsidy was the indirect one - through the corporate taxes: MS would locate its Windows CD printing facility in PR, claim that most of its profits are generated there, pay the income taxes in PR and deduct that amount from overall corporate taxes being due to the US Treasury. I know MS doesn't print many CDs any more, but was this tax break repaled?

@ Jamie: yes it was

>worries about immigration.... it will corrode the foundations of a free society.

Strawman much? Jesus.

No one has worries about immigration. Can you guess which word you have conveniently left out in order to ignore people's valid concerns?

Furthermore, those who correctly point out that the United States ought to have a border are not standing around saying "... because I fear the lack of it will corrode the foundations of this free society."

But I thank you for intentionally trying to cloud the issue. It's just so helpful.

Some people do worry about the levels of legal immigration.

Some people do worry that immigration will undermine the institutions underpinning a society.

As a Brit I assumed the word he was looking for was 'Unrestrained'/'Uncontrolled' immigration, as that's the main talking point here.

Maybe. It wasn't totally clear to me.

It's the end of the world as we know it.

It's always the end of the world as we know it. The only constant is change.

Change is constant. We should still prevent major catastrophes like pandemics and the extinction of western civilization.

Agreed, thankfully pandemics are extremely rare and the end of civilization rarer still.

It depends on the meaning of is. In this paper, the authors equate positive impacts from immigration with "economic freedom". What is "economic freedom"? Lower taxes and a reduction in the size of the welfare state. Of course, one man's economic freedom is another man's bondage. Ho hum.

The study found that countries receiving more immigrants between 1990 and 2011 became slightly more economically liberal over that time period compared to countries receiving fewer immigrants. Recent immigrants are unlikely to manage to take hold of the levers of power and influence a nation's economic policies, so greater levels of immigration may be just a reflection of general liberalization rather than a cause of liberalization.

The authors suggest that "[i]mmigrants do not appear to bring a desire with them for the corrupt, highly regulated environment from which they often emigrate." I doubt that people in corrupt countries really want to have corrupt institutions. It's just that the tribal and familiaristic set-up of many societies makes the creation of fair and transparent institutions difficult if not impossible.

To the extent that immigrants retain their culture, they are likely to recreate the corrupt institutions of their home countries. However, this is unlikely to affect national institutions of host society until the immigrants become demographically and politically prominent. If you want to study the impact of recent immigration on institutions, you should study local institutions where immigrants actually may have power, rather than national institutions on which they are unlikely to have any direct effect.

Here's an account of my 2006 jury duty in downtown Los Angeles on the trial of an Iranian immigrant used car dealer who got let off despite the firm he headed stealing $2 million in sales tax from the state:

http://www.vdare.com/articles/diversity-is-strength-its-also-extended-crime-families-tax-fraud-and-hung-juries

Haha, good one. You basically voted for a hung jury, necessitating another costly trial, because you put words in the prosecution's mouth (by your own admission they did not do a good job explaining why the accused was guilty, "If the prosecution didn`t explain it to them well enough for them to understand it, they weren`t going to think about it"), and you are anti-immigrant and anti-tax evasion. Way to go SS SS for using public money and resources to confirm your own bias. As comedian and late night talk show host D. Letterman once said, if they whole world seems wrong, maybe you're the one that's wrong.

The prosecutors did an adequate job of explaining to me what the Iranian used car dealers were up to, but then I have above-average comprehension skills. Most of the jury didn't have the brainpower or English language skills to make sense of it, except for the Bulgarian used car salesman and Chinese accountant, and the Bulgarian used car dealer was never going to vote to convict a fellow immigrant used car dealer.

It is the prosecution's job to convince the jury. As written, it said "Nobody else [on the jury] saw it as his or her duty to figure out what the story was," which is not the duty of juries. They aren't detectives; the investigation should have already happened, and the detectives present the evidence to the jury so they will convict. If the prosecution can't get its act together, then not guilty.

@Dan Weber,

Assuming Steve Sailer is stating the facts of the case accurately and without omissions, it seems to me that the prosecution had to prove two things: 1) the dealers paid amount 'X' in sales taxes, whereas if one were to use KBB valuations, the amount owed would be 'Y', 'X' being significantly less than 'Y', and 2) the guy being charged (as opposed to his absconding brother-in-law) had some operating control of the company, and hence was liable for its transgressions. The first ought not to be hard to prove at all, just a high enough difference in the amounts should be enough for reasonable doubt (or preponderance of evidence, I'm not sure which one applies in this case). The second might be harder to prove without adequate documentation, but if such incriminating documents didn't exist, the prosecution would have been stupid to take the case to court in the first place.

The state presented tons of boring evidence that firm had pocketed $2 million in sales tax it had collected from customers. And it proved that the guy on trial was the legal owner. The defense countered that he wasn't the brains of the operation, that was his brother-in-law whom he had to front for because he had been banned for life from the used car business. Once back in the used car business, the banned for life crook began behaving in a weaselly fashion, eventually fleeing back to Iran, leaving the non-brains as the legal representative of a criminal firm.

And Casey Serin was never charged at all, which is an even better way of being let off - http://en.wikipedia.org/wiki/Casey_Serin

A chain that stretches from Serin to any financial institution that loaned him money.

Oddly enough, ending up with a group of people that did not need to be immigrants to pull off truly majestic amounts of documented fraud (assuming that any prosecutor had ever bothered to ask for the records), while handing themselves literally hundreds of millions of dollars as bonuses.

As an immigrant myself, I remember living in a refugee camp and agonizing about which country would be the best destination for my family. We contemplated staying in Europe (going west), but also Australia, South Africa, Canada and the US. The economic freedom of our possible destinations definitely factored into our ultimate choice. I'm saying that I think it's more plausible that the observed correlation is explained by immigrants preferring to enter countries that are liberalizing, rather than the influx of immigrants causing the liberalization.

Another way to explain the correlation is that governments that are liberal about accepting immigrants are also likely to be liberalizing economically. We might be observing facts about political alignment, not about immigration effects.

In other words, one may find correlation between a metric of economic freedom and immigration, but the direction of causation may be reversed from what Tabarrok simply presumes. It's seems reasonable that people don't want to immigrate to bad places with low levels of freedom.

There is an interesting discussion here:

http://marginalrevolution.com/marginalrevolution/2015/05/why-is-libertarianism-such-a-target.html

To better inform this null finding, I suggest you investigate the 20th century history of Argentina.

That is not a very good paper. The categories are way to coarse.

A few relevant quotes from the Routledge Handbook of Civil Wars:

"[One] part of the demography-conflict literature has explored the role of population movements. Most of this literature […] treats migration and refugee flows as a consequence of conflict rather than a potential cause. Some scholars, however, have noted that migration, and refugee migration in particular, can spur the spread of conflict both between and within states […]. Existing work suggests that environmentally induced migration can lead to conflict in receiving areas due to competition for scarce resources and economic opportunities, ethnic tensions when migrants are from different ethnic groups, and exacerbation of socioeconomic “fault lines” […] Salehyan and Gleditsch (2006) point to spill-over effects, in the sense that mass refugee migration might spur tensions in neighboring or receiving states […] Based on a statistical analysis of refugees from neighboring countries and civil war onset during the period 1951–2001, they find that countries that experience an influx of refugees from neighboring states are significantly more likely to experience wars themselves."

"the PITF [ Political Instability Task Force] dataset provides an accounting of the number of domestic conflicts that occurred in any given year between 1960 and 2009. […] Between 1960 and 2009 the modified dataset includes 817 years of ethnic war, 266 years of genocides/politicides, and 477 years of revolutionary wars. […] Cases were identified as religious or not religious [...] The results show that both numerically and as a proportion of all conflict, religious state failures (which include both religious identity conflicts and religious wars) began increasing in the mid-1970s. […] As a proportion of all conflict, religious state failures continued to increase and became a majority of all state failures in 2002. From 2002 onward, religious state failures were between 55 percent and 62 percent of all state failures in any given year. [...] Between 2002 and 2009, eight of 12 new state failures were religious. [Every single one - Ivory Coast, Iraq, Sudan, Pakistan, southern Thailand, Yemen, Ethiopia, and Chechnya, Dagestan, and Ingushetia - involves muslims]. [Toft et at.] found that religious conflicts – defined as conflicts with a religious content – rose from 19 percent of all civil wars in the 1940s to about half of civil wars during the first decade of the twenty-first century. Of these religious conflicts, 82 percent involved Muslims."

Many immigrants aren't fugitives, but talking about fugitives seem to be all the rage in Europe these days because of what's going on in the Mediterranean region at the moment so I figured this might be relevant.

When you've read literature on stuff like what I just quoted above, you get a bit skeptical about results like the ones presented here. If the data you look at suggests that immigration may improve institutional quality, you may need to think really hard about what your data is, and is not, measuring.

Then again if one thinks Sharia law is an improvement upon Western approaches to justice and law, immigration may well lead to institutional improvements.

Very weak paper that ignores selection bias given current policies as well as showing very weak positive correlations.

There's nothing about addressing genuine open borders. But assume the best case that there is a 4/5 chance things will work out. That's more than significant. But we could still claim that a one in five risk is so catastrophic, it's worth paying a high price for it. Risk aversion is relevant and Alex won't be able to unravel his policies if things don't work out as planned.

After all Tyler likes to argue for caution re: global warming. But the odds of that turning out as bad as a bad case for open immigration in the medium term are much much lower.

The evidence from the last 50 years in California suggests that more immigration correlates with more cheating on taxes and more violation of safety and fair play regulations, while the natives impose more regulations, especially environmental rules. Which is vice and which is versa is of course hard to say, but it seems plausible that there would be less desire for government micromanagement if millions of people weren't moving in from all over the world, especially from those parts of the world where only suckers give the other guy an even break.

US history refutes the paper. There are plenty of examples, but you can start with the shift in California politics in the 20th Century.You can even stick to migration of within the US. It isn't long time New Hampshire natives that pushed for an income tax there, it was Massachusetts transplants. Or next time you have a meeting of pro-economic freedom libertarians, ask for their demographic information and see what year in history it most resembles.

Republicans carried California's huge number of Electoral Votes 9 out of 10 times from 1952 through 1988, but 0 out of 6 times since.

When Texas eventually goes Democratic due to immigration, we'll be a One Party State for the Presidency.

Ron Unz has given his own take on this flip many times, recently in the comments section of your blog posts too. Do you agree with his assessment?

Charming but useless.

The real debate is beween Red Model immigration in Texas and Blue Model immigration in California.

Both are dealing with massive influxes of low-skilled Mexicans. The political leaders of Texas are trying assimilate them and desire to move them into the economic mainstream and ulitmately the middle class. The political leaders of California reject assimilation and desire to put them into a sort of state-managed peonage or welfare bondage.

These models are having very different outcomes for Economic Freedom, as the last 20 years history of these sates shows ....

Texans seem convinced they can "do immigration right." If they turn out to be wrong, and I think that Blue strip along the Rio Grande may be a harbinger, then that's a lot of repercussions for the rest of us.

Speaking of the Valley, there is a whole cottage industry of Medcaid/Workers Comp/Health Care/Dental fraud there (an order of magnitude larger than the rest of Texas, literally). Everybody is in on it - providers, politicians, and the "patients". Either an "institution" was imported, or there is something in the soil.

Rio Grande Valley or San Fernando Valley? It's all kind of the same.

Here in the S.F. Valley, Medicaid fraud is big business. Armenian immigrants from the Soviet Union tend to to provide the brains of the operation, but their underlings in ripping off American taxpayers are remarkably multicultural.

Rio, but its heartening to know that we are not hogging all of the fun!

Texas does not really have a choice because of current federal immigration policies. They can only continue to do what they are doing and hope for the best.

Abbott got a majority of Latino males in the last election so maybe it is working. [Though we can't be sure the Dems will continue to nominate candidates as bad as Abortion Barbie.]

"The political leaders of California reject assimilation and desire to put them into a sort of state-managed peonage or welfare bondage."

I'm a conservative, but sheesh, what an unfair characterization.

Conservatives, bringing toy knives to a gunfight.

All those state parks on the San Francisco Peninsula are there for a reason.

Claifornia's political class talks about upward mobility, but they've produced an economic climate where working class and entry class people simply cannot get ahead via private sector employment, while turning public education and human capital building institutions into dead end dumps run for the indsiders.

Meanwhile, every working or entry class person needs some sort of state assitance for their whole lifetimes, and that asssitance is wrapped up in complex and ever changing rules, meaning that everyone is always in danger of loosing those benefits. Nativeborn migrants like the Oakies would never have put up with that, but California's political class is betting Latinos will - because they have so far

Add in the idea that assimilation is morally wrong and it becomes OK that Latinos will never get the language or human capital skills needed to fully participate in politics.

Thus a permanent semi-underclass of state-managed peonage or welfare bondage is created, very useful to the permanet politcal class.

The top five politicians in California are all 70-something Bay Area Catholic or Jewish Democrats. So far, Mexicans haven't provided much competition, but eventually the Brown/Pelosi generation will drop dead and Latinos will inherit. We're seeing that already in Los Angeles where the Waxman-Berman Machine is getting squeezed out due to age and demographic change.

The future in California will probably be ideologically similar, just more corrupt and less competent.

@CMOT, I largely agree about the effect of leftist policies, but that is different from saying the intent of these policies is to keep people in bondage.

Post-2008 history suggests that Mexicans don't have all that much of a future in high cost Blue States. They were handed their chance on a platter, but blew it in the Mortgage Meltdown. (Cubans, though, may prove more formidable.)

In Los Angeles and New York by the middle of the century, Asians and Middle Easterners are more likely than Latinos to displace Jews as the top dogs. The dispute over the anti-Israel BDS resolution at UCLA among student politicians is a harbinger of the battles to come by newcomers to push Jews out of power in Blue States.

These people have no idea; they string together some macro statistics to get the conclusion they want. The net-immigrant countries are Anglo-European with a classical liberal tradition and strong, centralized states. The city-state of Singapore is actually quite authoritarian. Incidentally, Renaissance/Enlightenment city-states used to ban individuals.

Immigration is political and cultural suicide for libertarians. Alex is speaking from an affluent academic bubble, itself enabled by a huge government footprint in financial and education markets. For the schleps, immigration means lower wages, lower property values, and corroded social trust. The academics are just banking on being on the right side of the fence from the favelas.

One of the perennial worries about the demographic transformation of America and other White countries, especially from nationalist/conservative types, is that it will corrode the foundations of a free society. Using the Economic Freedom of the World Index, I found much evidence for this fear. Countries that are demographically dominated by NW Europeans are almost always ranked as either "free" or "mostly free," the only exception being Belguim, which is mixed between Flemish and Wallonian. In contrast countries dominated by Asian, Latin American, Middle Eastern, and Black populations are almost always ranked as "moderately free," "mostly unfree" or "repressed."

http://www.heritage.org/index/images/book/2013/region-web-map-WORLD-large.jpg

Seems logical that the more diverse a society becomes, the more conservative it becomes, since the mainstream group will care less about helping the peripheral groups. We see this in US states, where the most ethnically diverse states are the most conservative, while the whitest are the most liberal.

But what happens if/when the mainstream culture loses political dominance? Seems reasonable the formerly peripheral groups would want to payback the formerly mainstream culture for its selfish, conservative policies.

If you look, you may notice that the President of the United States is already about as peripheral as a straight male American citizen can be. And much of what you read in the newspaper everyday about the horribleness of cisgendered straight white males is rationalized as payback for the horrible crime of building a great country, but is really tactics to keep the Obama Coalition of the Fringes from turning on each other by ginning up hatred of the Core.

What happened to Illinois?

This is fine until they learn they can vote themselves a raise. Just don't give them the right to vote.

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Anything by Alex Nowrasteh should be treated as corporate propaganda, not actual "analysis." This guy pumps out propaganda pieces like it's his job -- because it IS his job.

Just check out his "analysis" on H-1B visas. The mental gymnastics needed to reach his conclusions is astounding. He ignores any data that contradicts his position.

That is all.

-Derpus

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