Migration's New Payoff

Devesh Kapur and John McHale argue in their Foreign Policy article that remittances are one of the best byproducts of migration. They note that remittances are the most stable form of financial flows because it does not go through any third party institutions, but rather from one individual to another. Government bureaucracies do not complicate the process and corrupt governments cannot get a hold of the money. The receiver also obtains the money at no cost, unlike other forms of international money transfers that are subject to interest payments with loans, or profit repatriation with investments. Kapur and McHale attribute the large volume of remittances mainly to the continually increasing tide of migration, but also to new infrastructure allowing for easier and more efficient money transfers. Another major point they make is that remittances may be helping to lift communities or even entire countries out of poverty. By raising the level of national savings and access to foreign exchange, the major economic outcome of immigration may be helping to stem the need for it in the first place. Finally, although many advantages exist in having remittances serve as a replacement for foreign aid, this is unlikely to occur mainly because developing countries would be unwilling to adopt the necessary threshold of liberal immigration policies.