On the Effect of Immigration on Destination: Country Corruption

This paper analyzes the impact of migration on destination-country corruption levels. Capitalizing on a comprehensive dataset consisting of annual immigration stocks of OECD countries from 207 countries of origin for the period 1984–2008, we explore different channels through which corruption might migrate. We employ different estimation methods using fixed effects and Tobit regressions in order to validate our findings. Moreover, we also address the issue of endogeneity by using the Difference-Generalized Method of Moments estimator. Independent of the econometric methodology, we consistently find that while general migration has an insignificant effect on the destination country's corruption level, immigration from corruption-ridden origin countries boosts corruption in the destination country. Our findings provide a more profound understanding of the socioeconomic implications associated with migration flows.

2013

We examine the influence of corruption on migration for 111 countries between 1985 and 2000. Robust evidence indicates that corruption is among the push factors of migration, especially fuelling skilled migration. We argue that corruption tends to diminish the returns to education, which is particularly relevant to the better educated.

Applied Economics Letters, 2013

Proceedings of the International Conference on Business Excellence

Corruption and migration influence the country level of development, so they have been debated and studied for a long time. Has been written a lot about the two phenomena and their relations with many social and economic factors, but the two also influence each other. The higher the level of corruption in a country, the more people will be more likely to migrate and vice versa. This study aims to study the link between the two phenomena considering the countries from Europe, over time, for the period 2008-2016, highlighting the implications in the economy. The variables analyzed are the Corruption Perception Index and the number of emigrants. The methods used are panel regression and cluster analysis and the processing and analysis was performed using the statistical software SAS (version 9.2) and SPSS (version 13 and 25). The findings show that there is a link at European level between the two phenomena, corruption and migration have a similar trend over time, and significant diffe...

Zagreb International Review of Economics and Business

The study intends to investigate the direct and indirect effect of terrorism and corruption on net migration for thirty-eight developing countries, along with other macroeconomic determinants like per capita GDP, globalization, inflation and institutional quality for the time period 1985-2015. Based on the Fixed and Random Effects models, findings show that terrorism and GDP per capita has negative while globalization has positively significant effect on the net migration in selected developing countries. The corruption and terrorism appeared to reinforcing each other in stimulating migration. Particularly, terrorism seeks its ways through corrupt financial activities which distorts the labor market and ultimately results in relatively large out-migration. The study suggests implementation of stiff anti-terrorism policies to improve domestic environment along with promoting globalization in such a way which can offer positive effect of out-migration on the domestic economy in the lo...

The “New Economic Case for Immigration Restrictions” has challenged the consensus view that moving from existing restrictive immigration policies to unrestricted, or free, immigration would generate massive global gains in output— the so-called “trillion-dollar bills on the sidewalk” (Clemens 2011). Those making the new case for immigration restrictions generally posit that factors responsible for the low productivity in immigrants’ origin countries could migrate with immigrants and undermine the high productivity in destination countries, thus wiping out the forecasted trillion-dollar gains. The new economic case for immigration restrictions is an empirical conjecture. However, it was presented (by, e.g., Borjas 2014; 2015) as a theoretical possibility without supporting empirical evidence that immigration has, in fact, carried such a negative externality. The new economic case for immigration restrictions does not specify the channel through which the factors responsible for low p...

Journal of Macroeconomics, 2014

We propose a generalized empirical model for estimating the effect of foreign direct investment on GDP growth rates, as well as for determining the effect of corruption on the growth rate, and on the relationship between foreign direct investment and growth. Our model allows for parameter heterogeneity between all conditioning variables (including foreign direct investment) and growth, as well as in the effects of corruption on growth. We estimate the regression using a recently developed nonparametric method of moments estimator that allows us to concurrently use instrumental variables to mitigate any endogeneity bias that may be present in the relationship between foreign direct investment and growth, and model parameter heterogeneity. We find that there is substantial heterogeneity in the relationship between foreign direct investment and growth, and that foreign direct investment has a positive and significant effect on growth for many of the countries in our sample. Corruption is shown to significantly diminish the effectiveness of foreign direct investment at improving growth rates, but overall has an insignificant net effect on growth.

This thesis aims to explore whether and how (monetary) remittance affects petty corruption in migrants' countries of origin. Specifically, it investigates whether remittance recipients are more likely to pay bribes than non-recipients. Two arguments are put forward. On one hand, monetary remittance facilitates the circulation of positive social remittance from migrants working/residing in less corrupt countries to their families back home, which makes the latter less likely to think that paying a bribe is justifiable, hence lower actual bribe payment. On the other hand, compared to those not receiving remittance, recipients are exposed to a higher probability of being targeted for bribes and, therefore, more prone to pay bribes as the positive social remittances may not be robust enough to replace the particularistic culture of corrupt societies. The results from multilevel modeling of household survey data from 16 countries in Latin America and the Caribbean in 2014 support the second argument. Although I failed to find consistent supporting evidence that those that receive remittances from abroad are also more likely to actually pay bribes, it does not necessarily mean a better state of affairs. Remittance recipients are more likely to find it justifiable to pay a bribe and be targeted for bribe solicitations by public officials than non-recipients. These grim findings may be explained by the combination of limited or weak transmission of positive social remittance and the persistence of the particularistic culture shaping the way a corrupt society functions. The policy implications from this study are essential in the context of numerous efforts to curb corruption and harness the positive gains from remittance in migrants' countries of origin.