April 8, 2006

April 8, 2006 | Commentary on Immigration

Illegal immigrants follow the money

It's no secret that immigration reform lately has consumed and divided congressional Republicans -- and many Democrats. Missing, though, from the emotional arguments concerning amnesty for illegal aliens, guest-worker programs, and a wall along the U.S.-Mexican border is an understanding of why so many risk life and limb to come to the U.S. and what, if anything, we can do about it.

Even a cursory review of immigration patterns here and in Europe shows that people tend to flee regimes with dysfunctional economies that are rife with corruption and heavy-handed government intervention and seek places where the rule of law, respect for property rights, and market economies rein supreme. Most dramatically, more than 10 million have fled Mexico's sputtering economy, where the gross domestic product is only one-sixth that of the U.S. ($5,877 per capita compared to more than $36,000).

Similarly, hoards of citizens from economically moribund nations such as Jamaica (per capita GDP $3,156), Cuba ($2,516), the Dominican Republic ($2,413), El Salvador ($2,129), Guatemala ($1,675), China ($1,179), the Philippines ($1,047), Vietnam ($470) and Haiti ($467) flock to the U.S. Many of these immigrants work long hours in order to send tens of billions of dollars in "remittances" back to desperate family members. Small wonder why, as my Heritage Foundation colleague Steve Johnson points out, Ecuadorians hide in shipping containers to reach America and why one of the most popular Web sites in Venezuela is iwanttoleave.com.

The story in Europe is similar. The United Kingdom (per capita GDP $26,391) attracts immigrants from impoverished Pakistan ($546); France ($22,723) draws them from its former colony of Algeria ($1,916); Spain ($14,709) from Morocco ($1,278), and Germany ($23,002) from Turkey ($3,082).

So long as the leaders of these countries pursue economic policies that suffocate innovation, penalize risk-taking, and ban foreign goods and investment, this flow of humanity to the U.S. will continue. Indeed, according to the Index of Economic Freedom, the annual survey of economic freedom compiled by The Heritage Foundation and The Wall Street Journal, the countries from which we draw our illegal population rank at or near the bottom of the 157 countries surveyed.

Despite having rejected the sort of pro-growth policies long associated with economic prosperity, these and other impoverished nations continue to receive billions in loans and grants -- with few questions asked -- from international financial institutions such as the World Bank and the International Monetary Fund (IMF), as well as from U.S. agencies such as the Agency for International Development. Foreign aid, it seems, resembles our welfare system prior to the 1996 reforms: Needy nations receive generous subsidies from the developed world but are asked to do nothing in return.

All the more reason, then, for lawmakers to jettison this failed model and insist that all future loans and grants be contingent on the recipient nations adopting specific free-market reforms. They must recognize property rights, eliminate corrupt judicial practices, lower tariff and non-tariff barriers to trade, make regulatory policies on businesses, banks and labor markets less intrusive, and lower the fiscal burden of government. Think of it as an international version of welfare's requirement that recipients work in exchange for their benefits.

According to William Easterly, a former World Bank official, the developed world has dispensed $2.3 trillion to developing nations over the last half century. Yet, as he points out in his excellent new book, "The White Man's Burden," despite trillions in aid, economic opportunity in the majority of countries where foreign-aid bureaucracies have intervened has actually deteriorated.

What can lawmakers do? Efforts are underway in Congress to authorize yet another round of funding for the World Bank and the IMF to replenish their coffers in anticipation of still more debt relief for poor countries. This offers lawmakers frustrated with the current immigration policy wars the chance to open up a new and promising front. Congress should attach restrictions to the release of those funds. Bar the Treasury Department from releasing the U.S. contribution to the international development banks until they agree to restrict future foreign assistance to only those countries that adopt pro-growth economic policies.

Sure, even if wildly successful, this is still only a long-term solution to a problem now pitting Americans against one another. But the rising tide of economic freedom may offer the only way to ultimately reverse the current unsustainable volume of illegal immigration into America.

Mike Franc, who has held a number of positions on Capitol Hill, is vice president of Government Relations at The Heritage Foundation.

About the Author

Michael Franc Distinguished Fellow
Government Studies

Related Issues: Immigration

First appeared in Human Events Online