Migration and development interaction

The non-consensus over the definition of the development in the first place has led to play a role in migration and development interaction debate as well. The debate on migration and development interaction is deeply rooted in literature, dominantly influenced by two contradictory and opposing schools of thought. The development theory is, in general, an agglomeration of many socioeconomic oriented theories that perceive migration as developmental or as developmental towards underdevelopment/non-developmental for the origin societies. Such contradictory perspectives of migration and development interaction remained even more compelling in the context of international migration during the last century.

de Haas (2010) described these conflicting theoretical perspectives as an outcome of the changing paradigms in the social theory, tendency of investigating causes and effects of migration separately, differing disciplinary orientations and varying levels of analyses. He critically evaluated the migration and development related theories from the time of post-World War II to year 2007 and identified four distinctive periods of time phases promoting differing perceptions in academic circles and policy fields. According to him, the time until 1973 was dominated by research work advocating the stance of migration and development optimism, which then was overruled by the pessimist perceptions towards migration and development until 1990. Afterwards the period until 2001, observed more subtle and hybrid views and theories like new economics of labour migration (NELM), livelihood strategies and transnationality, and more recently the shift of migration and development debate focussed on positive views with remittances boom and diaspora involvement. The OECD (2005: 9) also suggested that the connection between migration and development could be investigated around three main topics which are immigrant’s remittances, return migration and usage of human capital. Other novel work on the migration and development interaction course was done by Hillmann (2010) in which he identified old and new geographies of migration. He identified the time spanning from 1960 to 1990 as the period of old geographies of migration characterising the traditional migratory patterns while the time since 1990, he regarded as the period of new geographies of migration with changing migratory trends and patterns.

Embodying theories of migration and development into varying theoretical perspectives as suggested by de Haas (2010), could facilitate investigating the status of the

25 debate on remittances, return migration and its developmental impacts (Figure 2.6). The neoclassical/functional perspective on migration and development interaction debate ruled out any possibility of gains (remittances) for non-migrants while the conflicting neo-Marxist/

structuralist perspective ignored the possibility of reverse flows of capital (remittances) and people (return migrants). On a broader scale, neoclassical perspective was criticized for its underlying assumption of wage differentials provoking the migration flows alone while structuralist perspective failed to answer the question of why certain groups of people were able to change their occupational situation rapidly while others were not able to do so (Hillmann, 2010). A push – pull model which was built in response to prevailing conflicting theoretical perspectives was also unable to explain the phenomenon of return migration and reverse flow of capital (remittances).

The other theoretical perspective, synthesized by de Haas (2010) was spatio-temporal in nature with its own merits and demerits towards explaining the migration and development debate. The spatio-temporal theoretical perspective related developmental level of the receiving societies with transforming migration patterns and thus gave insight to return migration. It also explained the flow of remittances towards non-migrants, but failed to give specific insights to describe its developmental impacts in the origin societies. The pluralist developmental theoretical perspective as identified by de Haas (2010) was the recent attempt by research scholars to illustrate the heterogeneity of the migration and development interaction debate. Hillmann (2010) also described the emergence of the concept of transnationalism in the literature of 1990s which according to him, attained its peak in the early 2000s. This perspective indicates the transformation of traditional migratory patterns, provides an increased importance to remittances and diaspora involvement, and attempts to explain developmental impacts through a broader transnational perspective. It also indicates the diminishing trend of return migration, but is unable to provide insight on the transnational practices performed under the return migration intentions.

Impacts of remittances on development

There is almost a consensus among scholars that remittances are playing a vital role in the development of the origin countries - especially developing countries. According to the World Bank estimates (2011: x), around 74 % of the total remittances worldwide were received in the developing countries in 2010. This is because of the fact that the global international migrant stock is also dominantly comprised of emigrants from the developing countries. The World Bank (2010, online data, as referred to by IOM, 2013: 58) estimated that around 80 % of the total international migrants were born in the developing countries and it is in accordance to the overall population size of the developing countries in comparison to the developed countries. Further, the recorded international remittances to the developing countries in 2010 were around three times the amount of official development assistance (ODA) and almost as large as the foreign direct investment (FDI) (World Bank, 2011: x). The volume of these remittances could be even larger if we consider the unrecorded remittances too. The remittances also constitute a significant portion of GDP of the developing countries ranging from 5 to 40 % (Hagen-Zankar and Siegel, 2007).

Their direct impact is the significant reduction in the level and the severity of poverty in the developing countries (Adams and Page, 2005). But when we talk about international migration, there is almost a consensus among the scholars that international remittances

Chapter 2 Development and Migration: Theoretical and Conceptual Debate

26 Spatio-temporal

theoretical perspective

Neo-classical/functionalist perspective

Figure 2.6: Migration and development interaction highlighting the current state of the research debate

Neo-classical migration theory

Haris-Todaro model

Human capital theory

Neo-Marxist/structuralist perspective

Cumulative causation theory

World system theory

Historical - structural theory Dependency

theory

Push – pull model

Mobility transition theory Demography transition theory

Global regionalization model

Migration hump model

Network theory

Arrows do not show any chronological order; simply they reflect parallels between different theories and direction for further development of theories

Arrows show chronological order and direction of further developments in varying theoretical perspectives on migration and development interaction debate

Source: Own construct, mainly based on the writings of de Haas (2010) Developmentalist modernization

theory

Migration system theory

Structuration theory

New economics of labour migration

Household livelihood strategies

Transnational perspective

Spatio-temporal theoretical perspective

Pluralist developmental theoretical perspective

27 cause a reduction in relative poverty and not absolute poverty or destitution. Because members of such households in absolute poverty cannot afford the expenses for making an international migration in the first place and thus international migration as a livelihood strategy is exercised by other social groups, mainly the households experiencing relative poverty (Stark and Taylor, 1989; and Hampshire, 2002; Quinn, 2006, as referred to by de Haas, 2007).

But on the other hand, scholars have also indicated some negative aspects of remittances on the development of the remittance receiving countries. Ratha (2012) pointed out some of the negative effects of the remittances and according to him, large remittance flows may appreciate the currency value and thus severely affect the receiving country’s exports, increase dependency on remittances, and vulnerability of remittance channels that could be used for money laundering and financing terrorism activities.

Another issue regarding remittances noted by other scholars is that remittances are not a stable source of receiving household’s income and fluctuate with the changing conditions. In 2009, remittances to the developing countries shrank by 5.2 % as a response to the global economic crisis conditions in many destination countries. But soon after that remittances recovered and bounced back (ibid.). It was the first recorded drop in the international remittances since 1985 (IOM, 2010a: 117). However, even then, the shrinkage of international remittances to the developing countries in 2009 was far less than the ODA and FDI for the same 2009. The other associated issue is that its usage depends on personal choices (OECD, 2005: 10). There are scholars who differentiate the usage of remittances as productive and non-productive but that differentiation is not clear and seems artificial in real world situations. With productive usage, they refer to the investments, while for non-productive usage, they relate it to general consumption.

de Haas (2007) critically argued on this differentiation and summed up that remittances used for consumption purposes improve the quality of life of recipients in the first place and through multiplier effects, they could also cause higher incomes for non-migrants (Durand et al. 1996; and Adelman et al. 1988, as referred to by de Haas, 2007).

Thus such remittances could also be regarded as productive or developmental. As these remittances also increase their choices and access to available opportunities, they could be regarded as a contribution towards development as per the definition of the development.

Likewise, de Haas (2007) criticized the viewpoint of the scholars who perceive migrant’s investments in the housing sector as non-developmental investments. Additionally, he referred to Taylor et al. (1996) to argue that housing sector investments generate considerable construction activity, employment opportunities and gains for non-migrants and for these reasons could also be considered as developmental.