Ending global apartheid: economist Lant Pritchett defends immigration, the least-popular—and most-proven—idea for helping the world's poor

Reason, Feb, 2008 by Kerry Howley

So the first answer is: Milton Friedman is wrong. It's not incompatible with a welfare state; it's incompatible with a welfare state that doesn't differentiate between people within its territory. Singapore manages to maintain an enormously high level of benefits for its citizens with massive mobility. Kuwait has one of the highest immigrant populations in the world, and you can't ask for a more cradle-to-grave welfare state than what Kuwait gives its citizens. So it's obviously possible to maintain whatever level of welfare state you want and have whatever level of labor mobility you want, as long as you're willing to separate the issues.

reason: The political scientist Robert Putnam has done research showing that diversity correlates with diminished feelings of trust within a community. It seems plausible that higher levels of immigration could erode support for a welfare state.

Pritchett: Again, this depends on how migration is structured. No one looks at the HI-B holders, or the au pairs, both of which are temporary mobility labor schemes, and says, "Gee, this undermines the welfare state" I think it is an issue only if you insist that mobility across the border for people who provide an economic service automatically endows them with a full set of political rights.

The world would be a much better place if that were not true. One of the awkward paradoxes of the world is that Bangladeshis and Pakistanis and Nepalis are enormously better off precisely because the Persian Gulf states don't endow them with political rights. Because if you said to Kuwaitis, every Bangladeshi who comes in is going to acquire the full entitlements of Kuwaitis, I'm sure the Kuwaitis would cut the flow of Bangladeshis to zero. The Bangladeshis have been made enormously better off by the ability to work in Kuwait.

No one responds to Putnam's research by saying we should make America less diverse. The logical consequence of that line of thinking is, let's resegregate America; let's re-create nondiverse communities. I think Lester Maddox used to say something like that in the '50s.

reason: I take it that you believe property rights are foundational to wealth creation. Do citizens "own" their countries? And if you think just anyone should be able to come over the borders, are you denying citizens their property rights in their country?

Pritchett: I agree that citizens have a property right to their country. But the beautiful thing about institutions that create property rights is that they're a free good. If we allow in another 10 million, 20 million, 30 million people, then what has created American wealth--its economic institutions that allow entrepreneurship, that allow free markets, that allow people to innovate, that allow people opportunity--none of that is eroded by letting in more people.

America isn't Kuwait. The wealth of Kuwait is that they're sitting on this pool of oil. The wealth of America is that we have developed fantastically successful economic institutions. Those institutions are not zero sum. No one has suggested we should have limited America's natural population growth because with 300 million people there are fewer benefits of our institutions of property rights to go around. It's the same thing with migration.