We propose a theoretical framework for analyzing the problems associated to unilateral immigration policy in receiving countries and for evaluating the grounds for reform of international institutions governing immigration. We build a model with multiple destination countries and show that immigration policy in one country is influenced by measures adopted abroad as migrants choose where to locate (in part) in response to differences in immigration policy. This interdependence gives rise to a leakage effect of immigration policy, an international externality well documented in the empirical literature. In this environment, immigration policy becomes strategic and unilateral behavior may lead to coordination failures, where receiving countries are stuck in welfare inferior equilibria. We then use an equilibrium refinement to show that the selected equilibrium differs from the Pareto-dominant one and argue that multilateral institutions that help receiving countries make immigration policy commitments would address this inefficiency

Coordination Failures in Immigration Policy / Giordani, Paolo; M., Ruta. - In: JOURNAL OF INTERNATIONAL ECONOMICS. - ISSN 0022-1996. - STAMPA. - 89:1(2013), pp. 55-67. [10.1016/j.jinteco.2012.05.002]

Coordination Failures in Immigration Policy

GIORDANI, PAOLO;
2013

Abstract

We propose a theoretical framework for analyzing the problems associated to unilateral immigration policy in receiving countries and for evaluating the grounds for reform of international institutions governing immigration. We build a model with multiple destination countries and show that immigration policy in one country is influenced by measures adopted abroad as migrants choose where to locate (in part) in response to differences in immigration policy. This interdependence gives rise to a leakage effect of immigration policy, an international externality well documented in the empirical literature. In this environment, immigration policy becomes strategic and unilateral behavior may lead to coordination failures, where receiving countries are stuck in welfare inferior equilibria. We then use an equilibrium refinement to show that the selected equilibrium differs from the Pareto-dominant one and argue that multilateral institutions that help receiving countries make immigration policy commitments would address this inefficiency
Immigration policy; cross-border externalities; coordination failures; multilateral institutions
Coordination Failures in Immigration Policy / Giordani, Paolo; M., Ruta. - In: JOURNAL OF INTERNATIONAL ECONOMICS. - ISSN 0022-1996. - STAMPA. - 89:1(2013), pp. 55-67. [10.1016/j.jinteco.2012.05.002]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/40656
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