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Diasporas and Economic Development: A Review of the Evidence and Policy

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Abstract

The paper reviews recent literature on the economics of migration and diasporas, focusing on economic gains and opportunities that these diasporas could represent for home countries. In addition, the paper discusses policies aimed at leveraging this “diaspora capital.”

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Fig. 1

Source: UN Nations Population Division (2019 revision) and authors’ calculations

Fig. 2

Source: UN Nations Population Division (2019 revision) and authors’ calculations

Fig. 3

Source: World Development Indicators and authors’ calculations

Fig. 4

Source: UN Nations Population Division (2019 revision), World Development Indicators and authors’ calculations

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Notes

  1. For the purpose of this paper, diasporas are defined as citizens of the country living abroad, as defined by the available data.

  2. I use the World Bank definitions, except for Europe and Central Asia, which I divide in two: Western Europe, and Eastern Europe and Central Asia.

  3. For studies reviewing overall gains from migration, also in receiving countries, see  Docquier and Rapoport (2012), Clemens (2016), Kerr et al. (2016) and Kerr (2018).

  4. See Yang (2011) and Adams (2011) for comprehensive reviews of the literature on remittances and economic development.

  5. The debate on whether taxation of remittances is a good or bad policy is out of the scope of this paper.

  6. See Keller (2004) for a complete review of this literature.

  7. Note that in this study a diaspora is defined through ethnicity and not citizenship.

  8. Their result also works for hosting immigrants from those nations, as they explore both channels.

  9. Note that the context of this study is about short-stays abroad and less so about returning after a prolonged period of time abroad.

  10. Note that there is also evidence showing that permanent forced displacement can bring about negative effects on the home countries. Examples include the expulsion of Jews from European countries during Nazism, population exchanges between India and Pakistan, and others. See  Becker and Ferrara (2019) for a review of this literature.

  11.  Kuznetsov (2006) provides a thorough discussion on policies related to diasporas around the globe.

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  1. The Brookings Institution, 1775 Massachusetts Ave NW, Washington, DC, 20036, USA

    Dany Bahar

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Bahar, D. Diasporas and Economic Development: A Review of the Evidence and Policy. Comp Econ Stud 62, 200–214 (2020). https://doi.org/10.1057/s41294-020-00117-0

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