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The Diaspora and economic development in Africa

Review of World Economics volume 155, pages 785–817 (2019)Cite this article

Abstract

While the dominant collective belief asserts that brain drain is detrimental to the development of small economies, new studies hold the reverse view. This paper aims at studying the role of the Diaspora in the economic development of low-income countries with particular focus on African countries. It analyzes both the overall effect and the specific effect of emigration according to the level of education of emigrants. While the empirical results for all developing countries fail to establish an unambiguous relationship between the Diaspora and economic development, those concerning African countries establish a clear and unambiguous relationship. The African Diaspora, especially the high-skilled Diaspora, contributes positively, significantly and robustly to the improvement of income in Africa. These findings challenge the dominant collective belief. Improvements in human capital, total factor productivity and democracy are effective transmission channels of this impact. In addition, while high-skilled emigrants have an overall greater impact on economic development and democracy, those with a low level of education contribute more to remittances to Africa.

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Notes

  1. OECD (Organisation for Economic Co-operation and Development) countries are home to the majority of the Diaspora (at least the highly skilled) from developing countries, including Africa.

  2. Diaspora is defined as the stock of people born in a country and living in another one (see Beine et al. 2011). It should be emphasized that this definition may underestimate the real size of the Diaspora in that it does not include the descendants of migrants.

  3. Commander et al. (2004) present a broader survey of the theoretical literature on brain drain.

  4. As this paper examines the impact of the Diaspora from the point of view of sending countries, we will not go further on the literature on host countries.

  5. See the list of countries with emigration rates (total and by skill) in the Online Appendix (see Table A.1).

  6. Australia, Austria, Canada, Chile, Denmark, Finland, France, Germany, Greece, Ireland, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and United States.

  7. The results of the different estimates (cross-section and panel) of the gravity model as well as those of the first stage regressions are presented in the Online Appendix (see Table A.3).

  8. The empirical value of this parameter we get for African countries is 0.30 with the panel data, which is close to the reference value.

  9. We do not address the issue of the impact of remittances on economic development. This could be the subject of a separate article. See for example Catrinescu et al. (2009).

  10. Remittances (% of GDP) are taken from WDI and are defined as the sum of personal transfers and compensation of employees.

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Acknowledgements

This paper was produced under the AERC/AfDB Scholars Exchange Program. We would like to thank AfDB and AERC for funding the research stay.

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Authors and Affiliations

  1. BETA – CNRS, University of Lorraine, 13 Place Carnot C.O. 70026
, 54035, Nancy Cedex, France

    Blaise Gnimassoun

  2. EconomiX-CNRS, University Paris Nanterre, Nanterre, France

    Blaise Gnimassoun

  3. Macroeconomic Policy, Forecasting and Research Department (ECMR0), Abidjan 01, Côte d’Ivoire

    John C. Anyanwu

  4. African Development Institute (ECAD), African Development Bank (AfDB), Rue Joseph Anoma, 01 BP 1387, Abidjan 01, Côte d’Ivoire

    John C. Anyanwu

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  1. Blaise Gnimassoun
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Correspondence to Blaise Gnimassoun.

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Gnimassoun, B., Anyanwu, J.C. The Diaspora and economic development in Africa. Rev World Econ 155, 785–817 (2019). https://doi.org/10.1007/s10290-019-00344-3

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Keywords

  • Diaspora
  • International migration
  • Economic development
  • Africa

JEL Classification

  • F22
  • F63
  • O55