Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279785 
Year of Publication: 
2023
Series/Report no.: 
Kiel Working Paper No. 2257
Publisher: 
Kiel Institute for the World Economy (IfW Kiel), Kiel
Abstract: 
In response to surging immigration pressure in Europe and the United States, Western policymakers advocate foreign aid as a means to fight the 'root causes' of irregular migration. This article provides the first global evidence of the effects of aid on migration preferences, migration flows, and possible underlying mechanisms, both in the short and longer term. We combine newly geocoded data on World Bank aid project allocation at the subnational level over the period 2008--2019 with exceptionally rich survey data from a sample of almost one million individuals across the entire developing world and data on migration and asylum seeker flows to high-income countries. Employing two distinct causal estimation strategies, we show that in the short term (after the announcement of a World Bank project and within two years after project disbursement), foreign aid improves individual expectations about the future and trust in national institutions in aid-receiving regions, which translate into reduced individual migration preferences and asylum-seeker flows. In the longer term (between three to five years after disbursement), foreign aid fosters improvements in individual welfare through poverty reduction and income increases, resulting in larger regular migration to high-income countries. Our findings show that aid can cause a short-lived reduction in migration aspirations, except in fragile Sub-Saharan African contexts where aid appears largely ineffective. In contrast, foreign aid enhances individual capabilities over the longer term, contributing to greater regular migration, consistent with the 'mobility transition' theory.
Subjects: 
Foreign aid
World Bank
aid effectiveness
international migration
asylum seeking
migration preferences
Gallup World Poll
JEL: 
F22
F35
F53
H77
O15
O19
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.