About 15 years ago, Benjamin Powell and I started working together on an academic paper about Somalia that the Journal of Economic Behavior and Organization eventually published. We corresponded entirely through email on the project while our other co‐author Ryan Ford worked with Powell in person. It wasn’t until years later that we even met in person. But little did either of us know that our collaboration together would eventually result in a co‐authored book. Today is the release date for our book Wretched Refuse? The Political Economy of Immigration and Institutions. You could be reading the kindle version within a minute of purchasing it.
This book isn’t our first research collaboration on immigration and the topic has only grown in importance since then. It’s the most hotly contested policy topic in political debate in the United States and most of the developed world although it’s been temporarily knocked aside by the pandemic. After COVID-19 subsides, immigration will reemerge as one of the big topics of debate again. Our book will help you understand one important, widely felt, and differently expressed argument against immigration.
First, let me throw in some backstory. In 2013, I wrote a blog post entitled “Immigration Does Not Decrease Economic Freedom” that very simply examined the relationship between stocks of immigrants and economic freedom in the United States. At that time, I was starting to hear different arguments against liberalized immigration by a few libertarians and many conservatives who were traditionally pro‐market and pro‐immigration. Rather than the standard “immigrants vote Democratic so they’re bad” argument that had been extant for years, a less‐partisan version began to circulate that immigrants from countries with worse economic institutions would bring them with them and eventually degrade American economic institutions and thus reduce economic growth in the United States and kill the economic goose that lays the golden eggs of productivity that attract immigrants in the first place. In other words, government control of the economy was a disease that could spread from the developing world to the United States via the vector of immigrants, and the patient would be permanently impaired as a result.
This potential outcome was a real worry to me. There are many different theories in economics that try to explain why some places are richer. While most of them have some merit, the difference in economic institutions across countries is the best. By economic institutions, I mean the rules of economic exchange and their enforcement mechanisms. They include formal government rules like property rights and the courts but also informal cultural rules like sealing a deal on a handshake (or an elbow‐bump) and that we’re reasonably confident that handing over a credit card to a merchant probably won’t result in theft.
Informal economic institutions are difficult to measure and I don’t have much confidence in big cross‐country surveys that provide data to potentially do so, but Cato and the Fraser Institute have published a big index on economic freedom that allowed me to look at the formal economic institutions that really matter. I found a slight positive relationship between immigration and economic freedom or, at worst, no meaningful relationship. This was the first step toward writing Wretched Refuse? The Political Economy of Immigration and Institutions.
After I published that blog post in 2013, Benjamin Powell and many other excellent economists contacted me to discuss how to study whether immigrants impact economic institutions. The results were multiple peer‐reviewed academic papers that began examining this topic in a deep way. And we weren’t alone as other economists started openly discussing how immigrants affect institutions and to begin to model it. Then Powell got the idea to write a book on this project, asked me to coauthor it with him, and the result is available today for purchase. To our knowledge, our book is the first of its kind on this specific topic.
Our book’s topic may seem obscure to some people. After all, with every debate over immigration raging why write a book about a niche issue in immigration economics? There are several answers to that, but the first is that we wanted to know if we’d kill economic productivity in the developed world if we ever succeeded. The standard economic case for free immigration is strong, but some very smart people were telling us that we were missing a very large negative externality. That seemed worthy of a book length examination.
Our book has three major sections. The first shortly summarizes the economic reasons for expanding legal immigration and introduces the argument that liberalized immigration would undermine American institutions. The second section analyzes cross‐country evidence on how immigration affects economic institutions, corruption, terrorism, and culture more broadly. The chapter on culture focuses on whether immigrants lower general social trust and trust in specific institutions. It’s the chapter where I learned the most, especially about the economics of culture and immigration, and it influenced other independent research. The third section of the book looks at individual case studies on how sudden exogenous immigration shocks in Israel and Jordan improved economic institutions there as well as how more liberal immigration laws in the United States delayed the growth of government.
The book was a lot of fun to write, I was blessed with a fantastic coauthor, and I hope you enjoy reading it half as much as we enjoyed writing it. Please check out this interview that we had with Nick Gillespie at Reason to get a more detailed glimpse of what our book is about and this blog post by Bryan Caplan about it.