A new GLO Discussion Paper suggests that foreign aid may reduce asylum inflows from poor countries in the short run, but inflows from less poor economies show a positive but weak relation with aid.

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GLO Discussion Paper No. 378, 2019

Foreign aid, bilateral asylum immigration and development – Download PDF
by Murat, Marina

GLO Fellow Marina Murat

Author Abstract: This paper measures the links between aid from 14 rich to 113 developing economies and bilateral asylum applications during years 1993 to 2013. Dynamic panel models and Sys-GMM are used. Results show that asylum applications are related to aid nonlinearly in the level of development of origin countries, in a U-shaped fashion, where only the downward segment proves to be robust to all specifications. Asylum inflows from poor countries are negatively, significantly and robustly associated with aid in the short run, with mixed evidence of more lasting effects, while inflows from less poor economies show a positive but weak relation with aid. Moreover, aid leads to negative cross-donor spillovers. Applications linearly decrease with humanitarian aid. Voluntary immigration is not linked to aid. Overall, the reduction in asylum inflows is stronger when aid disbursements are conditional on economic, institutional and political improvements in the recipient economy.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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