GEP 2020/30: The rhetoric of closed borders: Quotas, lax enforcement and illegal immigration

Abstract

Governments do not always enforce their laws, even when they have the means of doing so, and lax enforcement is common in the domain of immigration policy. To explain this paradox we develop a political agency model where gains from migration are unevenly distributed, and an elected government chooses both quotas and their enforcement. We show that distributional concerns can have perverse effects on migration policy since a utilitarian government may set a quota to appease the electorate, but then strategically under-invest in its enforcement. Under-investment is more likely, the larger the preference gap between median and average voter, and the higher the likelihood of a populist challenger gaining office. Our analysis also indicates that redistributive taxation reducing the share of enforcement cost borne by the median voter exacerbate the problem, whereas a compensatory tax rebate financed through a tax on profits from migration alleviates the conflict of interest, thus reducing illegal immigration

Download the paper in PDF format

Authors

Giovanni Facchini and Cecilia Testa

View all GEP discussion papers | View all School of Economics featured discussion papers