118. The Poverty Fix Nobody Talks About – Lant Pritchett

When Lant Pritchett worked as a development economist (many years at the World Bank), he noted the approach was very place centric. It was about how to develop Senegal, India, Nigeria etc. Mobility was not a big deal. “I realized gradually that the mobility of people across places could be at least as big a way for people to improve their well being as the efforts to improve places”, says Lant Pritchett. “The wage differentials, which are driven by productivity differentials, are so huge that the ability of people to move from low productivity to high productivity places is far and away the largest way to improve human well being.” Lant co-founded the advocacy and action group/think tank LaMP to promote labor mobility. The acronym stands for Labor Mobility Partnerships. The economic development models that were developed some decades ago got one thing completely wrong: productivity didn’t converge. Education, health and even capital per worker converged, but productivity didn’t. “Productivity isn't primarily about knowledge, it's about complex features that we now call institutional, political and social.” The a-ha insight is that the world has people in poor places, not poor people. “It’s simply hard to make a person productive in rural Ethiopia, and there's no magic bullet.” To many people, the term migration brings up images of people moving permanently and acquiring new roots. But if the world could achieve well-organized and orderly temporary labor mobility on a scale that is an order of magnitude larger than today, this could bring tremendous benefits, according to Pritchett. Calculations show that the gains would be at least 20 times the size of the ODA in the world. In the migration discourse the elephant in the room is the fact that the labor force is shrinking rapidly in the rich parts of the world, relative to the aged population. How to deal with this demographic transition if you only talk about permanent migration and refugees? “You can’t. The only way is to open a third question: who are we going to allow to live and work on our sovereign territory, without any expectation they are becoming citizens?” Is the temporary nature of this mobility meant to appease those who worry their national identity is being threatened? In a way, Lant says. “But appease is a stronger word than we need. It's not just a necessary appeasement objective, it’s a legitimate objective to want to preserve a sense of 'spanishness' or 'englishness', even if those are socially constructed and imagined identities.” What about the risk of brain drain in the countries that provide the labor force? “Brain drain gets attention because it rhymes”, Lant says smilingly. “There is not much analytical foundation for the claim. If we used the rhyme cortex vortex, brains moving round in a circular way, we would have a more accurate and interesting picture of what is going on.” Isn’t living where you want as basic a right as free speech or religious freedom? Are we primarily humans or are we primarily citizens? “Ah, there's the rub of it.” “I think the conversation on open borders versus closed borders is silly. Open borders is not politically how the world is going to be organized in the foreseeable future. And there is something unique, valuable and important about maintaining identities.” “But these identities can change over time, and they can be inclusive.” Lant’s website Lant’s scientific paper “The political acceptability of time-limited labor mobility: Five levers opening the Overton window” LaMP: Hein de Haas’ book “How Migration Really Works”