Fighting the Brain Drain

| Tue Oct. 25, 2005 1:20 PM EDT

The New York Times has a very good piece today on the "brain drain" phenomenon among developing countries; wherein the most talented and educated workers in the Third World emigrate to the United States or Europe or other wealthy countries, thus leaving their home countries with very little in the way of human capital, and no way to exit the vicious cycle that caused people to leave in the first place:

Most experts agree that the exodus of skilled workers from poor countries is a symptom of deep economic, social and political problems in their homelands and can prove particularly crippling in much needed professions in health care and education.

Jagdish Bhagwati, an economist at Columbia University who migrated from India in the late 1960's, said immigrants were often voting with their feet when they departed from countries that were badly run and economically dysfunctional. They get their government's attention by the act of leaving….

But some scholars are asking whether the brain drain may also fuel a vicious downward cycle of underdevelopment - and cost poor countries the feisty people with the spark and the ability to resist corruption and incompetent governance.Remittances back home from expatriate workers make up some of the difference—and these payments are usually spent more effectively than foreign aid—but not enough. Interestingly, the "powerhouses" of the developing world—China, India, Indonesia, Brazil—don't suffer from brain drain, with less than 5 percent of their skilled citizens living in OECD countries.

Some suggest that OECD countries should restrict skilled immigration. One response would be that in some sense we already do; strict licensing requirements here in the United States already put up staggeringly high informal tariffs on the importation of doctors, lawyers, economists, and other professionals. Quick example: Several years ago the federal government paid New York hospitals $400 million to train fewer doctors out of concern for "oversupply"; blue-collar protectionists never had it so good. These barriers, by the way, dwarf our rather small tariffs on goods that "free traders" tend to worry so much about. But that's only part of it. On the other hand, the United States, Britain, Canada, and Australia really do actively seek out many other sorts of skilled workers from abroad, especially in more technical fields, and this seems to hurts developing countries the most.

So what to do? Only a handful of countries have been successful in luring their emigrés back home. Bhagwati has suggested that developing countries should tax their expatriates. Creating networks among entrepreneurs might offer one solution—I know of at least one example in Latin America where the government sets up links between researchers abroad and workers at home to share knowledge. Set up something like Craigslist for really smart expatriates. Ultimately, the best thing to do would be to figure out how to get the poorest countries in the world to start growing—just as China, India, Indonesia, and Brazil have done—but the first person who figures out a fail-proof way to do that will get a very nice prize indeed.

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