Political economy of immigration policy in GCC countries

Louis Jaeck

Economics and Politics, 2022, vol. 34, issue 3, 444-464

Abstract: This paper focuses on immigration control in the Gulf Cooperation Council countries from a theoretical perspective. Gulf countries have massively relied on labor imports from the wider Arab world and South Asia, as the nationals' populations were too small to fill the growing need to expand infrastructure and development projects. Relying on a common agency model of lobbying adapted to an autocratic setting, it analyzes the setting of an immigration policy as a political compromise pressured by a multinational firm established in the host country and national citizens. Its main theoretical result is counterintuitive and highlights that, although Gulf countries' nationals value a tighter control on immigration to preserve a social capital that is perceived to be threaten by unlimited inflows of foreign migrants, the level of immigration control is lower than its socially optimal value. The impact of immigration control on the wages of unskilled workers is a key component of the model. This theoretical modeling helps to understand the limited effectiveness of the “Kafala” reforms implemented during the 2000s and beyond, as well as their inability to curb large‐scale migrations to the Gulf countries' economies.

Date: 2022
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