The Political Economy of Immigration, Investment, and Naturalization

Atisha Ghosh and Benjamin Zissimos
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Atisha Ghosh: Department of Economics, University of Warwick

No 2101, Discussion Papers from University of Exeter, Department of Economics

Abstract: This paper provides the first economics-based rationale for the purpose of naturalization. It presents a new political-economy model of immigration featuring a hold-up problem between the government and capital owners over immigration policy, that causes under-investment in capital. Naturalization plays the role of an institution that the government can use to 'tie its hands' to the presence of naturalized immigrants, partially resolving the hold-up problem. The model is used to explain the Koopmans-Michalowski paradox: that while dictatorships are more open in terms of policies towards immigrants, democracies are more open in terms of extending immigration rights through naturalization.

Keywords: hold-up problem; immigration policy; institution; migration; naturalization (search for similar items in EconPapers)
JEL-codes: D02 F22 J61 O43 P16 (search for similar items in EconPapers)
Date: 2021-06-02
New Economics Papers: this item is included in nep-int, nep-mig and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:2101

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