Migration and Institutional Development.

Summary This article provides a critical review of the recent literature on the links between migration and institutions in the context of developing countries. There are many channels through which migration affects the democratization of countries of origin. Their effect can be positive or negative depending on who the migrants are, where they go, and how migration affects educational and occupational choices. For the sake of simplicity, I separate here the different existing channels between those that fall under traditional political economy approaches (rent-seeking/avoidance models, competition between jurisdictions, Laffer effects due to education, occupation, and location choices) and lead to supply-side adjustment, and those that fall under the diffusion of democracy and induce changes on the preference and demand side. The political economy literature is theoretically very rich but empirically rather poor. The opposite is true for the literature on the cultural diffusion of democracy, which is presented in an ad hoc manner on the theoretical level but is gradually enriched by a growing number of case studies. Analyses of inter-country comparisons focus on the overall effect of migration on institutions. While they generally highlight a positive effect of international migration on the institutional development of countries of origin, they do not identify the exact channels through which these effects are obtained.