The Wall: Form or Substance?

Most Americans support legal immigration into the United States (preferably more and better targeted than now) and oppose illegal entry. Controversy has arisen over how best to limit the illegal sort (to say the least).

The border between the U.S. and Mexico runs almost 2 thousand miles. By 2009 580 miles of fence or wall had been built for the purpose of reducing illegal entry of people and drugs. This grew to 654 miles by 2017.  Leaving aside the many controversies over the environmental impacts of fencing a border that runs through Indian reservations, and environmentally sensitive areas (“In April 2008, the Department of Homeland Security announced plans to waive more than 30 environmental and cultural laws to speed construction of the barrier.” Wikipedia), we must ask whether a fence/wall on even half of the border will significantly reduce, much less stop, illegal entry into the U.S. and whether it is the most cost-effective way of doing so (electronic “fences” are also now being deployed). The Economist magazine estimated that it may have “reduced the number of Mexican citizens living in America by only 0.6%.” “The-big-beautiful-border-wall-America-built-ten-years-ago”  About half of all illegal emigrants arrived in the U.S. legally by boat or plane and overstayed their visas.

Where there is a will, there is a way. Illegal immigration is reduced when conditions (incomes and security) in a potential immigrant’s home country are improved, when legal channels of immigration widened, and when illegal entry and residence are made less attractive (riskier).

While the North American Free Trade Agreement (NAFTA), which came into effect in 1994, benefited the United States, it improved living standards in Mexico and Canada as well, President Trump’s condemnations notwithstanding.  Over its first 20 years Mexican trade with the U.S. and Canada more than doubled. (Burfisher, Mary E; Robinson, Sherman; Thierfelder, Karen (2001-02-01). “The Impact of NAFTA on the United States”Journal of Economic Perspectives15 (1):125 44.  CiteSeerX 0895-3309.)  Per capita income (GPD) in Mexico increased 37% and in the U.S. 52% between 1993 and 2017.

An example of Trump’s misuse of data was provided by his statement during his recent State of the Union Address when he claimed that: “One in three women is sexually assaulted on the long journey north”, referring to the Mexican caravans to the U.S. border.  The data comes from the Doctors Without Borders, who reported that of the 57 women caravaners who sought their medical care one third “said they were “sexually abused” on the journey, not “sexually assaulted” as Trump says.” This is not even in the same ball park.  “Fact-checking-president-trumps-state-union-address”

On multiple occasions over the last 20 years sensible bipartisan immigration reform laws were proposed but never passed. We badly need to adopt some such reforms in order to meet the labor market needs of the U.S. economy and to settle the legal status of earlier illegal immigrants (including the Dreamers).  See my earlier comments on such reforms:

The most challenging component of the policies to reduce illegal immigration are policies to make illegal status as unattractive as possible. In short, a barrier to illegal status that immigrants can’t climb over, tunnel under, or walk around. Illegal status should be very unattractive. Illegal residence should not have access to any, other than emergency, welfare services. People generally immigrate to the U.S. in search of a better life. That generally means a better paying job than they could find at home.  Employers who hire undocumented workers should be heavily fined (especially if the employer happens to be the President of the United States).  Efforts to deny services and jobs to illegal immigrants should not intrude on the privacy and lives of legal residents however recently they might have arrived. Our conflicted approaches of overlooking illegal status, reflects our failure to have adopted sensible laws for legal immigration.

America is an attractive place to live and we have benefited greatly from the best and the brightest who have chosen to come here (legally).  For our own sake and for the sake of those who might come we need to improve the process and widen the door for legal immigration while making the illegal sort less attractive.

Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.

5 thoughts on “The Wall: Form or Substance?”

  1. Whenever you have a law that is widely violated, the prescription is to make the law more lenient and to increase enforcement effort. In the case of the drug war, this means legalizing less harmful substances and increasing enforcement, broadly defined to include harm reduction (e.g. treatment programs that make illicit drugs less attractive). The metaphor for this policy is HIGH-FENCE/WIDE-GATE, which is drawn from the immigration context. But as you say, the most effective enforcement policy need not be literally a high fence. It may be more stringent identification policies for employment (E-Verify) and welfare payments to make illegal entry less attractive. The “wide-gate” side of the coin is to make legal immigration easier, thereby reducing the pressure for illegal immigration. This benefits the economy by allowing better control of both the total number of immigrants and the composition of the immigrant pool.

  2. Warren splendidly applies the tools of an economist to the complicated and controversial issue of illegal immigration. Overall, classical liberal economists don’t like political borders and are eager to minimize their effects. Borders often reduce the flow of goods, service, money and people. Economists see this as distortions that increase inefficiencies in the deployment of factors of production that reduce the overall “economic pie”. “Equilibrium” in where people would choose to live — in an age of globalization (with easy access to information and inexpensive travel) — would suggest several billion people might move from less lovely places to more desirable ones. The more improved the country, the bigger the immigration issue.
    I believe it was Milton Friedman who made the rather obvious observation that a robust welfare state and an easy immigration policy were incompatible. That is a political observation. A consensus of taxpayers probably prefer to pay more for a safety net for fellow-citizens rather than foreigners (no matter how needy or worthy).
    It is also likely that poorer citizens are more affected by large numbers of low-skill immigrants since many of them also have skills not highly rewarded by the market. Wages might be expected to have downward pressures and job prospects made more difficult. By contrast, better off compatriots might see advantages in smaller paychecks for employees and cheaper services (such as daycare, lawncare, remodeling, etc.).
    Finally, there is the uncertainty of who these illegal immigrants might be. While all immigrants who violate immigration laws are “illegal” by this simple fact, it is not unreasonable to think some small proportion (say five percent, or 50,000 per 1 million) is a very real concern. This highlights a major distinction between those who overstay a visa and those who come otherwise: the former are vetted to some degree, the others often are not. It is likely those with serious criminal records are not given visas (think MS-13 members). Violent crimes also disproportionately affect the less wealthy.
    So, yes, cost-benefit analysis to any extension of the walls that already exist is necessary. But so are considerations of the social, political and economic effects — and their distribution — are needed.
    Robert Schadler

    1. Milton Friedman’s most famous quote about this welfare/immigration problem was that illegal immigrants should be preferred – they wouldn’t get welfare benefits.

  3. I think about the immigration control laws of 1922 and 1924 as abominable attempts at “central social planning” by the political elite. This was exactly what you and I, Warren, condemn. We work to diminish that kind of central planning system.
    I love this quote from Sir Walter Scott,
    “Oh! What a tangled web we weave when first we practice to [control the migration choices of other people].
    Just like price controls, this is the demand side finding a black market to penetrate the barrier.

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