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The political economy of migration policies in oil-rich Gulf countries

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  • Halvor Mehlum
  • Gry Østenstad

Abstract

We study the political economy of migration policies in the oil-rich and non-democratic Gulf countries where different economic groups have divergent preferences over the migration policy choices. We consider two policy dimensions: a) the number of migrants allowed into the country and b) whether to discourage remittances by migrants. The inflow of migrant workers leads to a wage decline that harms citizen workers, while capitalists and oil rent earners benefit. When foreign exchange is remitted out of the economy, the real exchange rate depreciates. The remittance outflow benefits oil rent earners, while capitalists and workers lose. The autocratic ruler chooses a migration policy mix and an oil-rent redistribution scheme to maintain critical political support to avoid public rage. Our results explain differences in migration policies and redistribution schemes across Gulf countries. The model also offers predictions regarding the development of migration policies if these countries were to become more democratic.

Suggested Citation

  • Halvor Mehlum & Gry Østenstad, 2016. "The political economy of migration policies in oil-rich Gulf countries," Oxford Economic Papers, Oxford University Press, vol. 68(4), pages 1062-1083.
    • Handle: RePEc:oup:oxecpp:v:68:y:2016:i:4:p:1062-1083.
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    File URL: http://hdl.handle.net/10.1093/oep/gpw033
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    References listed on IDEAS

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    1. Dustmann, Christian & Mestres, Josep, 2010. "Remittances and temporary migration," Journal of Development Economics, Elsevier, vol. 92(1), pages 62-70, May.
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    Cited by:

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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