Re-thinking Immigrant Investment Funds

The idea of selling membership into society is not new, but it has taken on new life with the recent proliferation globally of Immigrant Investor Programs (IIPs). These programs involve the sale of national membership privileges to wealthy foreigners. They are justified by attractive policy objectives: to stimulate economic development and attract engaged investormigrants. But they are often plagued by failures to achieve either of these two goals. This paper surveys the universe of IIPs, reviews their objectives, activities and performance, and explores how they might be improved. We develop a two-dimensional typology for distinguishing IIPs according to types of criteria they impose on program applicants: (i) wealth criteria and (ii) engagement criteria. We map out four distinct immigrant investor strategies that emerge out of these different IIP criteria: Aspiring Astronauts, Absent Oligarchs, Migrant Mayors and Pioneer Patrons. By analyzing which IIP criteria encourage which strategies, we highlight common mismatches between stated objectives and embedded incentives, helping to explain why many IIPs report poor economic and immigration policy outcomes. We also contemplate solutions. In particular, we observe that the success of an IIP depends upon the coming-together of expertise from two domains—migration policy and investment management—and we draw upon insights from successful Sovereign Development Funds (SDFs), which likewise must simultaneously achieve public policy and financial goals. We propose a set of principles to guide the emergence of a new type of SDF: Immigrant Investment Funds (IIFs). We also indicate how such vehicles might help address urgent issues around migration and refugees, for example by investing in refugee and migrant entrepreneurship and in the infrastructures needed to incorporate newcomers, thereby demonstrating the public value of immigration at a time when anti-immigrant rhetoric has become a serious irritant in world politics.