Diasporas as catalysts for Development

The global movement of ideas and people, and the growth of technologies that can foster their exchange, has contributed to a growing body of migrants with enduring connections to multiple countries. The knowledge, skills, values, and resources that migrants have at their disposal can make them strategic contributors to development processes in different countries and across dimensions of development.

Mexican student at a university in the United States: Geographical areas with a high concentration of migrants tend to perform better on innovation indices, due in no small part to higher numbers of patents filed in such diverse areas. (© picture-alliance/AP)

This article provides an overview of the contributions migrant groups—diasporas—can make to development processes. Such a research area is complex and inherently multi-local and multidisciplinary. Rather than representing an exhaustive inventory of knowledge or research in this thematic area, this contribution synthesizes major strands of thinking on diaspora and development.

I. Essential Terms

To understand how diasporas and development are connected, it is important to first define development. Development is, very broadly, improvement or evolution; fundamentally, it signifies change between two or more reference points. As indicated in this broad definition, development should be understood as 1) the process of positive change, 2) the increments or units of change between reference points, and 3) an end state.

The development of countries, regions, or societies can be measured in different ways, which may be defined based on differing ideologies of progress. One prominent way of assessing development is through economic growth. Economic development may be measured by indicators such as gross domestic product (GDP) or gross national income (GNI), which provide a sense of an economy’s total production and of individual incomes. Over the past two decades, understandings of and discourses on development have begun shifting away from economic development as a sole or even major dimension of development and have instead placed greater emphasis on human development. Within the Externer Link: human development paradigm, development is inherently multidimensional; it engages not only economic improvement but also improvements in areas such as health and human capital. The human development perspective emphasizes the enrichment and improvement of the quality of an individual’s life, in part based on the opportunities and capabilities s/he values.

The United Nations Development Programme (UNDP) has been a vocal proponent of the human development perspective, particularly through the Externer Link: Human Development Index (HDI), a tool that ranks countries according to the development outcomes they have achieved. The HDI relies on three dimensions of development: physical health (measured by life expectancy at birth), human capital (measured by expected years and mean years of schooling), and financial capital (measured by GNI per capita). The composition of the index signals an implicit understanding of development as reflecting expansion of human capabilities.

Depending on how "development" is defined, we may see different, strategic roles for migrants and diasporas as development actors. When development is defined exclusively on GDP growth, a macro-level indicator, the role of an individual migrant or even diaspora group may not seem so important. If development is defined as expansion of human capital, however, a single individual’s contributions may be envisioned as more impactful.

Another essential term is diaspora, which is contentious in both academic and applied literature. In much academic literature, a diaspora is a group defined by characteristics including shared ancestral origin, a collective myth about the homeland or the past, shared group consciousness and commitment to the protection and betterment of the group, and a commitment to (temporary) return to the place of origin or heritage, among Externer Link: other characteristics. In older conceptualizations of the term, a diaspora was viewed as being created through the traumatic dispersal of a population from the (ancestral) homeland, including through forced relocation (as in the case of Africans dislocated through the slave trade) and forced migration as the result of genocide or violent conflict, with the Jewish diaspora viewed as the prototypical diaspora. In newer conceptualizations, forced dispersal is not considered to be the hallmark event that "creates" diasporic identity, but the term is still used to refer to a population that is dispersed across at least two other countries beyond the country of origin.

In policy discourse, and indeed in common parlance, the term diaspora has become synonymous with any migrant group with a set of distinguishing characteristics. For example, one may see reference to the "Indian diaspora", which includes any member of the Indian population that resides abroad, regardless of their own identification or commitment to a collective group identity. In some cases, the term may also be used to denote a population that has collectively mobilized through, for example, participation in an association or organization formed around group identity. In this article, the term diaspora is used to refer to any migrant population, including first generation migrants and their descendants who should no longer be referred to as "migrants" given their lack of direct mobility experiences. Where the literature the article is based on refers to a distinct population, this will be noted in text.

Within the migration studies field, there is growing use of the term transnational migrant to refer to an individual who maintains ties with both countries of origin and residence, including through maintaining social networks, participating civically or politically (through, e.g. voting in elections), contributing financially (through, e.g., remittances), and maintaining other active engagements across borders. In much literature, transnational migrants are viewed as the best positioned to act as vectors of development given their familiarity and engagement with multiple societies.

II. Diaspora Contributions to Origin-Country Development

With a common understanding of what development is and who a diaspora is, it is easier to understand what kinds of contributions diasporas can make to development and under what circumstances those contributions can be made. In line with the multidimensional nature of development referred to above, this section distinguishes among social, economic, and political development.

Within the domain of social development, diaspora members may contribute to the evolution of knowledge and standards through the transfer of social remittances. Social remittances are the norms, values, attitudes, and Externer Link: ‘ways of doing and being’ that migrants "send" back to the country of origin. Such social remittances may reflect innovations in processes—for example, ways of producing a product or service—or may signal changing attitudes about issues such as gender equality, sexual and reproductive health, or the protection of civil liberties, as just a few examples. Over time, as diasporas share new perspectives with those who remain in the country of origin, subtle shifts in the values those people hold may occur. In this way, diasporas often support gradual social change.

In addition to subtly influencing individual values, diaspora members may also use the knowledge and skills they have gained abroad to contribute more directly to development through knowledge networks. Some transnational or diaspora networks have been explicitly organized around knowledge or expertise. For example, Externer Link: the Indus Entrepreneurs is a diaspora organization that encourages Indian, Pakistani, Bangladeshi, and other diasporas from the Indus region to promote enterprise development and growth "back home" with use of the skills and social networks gained abroad. Another example is the Externer Link: Nigerians in Diaspora Organisation Europe (NIDOE), an umbrella organization for Nigerians living in Europe. The NIDOE platform creates the space for Nigerian diaspora members willing to contribute specific skills to Nigeria’s development and to collaborate on development activities in their country of (ancestral) origin. These diaspora networks support migrants to make collective contributions to the country of origin and provide the structure to mobilize their skills and knowledge.

In the economic domain, there are both direct and indirect ways in which diasporas contribute to development. The movement of human capital is one such indirect way. As people of different skill levels and professional competencies move, they may support a better match of skill supply to demand in both the domestic and foreign labor market. For some skilled migrants who are unable to find jobs at their skill levels locally, migration and subsequent employment at the "right" skill level (and for better wages) abroad can lead to higher life-time returns for education. Higher returns for education abroad may also incentivize young people to pursue (higher) education, a Externer Link: phenomenon observed in countries like the Philippines that have mature markets for skilled labor abroad. The transfer of financial remittances, the money a migrant sends to other members of his/her social network, is a more direct means through which diasporas can contribute to economic development. A number of studies, including a World Bank assessment of eleven Latin American countries, have demonstrated how the Externer Link: receipt of remittances can reduce poverty headcount and severity. For many recipients, remittances are predictable and regular cash transfers that supplement and diversify existing incomes. In many contexts, remittances act as informal social protection; they help smooth household consumption over time, helping households not only build resistance to income shocks but also recover from shocks if they occur. During and immediately after environmental or political crises, remittances tend to increase to assist in the recovery and protection of recipients. Externer Link: Remittances are often described as being counter-cyclical; they may peak at exactly those moments when other forms of foreign exchange, such as foreign direct investment (FDI), decrease.

On the meso- or macro-level, the diaspora can also contribute to more robust labor markets. Diaspora members may be more willing to start or invest in a business in a less stable economic or political context than other foreign investors. Diasporas likely know more about the local context, have local networks that can help them navigate the regulatory environment, and can better detect untapped market niches that innovative businesses can fill. Externer Link: Diaspora entrepreneurs and investors may create or contribute to businesses that generate employment, which can help strengthen local economies by reducing unemployment. Diaspora-supported enterprises, especially those that function transnationally, can also support trade flows between countries of destination and origin.

The contributions that diasporas can make to development in the political sphere are similarly diverse. The role of the diaspora in supporting governance transitions, particularly in conflict and post-conflict settings, has been Externer Link: well documented. There is evidence that the diaspora has contributed to peace negotiations and agendas in post-conflict settings as varied as Afghanistan, Burundi, Nepal, Somalia, and Sudan. In such settings, diasporas have acted as intermediaries between conflicting parties, encouraged dialogue with international mediators, suggested elements to be included in peace agreements, and have supported their implementation. Externer Link: Diasporas may also encourage a country to adopt or expand transitional justice measures, including peace and reconciliation processes that promote disclosure of past crimes as a way to build trust among different actors. Members of the diaspora, including refugees, have been instrumental supporters of transitional justice in countries such as Iraq, Kenya, Liberia, and Zimbabwe.

The diaspora can also help revitalize political systems through both direct and indirect participation in elections and in political systems. Former members of the diaspora have historically played important roles in leading governance systems; Mahatma Gandhi is perhaps the most resounding example of a diaspora member whose return from abroad (in this case, from a 21-year stay in South Africa, where he practiced law) spurred political transition. Externer Link: Many modern governments encompass former diaspora members who returned specifically to contribute to political institutions. In 2011, in all Somalian regional governments diaspora members constituted at least one third of all representatives; in Iraqi Kurdistan, around 50 percent of ministers were from the diaspora in 2013, and in Afghanistan, 75 percent of the interim cabinet administration of Hamid Karzai had been living abroad. The diaspora can also play an important role in shaping political institutions through extra-territorial voting. In some countries, the diaspora vote can be decisive in shaping election outcomes, including in very stable democracies such as New Zealand, where the diaspora vote in the 2008 parliamentary elections Externer Link: helped change eventual seat allocation among parties. The participation of the diaspora in political processes can help political systems diversify and represent wider ranges of interests and opinions, in some cases even leading to the representation of population groups that were previously marginalized within the political system.

III. Diaspora Contributions to Residence-Country Development

The division of diaspora contributions to development into impacts on country of origin and residence implies clear geographical separation between two sites of diasporas’ lives. As highlighted above, many of the contributions diasporas make are transnational in nature and link social, economic, and political processes and networks across spaces. These linkages become especially apparent when considering how diasporas can support development in countries of residence.

For example, recent research on the macro-level impacts of migration on countries of residence have focused on the link between migrant(-origin) populations and innovation. Geographical areas with a Externer Link: high concentration of migrants tend to perform better on innovation indices, due in no small part to higher numbers of patents filed in such diverse areas. Migrants can act not only as individual bridges for knowledge across countries and continents but can also build knowledge networks that facilitate the flows of ideas and of collaborations across places and sometimes industries. The cross-germination of ideas in diverse communities can contribute to both social and economic development. Social norms relating to support of cultural and political pluralism, and support for different forms of knowledge, may change as the result of migration, which may signal social progress. Economically, the generation of new ideas and norms can support economic diversification, innovation, and eventually growth.

As in countries of origin, the growth of transnational knowledge and business networks through the diaspora can support economic growth in countries of residence, especially through the creation of new businesses. In many countries, diaspora entrepreneurs can create businesses that fill gaps in the local market, either by providing goods that were previously unavailable on the market or by providing innovative services. A Externer Link: recent book by journalist Robert Guest provides a bevy of examples of how immigrant entrepreneurs have stimulated innovation in their communities of residence, often by combining the skills and knowledge they have gained in different places and by linking together members of social networks dispersed across different countries. The development of new businesses in the country of residence can create new employment on the local market while also sometimes lowering the costs of goods and services produced.

Migrant workers or employees can also play an important role in strengthening local economies by changing the availability of certain kinds of skills or knowledge. Migrant workers of a variety of skill levels can ease mismatches in local labor supply and demand, increasing efficiency within local markets—especially in countries with Externer Link: looming demographic retirement crises. How well this occurs depends in part on the complementarity or supplementarity of migrant labor to local labor. If migrant labor is substitutionary, it means the skill profile and match between skill and job function is similar between incoming workers and local workers. If migrant labor is complementary, the skills migrants bring augment the skills already in the local market, in some cases filling skill gaps or providing certain skilled functions more efficiently than local workers could. Complementary migrant labor is often described as being more beneficial for local economies because it helps increase efficiency in local markets while potentially generating more employment for local workers. In countries like Italy, for example, the Externer Link: arrival of migrant women who provide child- and elder-care services has been seen as largely complementary, as it has allowed Italian women who previously performed these functions to re-enter or remain in formal employment. In the US, the arrival of lower-skilled migrant laborers in industries such as construction has contributed to Externer Link: greater employment mobility among lower-skilled native workers. Native workers have some competitive advantages over migrant workers, including in language and other communication skills. When migrant workers arrive and take on manual labor jobs, local workers who may have performed those jobs in the past may be propelled into higher functions, including management and sales, where their local knowledge serves them better.

While much of this section has focused on recently-arrived migrant populations, the diaspora—comprised of both old and new cohorts of mobile populations—can play an important role in political development in countries of residence. Diverse populations can support greater diversity and plurality of politics; as constituents become more diverse, so, too, may the political bodies that represent them. Members of the diaspora who have the right to stand for election (through, e.g., attainment of citizenship and/or minimum duration of residence) may also directly contribute to political institutions by becoming elected officials. There are a number of high-profile political figures in different countries of residence that are either dual citizens or are members of the more distant diaspora. In some cases, the participation of diaspora members in the political system of the country of residence can lead to better representation of migrant and diaspora communities in local governance bodies. The participation of the diaspora in politics, both as voters and as politicians, may also enable greater engagement on bilateral agreements or political issues. A further area of political engagement is in Externer Link: lobbying and awareness-raising, with many diaspora groups, particularly in diverse countries like the US, forming coalitions to lobby on bilateral policy issues with development impacts (such as debt cancellation or aid policies). Bilateral agreements on the portability of pensions, for example, may also be influenced by members of the diaspora approaching retirement and considering steps in their mobility trajectories.

IV. Remaining Controversies and Conclusions

This article has provided a brief inventory of the positive links between diasporas and development, but in doing so, it has ignored the nuances that condition this relationship. The developmental impacts of migrants and diasporas are often contested; modeling impacts requires sophisticated and specific data that is often absent. A key challenge is that identifying "impacts" requires isolation of migration as a specific trend, yet the mobility of people often occurs simultaneously with other shifts or trends—such as trade agreements and greater movements of goods—that also affect development. An additional challenge is that development is a continual process, and data collected over longer periods of time would be needed to understand the short-, medium-, and longer-term impacts of migration on any given set of development indicators. Another controversy is that many of the positive impacts on development attributed to the diaspora can have negative flip-sides or perspectives. For example, the contributions of the diaspora to more diverse and representative political systems in countries of origin and residence may inadvertently contribute to the fragmentation of political parties and interests, which may increase competition for power and resources in already fragile political contexts. As another example, the increase in migrant labor in some local economies Externer Link: may contribute to the erosion of workers’ wages and protections, especially in countries with weak labor market regulations. The contributions of migrants and diasporas to development must therefore be examined carefully within each local context, which can make it challenging to derive high-level insights or lessons that apply universally. Given these caveats, there are nevertheless strong indicators that diasporas can be powerful agents of social, economic, and political development. There are certain conditions under which diasporas better thrive as development catalysts, however. Both academic and policy research has highlighted that legal and economic environments play an important role in facilitating diasporas to play positive developmental roles. Policies that enable diasporas to lead transnational lives and to belong to multiple political and economic systems simultaneously are key to supporting diasporas to make positive contributions. These policies relate not only to identity (e.g., acceptance of dual citizenship, issuance of identity documents like overseas residence cards) but also to economic security, including the right to contribute to and receive benefits from contributory social protection (such as pensions). In both countries of origin and residence, migrants and diaspora members are better equipped to contribute to development if they have security of identity and residence, including the right to return (temporarily or permanently) to the country of origin with the possibility to legally re-migrate to the country of destination. Another important condition is quality and tenure of employment, which is both an indicator of integration and an important reflection of the legal entitlements a migrant enjoys. While it is outside of the immediate domain of migration policy, the transparency and predictability of the economic environment is also important in securing diaspora contributions. For a diaspora member to want to invest in the country of (ancestral) origin, for example, it is important that s/he can anticipate economic risks and can trust the institutions that govern economic exchanges. While diaspora members may be naturally more inclined to contribute to development processes, good quality governance remains essential to support these exchanges.

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