Good economics for the CAA-NRC times: Banerjee, Duflo's book dispels many of our beliefs about immigration

Nikita Rana

As protests against the Citizenship (Amendment) Act (CAA) and National Register of Citizens (NRC) continue to unfold across the country, take a look at one grim statistic: 25 people in India have lost their lives in these protests. That's a big number. Now compare this figure to the two deaths that have been caused as a result of the six-month-old pro-democracy protests in Hong Kong, and it seems even bigger.

Many of us continue to lead our lives unaffected by this social unrest, but that luxury will vanish soon. The fate of these demonstrations is likely to have a long-lasting impact on us, we just don't know it yet.

In the current era where the Right-wing is in power in most countries and its rise continues unchecked, what's happening in India is representative of what's happening in the rest of the world. The problems are many, ranging from economic to climate-related. If we look at the experimental evidence that Nobel laureates Abhijit Banerjee and Esther Duflo present in their book Good Economics for Hard Times in the context of the CAA, National Population Register (NPR) and NRC, we'll understand how misguided some of our beliefs on immigration are.

Statistical discrimination


The authors tell us that the leader of the largest tribe doesn't have to deliver anything to remain in power €" not even to his own supporters. They'll remain supporters as long as they're worried about being taken over. The Bharatiya Janata Party successfully instilled the fear of a Muslim takeover in Hindus, even though numbers indicate that the minority community forms 14.3 percent of our population today, and was 14.2 percent of our population seven years ago.

Modi appealed to three sections of society in both 2014 and 2019. The first was modern urban India, whom he pleased with a pro-business agenda. The second, the expanding middle class that lapped up nationalism rooted in Hindu tradition, and the third were upper caste Hindus who felt economically threatened by Muslims and lower caste individuals.

The CAA, in offering citizenship benefits specifically to Hindus, Sikhs, Buddhists, Jains, Parsis and Christians, will further this statistical discrimination. The conspicuous exclusion of Muslims will alter the demographic makeup of voters in states, creating a cushy vote bank for the BJP. What's ironic is that while liberal protesters are fighting for the inclusion of Muslims in the Act, those protesting in Assam are against the CAA as a whole. They fear that legitimising illegal immigrants sooner than the due process permits will destroy their economy and culture. This too, is an unfounded fear.


Facts don't matter

Research has repeatedly shown that low-skilled migrants are no threat to the local population. They don't take away your jobs and strip you of your livelihood. In fact, some reports that have studied immigration impact on developing countries indicate that outsiders have a small positive impact on productivity. Immigrant labourers are known to be more efficient than natives, even if they work in poor conditions, and are more likely to become employers than locals. Plus, when they do take jobs, they take the ones that natives reject. If you look at what's happened in the US, after Trump cracked down on immigration, you'll see that there's a shortage of farm labour in many US states. These jobs that were readily taken by Mexicans are now vacant. Even though employers are now offering higher wages to Americans for the same farm jobs, there are few local takers.

Most people blindly believe in the law of supply and demand. But in reality, the graph isn't a 45-degree line, like it was in our textbooks. That's just "napkin economics".

In 2017, when French presidential candidate Marine Le Pen blatantly lied to the French people about the number of male immigrants and the State's contribution to look after immigrants' welfare, it didn't affect her popularity €" even after people were shown the facts. Banerjee and Duflo outline in their book a couple of experiments that prove that this is a winning electoral tactic, unaffected by fact-checking. "People deliberately exposed to Marine Le Pen's false claims were more likely to want to vote for her. Sadly, this persisted after her statements were fact-checked in front of them. Truth did not sway their opinions. Simply thinking about migration makes people more parochial. The facts aren't allowed to get in the way."

In the case of the CAA and NRC, the government is doing a constant back and forth on its intentions for implementation. It says one thing today and denies it tomorrow, unafraid of of recorded videos, public record and the internet. Because the government knows that if you repeat a lie enough, it'll become the truth.

The myth of the desolate refugee/illegal immigrant

If you look at the world's refugees, the majority of them are from Syria, Iraq, Guatemala, and Yemen, which are far from the poorest countries in the world. Contrary to what citizens of well-to-do nations think, people don't like moving. War and natural disasters may force people to move, but otherwise, an increase in wages, better opportunity and even starvation are not enough. The authors go into a detailed experiment about monga (cyclical poverty and hunger) in Bangladesh, where poor migrants didn't move to cities with more opportunities, even after they had experienced living there and earned higher wages that they had been able to send back home.

Research also indicates that an immigrant population may attract new firms to a certain area, improve the economy due to increased spending on food and daily supplies, increase tax collection and increase the use of financial services due to the need to send money home and saving in the country of residence. Considering all this, India is not a top choice even for persecuted persons from neighbouring countries. They'd much rather go off to Europe. There's no need to panic, just protest peacefully.

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