Monday, 19 September 2011

Mobility and democracy

If you graph UK economic performance over 1979-2007 – these look like the natural breaks nowadays – then we do pretty well:



Real GDP per capita 1979-2007 (WDI via Google; log scale)

But at the end of this period, there was increasing immigration to the UK, from Eastern Europe as well as from traditional sources like South Asia. This immigration resulted in growing political dissatisfaction, which came firmly on to the agenda in the 2010 election.

Population growth rate 1979-2007 (WDI via google)

The two great areas of democracy in the world today, the US and the EU, are also areas of free mobility. The US was a frontier society until 1890: dissatisfied employees could move West and find a homestead.

Wagons heading West

Today, it remains a decentralized country – the United States – and the states have been called “laboratories of democracy”. The EU even more so: written into its founding charter are the principles that member states must be democratic, and that labour, like other goods and services, must be free to move between them.

There are many reasons why democracy and mobility might go together. It's no coincidence that dictatorships like North Korea and Cuba are prison states that try to stop their subjects leaving. Mobility might protect you from the tyranny of the majority: political scientists like Carles Boix have argued that democratization is more likely when wealth is mobile, so that the rich no longer fear being expropriated by a poor majority.

On the other hand, mobility brings with it certain problems for systems where good governance depends on the wisdom of the citizenry.

First, intelligent policy-making is always a public good – something that benefits everyone in a community, no matter who pays for it. But freedom of movement makes good governance a public good between communities, as well as within them. Suppose, choosing two countries at random, that Spain is worse governed than France, and therefore a poorer and less pleasant place to live. Without free movement, the citizens of Spain have a strong incentive to do something about that, for example by voting for policies that work better. With freedom of movement, they have a simple alternative: pop across the border. Under the (very idealized) assumption that mobility is free and frictionless, they will continue to do so until “utilities are equalized”: that is, until France and Spain are equally un/pleasant, perhaps because of all the migrants moving into France and using public services.

Of course, that politics is a public good means that self-interested people will never provide enough of it. But existing national communities are organized in ways to get round this problem: they have newspapers which keep people informed and encourage them to participate, national parties to link politicians with an active citizenry, patriotism as a source of willingness to work for the community, and so forth. The political collective action problem within nations is hardly solved, but it is mitigated. That is much less true for the collective action problem between nations.

Another problem for democracies comes from the same source. People are politically ignorant: this is one of the best-established empirical generalizations in political science. It, too, is probably a result of the public good aspect of politics: when you have little influence over something, ignorance is rational. The most reliable knowledge we have about our politicians' performance is not the information we seek out – which is often schematic, sketchy and biased towards our pre-existing beliefs – but what we learn “by accident” in everyday life. If you lose your job, then you can assume the economy is not going very well, and you can (and will) blame the government.

But again, free mobility makes that signal noisier. If your child waits a long time for healthcare, do you blame the government's handling of the NHS? Or do you blame the increased demands placed on the system by more people using it? (Some local authorities have blamed poor performance on immigration in the past.) If free mobility equalizes utility between countries, then good and bad governance are no longer distinguishable.

A final problem with mobility is the issue of fairness between different groups, such as the old and the young. European welfare states are built on intergenerational compacts, and these national compacts vary from country to country. Mobility allows people to arbitrage these differences. Young singles turn up to work in London's vibrant freemarket economy; couples with children can move to take advantage of Holland's education system. These problems are known in America, where there is talk of a “race to the bottom” between states in welfare provision; though at least America has a big-spending federal government to iron out these differences.

None of these arguments make me long for the return of border controls in Europe. But they do show there is some tension between the ideals of democracy and freedom of movement. As long as European countries remain widely divergent in wealth and standards of public services, this tension is likely to stay prominent. Denmark's recent decision to impose border controls even within the Schengen area is one example.