Brain Drain: The Shift in Template

“At one time, in the 1960s, there was massive concern in the media and among policymakers in many countries, including India, about the costs of the “brain drain”. Today, that is no longer the dominant narrative.”, explains Prof. Jagdish Bhagwati, as he speaks about the change in the understanding of out-migration of the skilled from the developing countries. The term ‘brain drain’ was popularised in the 1960s, signifying the loss of skilled labour, from poorer, less developed countries to richer countries. The narrative back then (as well as now, among those overcome by a false sense of nationalism), was that the education of this skilled emigrating labour was carried out at the expense of their governments, and that their emigration meant a loss in the country’s human capital. Both of these factors rightly pointed towards what one may view as bad news for the economy, and a reason to view this out-migration as a threat.

William Easterly and Yaw Nyarko argue that poor countries can obtain a positive return from brain drain in their paper titled “Is Brain Drain Good for Africa?”, introducing an alternative possibility of “brain gain”. An interesting feature of brain drain is the desire that many migrants show to send a portion of their savings back home (remittances), which acts as an opportunity that is associated with migration, a means of shifting the template. One way of optimising this opportunity would be to increase remittance flows by reducing the transaction costs that are associated with sending these remittances.

Contrary to this, Prof. V.M. Dandekar claimed, back in 1965 that “The remedy must begin where the disease is located”- he believed that the country’s borders had to inevitably be closed and physical contact with developed countries regulated. In addition, windows needed to be open through which knowledge may enter freely. This was of course, a very long time ago, such that, a twenty-two-year-old writing from her home, socially distant, while the world is in the throws of a pandemic, that was a result of globalised activities, finds it next to impossible to associate. At this point in time, maybe we should move beyond the mercantilist view of development, and focus on the well-being of the individuals within the nation states instead of the development of nation states as a whole.

So now, in looking at this out-migration as an opportunity rather than a threat: Remittances and their easier facilitation are key. Bhagwati also recommends that there be a tax in the form of a ‘brain drain tax’ or the ‘Bhagwati tax’ for individuals that were settling abroad. This incidentally also is the US taxation model, such that people are taxed as per their citizenship, rather than their residence.

Source: “Prospects and Challenges of Out-Migration from South Asia” by Pong-Sul AHN