21 October 2006

What drives immigration policy?

We happily delegate many decisions to government because politicians and officials are specialists; they have deeper understanding of most of the issues, and we trust them to act on our behalf. Sometimes our trust is misplaced. But even more often, I think, government drifts into policies that have major impacts on citizens' lives, without realising what it is doing. Some of these policies can be self-reinforcing, acquiring an intertia of their own, which makes them very difficult to stop. Much of the western world is, in my view, experiencing this with immigration policy. Immigration has undoubted benefits, but my beef today is about its effects on house prices. I am thinking of New Zealand and the UK, and what I see in those countries is that ordinary working couples who cannot rely on family help are struggling to buy houses. I also think that governments in these countries are now in a position where they feel compelled to keep house prices high, or risk (1) offending middle-class property owners and (2)
a house price crash, leading to a slump in consumption, unemployment and electoral unpopularity. It is in these governments' interest, at least in the short run, to keep immigrants coming to buttress the housing market.

The purpose of this post is merely to point out that this immigration has much wider effects on society than this, and that maintaining house prices is hardly a legitimate policy outcome. Certainly it's on nobody's election manifestoes. Yet it does seem to have become an implicit policy goal; one that's been reached by default, and will be very difficult to reverse, even if some far-sighted politicians see and care about the long-term effects it has on the social fabric of New Zealand or the UK - or the societies that migrants leave behind. Like farm subsidies or a drug habit, policies to support the housing market are far more difficult to end than to start.

More transparency at the outset is essential. If governments want to subsidise wealthy landowners and agribusiness (as most rich countries do) then they should come out openly and say that that is their policy. And if they see high house prices as an end itself, then they should openly admit it, and we could vote accordingly.

I am not of course objecting to immigration. I am though objecting to policies that have huge effects on people being made by default and without any sort of consultation. A Social Policy Bond regime would from its very outset specify explicit policy goals. People would vote for the outcomes they favoured, not for the least unappealing party leader or phatic statements of intent. Greater informed public participation in the political process would not only be an end in itself: it would be a way of securing more 'buy in' to crucial policies, like immigration policy. Immigrants would felt and actually been more welcome and more willing to integrate if the host population had first been consulted about whether they were to be admitted.

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