Global human migration has become a particularly salient issue. It was reported in 2017 that due to civil wars, climate change, and political instability, the number of refugees has increased to record highs (UNHCR 2017). The rise in migration has placed increasing pressure on destinations such as the European Union (EU), Japan and the United States to manage their migratory flows. Many see foreign development assistance as the solution to deter migration. The EU’s new initiative to draw new private sector funds, in addition to existing public spending, to donate to origin countries to address the drivers of migration, such as poor economic opportunity (Bercetche 2018) is the most recent example of this.
The focus of this paper is on official development assistance (ODA). It is defined as “government aid designed to promote the economic development and welfare of developing countries.” Loans and credits for military purposes are excluded (OECD 2018). Developed countries have been using ODA to curtail migration. This policy tool is predicated on the belief that if developed countries can raise the quality of life of potential migrants in origin countries, then individuals will be less inclined to migrate. Beyond the capital allocation question of whether these billions of dollars in funds are effective, there lies a human motivation. Migration is not easy. Year-to-date in 2018, there have been 2,806 migrant fatalities due to the physical journey alone (International Organization for Migration 2018). Therefore, studying the effectiveness of developmental aid policies can help policy makers to direct funds more efficiently, and improve welfare on a global basis by reducing the percentage of people risking their lives and allowing for greater development in majority sending countries.