Migration, Trade, Capital, and Development: Substitutes, Complements, and Policies - Migration, Trade, and Development: Proceedings of a conference hosted by the Federal Reserve Bank of Dallas, October 6, 2006

T he postwar era is not the first experience the world has had with globalization in all its dimensions. The current episode can, however, be distinguished from its nineteenth century predecessor by its scale—a world of six billion inhabitants, massive movements of goods, services, and capital—as well as by continuously falling communication and transport costs and the instantaneous nature of information flows and stakeholder reaction possibilities. When war and interwar autarky ended in 1945, international trade was first to pick up, followed by a renewal of public capital movements, initially to Europe and subsequently to developing countries. Next came private portfolio capital and foreign direct investment (FDI), quickly dwarfing public capital flows, known as Official Development Assistance (ODA). The economic migration of people, excluding refugees and asylum seekers , has lagged substantially behind. That's largely because barriers to the movement of people remain high—despite calls and considerable action for increased freedom of trade, capital, and associated technology mobility. This dimension of globalization tends to cause the strongest political resistance; when domestic workers are seen to be threatened by some combination of technology change, imports, and immigrants, it is invariably the last of these that generates the largest rhetorical and policy response. Nevertheless, pressures for enhanced migration are rising, certainly in the less-developed origin (O) countries but also in some quarters of the more developed destination (D) countries. The very fact that migration has lagged substantially behind the other dimensions of globalization also makes it the largest