The South Pacific Secret to Breaking the Poverty Cycle

What's working against poverty? International labor mobility.
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Let me tell you a secret about the World Bank. One of the most effective things it ever did to help people break out of poverty is to help them migrate, temporarily, to pick fruit overseas.

Migration to pick fruit is probably not the first thing you think of when you think of the World Bank's work, or the broader global effort to eliminate poverty after 2015. That's understandable, and it helps explain why this remarkable project is so little-known.

It started in the South Pacific in 2006. Tonga is a poor country, with few good jobs and at least a third of the population in poverty. New Zealand is a rich producer of wine-grapes and other fruits, where farm labor is hard to find. World Bank economist Manjula Luthria and many colleagues helped the two countries strike a deal, together with other poor countries in the region: Tonga and others would provide the labor New Zealand needed, for jobs that were the opportunity of a lifetime for Tongan workers.

It was a big blow against poverty. The average Tongan household that participated was earning just NZ$1,400 per year before these jobs. The average worker who participated earned NZ$12,000 for just a few months of work. It multiplied low-income workers' earnings by a factor of 10. Almost no other antipoverty project you've ever heard of can claim that. Imagine what that did to poverty.

Well, you don't need to imagine, because the World Bank rigorously evaluated the impact of the project on families in Tonga. It followed participating and non-participating households, from 2007 to 2010, and compared them. The project caused big increases in subjective and material well-being, durable assets, home improvement, financial access, and children's schooling.

The study's conclusion: This project was "among the most effective development policies evaluated to date." And it did that not by taking money away from New Zealanders, but by adding value to the New Zealand economy.

What's working against poverty? International labor mobility. So you might think that projects like this -- among the most effective ever evaluated -- would be at the center of the global antipoverty agenda. You might think that the World Bank and other aid agencies would scour the globe for similar opportunities, as a centerpiece of their activity. You'd be wrong.

The last time the United Nations set global goals to fight poverty, back in 2000, it completely ignored the power of labor mobility. The Millennium Development Goals, bizarrely, mentioned migration exclusively in negative and harmful terms. Even back in 2000, migrants' remittances to developing countries were much larger than foreign aid. But the framers of the last development goals simply ignored migration.

Later this month, the U.N. will meet to set a new round of Global Goals for development. This time they're doing slightly better than 2000, but not much.

The Global Goals at least mention migration a couple of times. They talk about protecting migrants' rights, and making remittances cheaper. But they decline to mention any possibility of actually facilitating migration, as the World Bank did in one of its most effective antipoverty interventions of all time. Here's how they dance around that topic. One of 10 sub-points, below one of 17 goals, reads:

"Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies."

As Harvard's Lant Pritchett has pointed out, this goal can literally be met even if only a handful of people actually have the opportunity to move -- or even if no people move at all. The goals go dramatically further in other areas, urging rich countries to completely drop trade barriers and massively increase foreign aid. The authors of these goals obviously still think that mobility doesn't matter much for global poverty.

That just does not make sense in a world where remittances to poor countries are several times as large as foreign aid. It does not make sense in a world where barriers to mobility cost the world trillions of dollars every year.

What's working against poverty is international mobility. And it will keep working to help meet the Global Goals for fighting poverty -- largely in spite of them.

Michael Clemens is a senior fellow at the Center for Global Development in Washington, D.C. and a research fellow at IZA Institute for the Study of Labor in Bonn. His research in peer-reviewed academic journals focuses on the economics of global migration, development, and foreign assistance. He holds a Ph.D. in economics from Harvard University and his research has been awarded the Royal Economic Society Prize.

This post is part of a series produced by The Huffington Post, "What's Working: Sustainable Development Goals," in conjunction with the United Nations' Sustainable Development Goals (SDGs). The proposed set of milestones will be the subject of discussion at the UN General Assembly meeting on Sept. 25-27, 2015 in New York. The goals, which will replace the UN's Millennium Development Goals (2000-2015), cover 17 key areas of development -- including poverty, hunger, health, education, and gender equality, among many others. As part of The Huffington Post's commitment to solutions-oriented journalism, this What's Working SDG blog series will focus on one goal every weekday in September. This post addresses Goal 10.

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