In 2011, a little known American professor co-authored a paper titled “The Economics of International Refugee Law” proposing a radical solution to the growing problems created by the 1951 UN Convention on Refugees. The publication received negligible attention in his home country, and none at all elsewhere. 

That economist was Michael Kremer, now one of the world’s most respected Economists and winner of the 2019 Nobel Economics Prize. Kremer has devoted his academic career to poverty reduction and international development. His CV reads like a don’s daydream; with stints at Harvard, MIT and Chicago, plus a near endless list of awards and fellowships. Last year, Kremer emerged as a leading authority on the pandemic response among developing nations.

The current system punishes good behaviour and rewards bad

With the migrant crisis in full swing and the man having proved his credentials, it’s time to revisit Kremer’s thesis. 

Kremer et al argue that the current refugee system creates a race to the bottom. The nicer you are to refugees, the more will come, creating what becomes an unbearable social and financial burden. By contrast, countries that are hostile to refugees benefit, pushing them away to more compassionate countries. In other words, the system punishes good behaviour and rewards bad behaviour.  

We can see this everywhere. The Nordic countries used to be the most welcoming, but were quickly overwhelmed. A political backlash ensued and far-right parties took off. Now, those countries, led by Denmark, are getting more hostile. Meanwhile, countries such as Poland and Hungary enjoy some of the lowest asylum numbers in the world. France too has worked out that if they are just a bit less friendly, all those refugees will simply carry on up north, passing the problem to the UK. With our enormous voluntary sector and free healthcare system, we have become the patsy in this global game. 

Kremer’s elegant solution is for wealthy nations to pay poorer nations to take migrants. Under this global bidding system, nations adhering to the necessary standards and who bid cheapest would win the refugees. As the paper points out, such a system would create many “positive externalities.” 

The most obvious is that it is really good for asylum seekers themselves. We can set decent universal standards to ensure migrants are integrated and allowed to work, rather than being detained in camps. As Kremer proposes, they could even be given some choice in what country they go to. 

It is also a fairer system: why should one migrant end up in a California condo, and another from the same village get stuck in a Lebanese camp?

Moreover, in the digital age, migrants would not need to make perilous journeys in the hands of human traffickers in order to find safety. From a lounge in London or kitchen in Kinshasa, you could apply for refugee status without all the risks of going on the run. Instead, you simply fill in an online form, and send it to an international body, such as the UN or EU. They would perform some background checks and find you a host country to hear your case. Not only does this defeat the human traffickers, but it also nullifies threats to turn asylum into a weapon by tin pot dictators in the likes of Turkey and Belarus. 

Just as bottle-feeding a five year old can be bad, endless handouts prevent countries developing institutions

The system would also be good for poor countries. Not only do they get money, but they get the incentive to build institutions. In her famous book, Dead Aid, Dambisa Moyo espoused the now widely accepted idea that aid can do far more harm than good. Just as bottle-feeding a five year old can hold back their development, endless handouts and charitable interventions prevent countries from developing their own institutions and solutions. It turns out strong institutions — courts, police, logistics and schools — are essential for development.  And that’s what we need: a developing world solution for a developing world problem. We should encourage emerging nations to set up tribunals, education and social services to process and integrate refugees. Just developing those institutions for themselves would do them a power of good. 

In Britain the red carpet is rolled out, and those who confidently tread down it find themselves walking straight into a social and legal minefield

Like turkeys at Christmas, refugee charities would of course object.  But longer term it would give them a renewed purpose. They would have a key role in monitoring and supporting resettlement countries and communities. 

One of the most trite observations on modern politics is that it has become too partisan; with the left and right taking extreme positions and totally missing any opportunities in the middle. Here indeed is one of those rare win-wins.

Who would benefit from such a system? Most chiefly it would be the average genuine refugee. They would enjoy less hostility, more freedom, a rapid response, no camps and safer passage. In addition, rich nations, poor nations, local communities, international security and the international community would all be better off.

And who loses? Bogus asylum seekers, human traffickers, organised criminals, asylum shoppers, countries trying to use asylum as a weapon, and of course those reviled human rights lawyers.

In other words all the goodies win and all the baddies lose.

This is the perfect solution for Boris Johnson to embrace. This is global Britain at its best: shaking off the outdated hegemony of post-war Europe in favour of fresh solutions with new partners.

And he really needs to move fast. Johnson and Patel are collapsing in the polls, having received the worst ever public approval ratings for their handling of immigration. 76 per cent of people believe they are doing a bad job, and just 12 per cent think they are doing well. 

Who loses? Bogus asylum seekers, human traffickers, organised criminals, and human rights lawyers

Patel and Johnson’s “all hat, no cattle” approach is the worst of all worlds. On the one hand, they have been inviting ever more immigrants to come over — Hong Kongwe’d, commonwealth soldiers, Uyghur Muslims — as well as scrapping salary thresholds for the much vaunted points system. Meanwhile, Patel has been talking tough, creating a hostile environment for those who do come. 

The result is a disaster. The red carpet is rolled out, and those who confidently tread down it find themselves walking straight into a social and legal minefield. No wonder there isn’t anyone who finds this acceptable.

According to the Centre for Policy Studies, immigration is back as the top concern for Tory voters.

Conservative heartlands have made the connection between rising crime, congestion, the housing crisis and all those unpopular building programmes that lost the Conservatives Chesham & Amersham. The red wall knows all too well the costs of poor integration and strained public services. They trusted the Tories to fix it after the Brexit vote.

What has emerged instead is a universal sense of utter betrayal. The politics of betrayal is a dangerous game. It can last for decades. Scottish Tories are still sore about the poll tax, while Labour’s red wall is far from getting over their handling of Brexit. Once trust is lost, it can take a generation to win back.

Fortunately this time, there is a fix. If this idea came from a Trump press conference we could reject it. It doesn’t. It comes from one of the most respected and compassionate economists of our age.

Time to crack on.