The Diaspora and Development

The migration of skilled labour from developing countries such as India, Korea and in recent years from several African countries has been of concern to these countries. During the decade of the seventies there was much discussion on the pros and cons of imposing a brains tax on the skilled migrants, the proceeds from which would be transferred to the developing countries in the form ofaid. In the recent past though opinion has shifted from the view that migration of skilled people imposes unrecoverable costs on the developing countries to one which sees the skilled migrants - the diaspora - as a positive force in the development efforts of their countries of origin. This paper subscribes to the view that the diaspora makes a sizeable contribution to the developing countries and argues that the social rate of return to a unit of diaspora investment in developing countries exceeds that due to a unit of conventional foreign direct investment (FDI) from the multinationals