Foreign Aid for Rural Development

Catalyst for EU-Algeria Cooperation in Migration Policy?

By Alvina Ahmed


Introduction

The European Union (EU)’s tenuous relationship with Algeria has sparked debate among practitioners and academics focused on immigration policy. The EU has largely failed to incentivize Algeria in cooperating with the EU regarding migration governance. The EU wants to support partner nations in their efforts to promote bilateral cooperation in migration policy.  Policymakers often believe that providing aid to developing nations will deter emigration by supporting local employment and creating “good” institutions.  Empirical evidence of aid deterring emigration is scarce—while some researchers have found aid could deter emigration through economic growth in recipient countries, others concluded that aid would encourage people to leave their country as economic growth allows people to have more disposable income to emigrate. The work aims to show that EU aid provided to the rural development sector does not have a causal link with a change in emigration; while it is possible that rural development can lead to a decrease in emigration over time as development provides the rural population with more resources, the results of this study found no significant evidence to support this argument.


Statement of Purpose

The purpose of this research is to contribute to the bigger question—can foreign aid increase or decrease the rate of emigration—and identify types of foreign aid that an external body could use to compel state leaders to adjust their migration governance regimes. In particular, are rural development aid dollars an effective lever for the EU to persuade Algerian policymakers? Previous studies indicate that leaders are more likely to negotiate bilateral agreements when the agreements help them secure electoral victory.[i] Rural development helps provide more employment opportunities to the local population and strengthen rural institutions against climatic shocks; these are developments that the rural population would find beneficial and as a result, may vote for the leader(s) who brought about the developments.


Case Overview

Algeria has not been incentivized to cooperate with the EU in migration policy. Federica Zardo and Chiara Loschi’s 2020 study mentions that unlike other countries in the Middle East and North Africa (MENA) regions, Algeria “did not negotiate a Mobility Partnership” with the EU, and it did not “support the migration compacts and is not involved in any project funded by the newly introduced EU Emergency Trust Fund for Africa.”[ii]

 Zardo and Loschi’s findings imply that critical junctures and path dependency explain Algeria’s reluctance for cooperation regarding migration governance with the EU.[iii]  The authors state that four critical junctures are especially important in understanding Algeria’s levels of cooperation with EU migration policy: conflict with Morocco after 1963, the Algerian civil war in the 1990s, the September 11 terror attacks, and Arab Spring revolutions in 2011[iv] These critical junctures point to Algeria’s priority in preserving internal security. Zardo and Loschi assert that Algeria’s “borders and border control actors are key institutions [in preserving internal security]” and protecting such borders help Algeria maintain its sovereignty.[v] Furthermore, Algeria’s positioning in MENA regional geopolitics also plays a part in its reluctance to cooperate with the EU. Zardo and Loschi state that “when confronted with establishing partnerships with external and western donors and institutions in the realm of migration and border management, the Algerian authorities have strong concerns about their own regional positioning and how partnerships can impact regional geopolitics.” [vi]To test their argument, Zardo and Loschi used documents drafted from the establishment of the Euro-Mediterranean Partnership (EMP) in 1995, the 2017 Partnership Priorities in the New European Neighborhood Policy (NENP) and internal interviews. The authors found that, while all documents state that the European Union and Algeria would engage in “regular dialogue at the most appropriate level on issues related to mobility, migration, and asylum,” in practice, the EU had failed to incentivize Algeria to cooperate.[vii] While Algeria may be reluctant to cooperate with the EU, migration governance is an issue which is present in Algeria’s foreign policy. According to Zardo and Loschi (2020), the Algerian government emphasized the importance of free movement of Algerian and Maghreb citizens when the Barcelona Process was established in 1995.[viii]

According to Michael Clemens and Hannah Postel (2018), foreign aid does not necessarily deter emigration in developing countries, and aid may even encourage citizens of such countries to emigrate.[ix] The authors investigate the effect of foreign aid in three areas: overall economic growth, job creation for youth, and conflict resolution.  In regards to the link between economic growth and emigration, Clemens and Postel (2018)  cite several studies which have demonstrated that there is little evidence of a negative correlation between the two. Furthermore, Clemens and Postel (2018)  continue by stating that there would be no effect on emigration due to economic growth until developing countries reach around $8,000-10,000 in GDP per capita; for most of the world’s poorest countries, this would not happen until the year 2198.[x] The authors also state that “raising growth by 1 percentage point per year in the average recipient would require on the order of 10 percent of recipient’s GDP in aid;”[xi] in order to achieve this, much higher amounts of aid than currently allocated need to be distributed to the recipient nations. Therefore, the authors conclude that economic growth because of foreign aid would not deter emigration.

Building on Clemens and Postel’s 2018 article, Jonas Gamso and Farhod Yuldashev’s 2018 study analyzed whether aid allocated toward rural development would have a different effect on emigration than aid provided to urban development. Gamso and Yuldashev (2018) found that foreign aid allocated to rural development can reduce emigration in the recipient country whereas foreign aid for urban development would increase emigration. For the link between development in urban areas and its effect of migration, Gamso and Yuldashev (2018) outlined the same factors that are discussed in Clemens and Postel’s 2018 study: people living in urban areas possess skills and disposable income necessary for migrating abroad and are exposed to foreign cultures that may inspire migration.[xii] The authors state that rural residents, on the other hand, prefer to stay in their home nations; however, as Gamso and Yuldashev (2018) mention, this does not mean that rural residents do not emigrate, but that they do so out of necessity (often economic pull) not aspiration).[xiii] Therefore,  this implies that aid-based immigration policy would be more “effective than creating barriers to entry, because it [foreign aid] addresses root causes of emigration such as poverty and underdevelopment.”[xiv] It is believed that foreign aid would improve the living standards in the recipient countries, so that residents of those countries would not have to emigrate in search of better opportunities and living conditions. 


Methodology

Data regarding EU aid allocated to rural development in Algeria was obtained from the EU aid explorer—the official database for aid disbursed by EU institutions and member states—for the period of 2007-2020.[xv] The data was plotted along with the number of asylum applications received by European nations from Algerian citizens. The number of asylum applications is used as a proxy for the total number of migrants as data of total migrants. The number of asylum applications to European nations was used as a proxy for the total number of migrants because (i) it has been identified that asylum applications may have applicants who are economic migrants (ii) the converging interest in migration policy between the EU and Algeria is that both countries want to seal off borders, as Zardo and Loschi (2020) state. Of course, there are many factors that lead to a change in the number of asylum applications: political instability, natural disasters, among other issues. While there may not be a causal link between the  variables—aid to rural development and emigration—the findings can be used to present policy implications to the European Union that may help incentivize Algeria in cooperating with the EU regarding migration governance in relation to rural development.  

 The change over time is analyzed since the rural development process takes years to have a significant impact on the local population. The GDP per capita of Algeria and overall aid from the EU are variables for which the analysis will be controlled. Special attention will be paid to years following critical junctures (i.e., 2008 global recession, 2011 Arab Springs). The implications from the findings will be discussed in the discussion section. Data of asylum applications was collected from UNHCR’s database[xvi] and data of GDP per capita was obtained from the World Bank.[xvii]


Results

The main objective of conducting the quantitative analysis was to investigate changes over time in the amount of aid from the EU allocated to rural development in Algeria and the number of asylum applications from Algeria.

Figure 1: Shows the amount of rural development aid (in Euros) disbursed from the EU to Algeria from 2007-2020, Source: European Commission

Figure 1. shows that there was a decrease in EU aid from 2007 to 2008, a sharp increase from 2008 to 2009, and then a decrease from 2009 to 2010; from 2013 to 2015, the amount of aid allocated to rural development was virtually €0.

Figure 2: Shows the asylum applications received by European nations from Algeria from 2007-2020, Source: UNHCR

Figure 2. illustrates the number of asylum applications from Algeria over time. It shows that the only instances where the number of asylum applications to European nations dropped had been from 2013 to 2014, 2016 to 2017, and from 2018 onwards.  For the first point of decrease in aid in 2010 and increase in asylum applications in 2011, the null hypothesis—that developmental aid from the EU to Algeria does not deter emigration from Algeria—cannot be rejected because the sharp increase in applications was likely connected to the Arab Spring revolutions; in other words, the decrease in aid is likely irrelevant to the number of asylum applications that followed. In Figure 2, there was an increase in aid in 2012 and a very small decrease in asylum applications in 2014. Since this change is again very minuscule, we cannot reject the null hypothesis. Similarly, there was an increase in aid from 2016 until 2018, and there was a decrease in asylum applications from 2018 onwards. This evidence is not strong enough to  support the hypothesis that aid allocated to rural development may, in some part, deter emigration. The changes in the number of asylum applications were likely due to factors associated with critical junctures and external shocks.

Figure 3: Shows the change in GDP per capita (in USD) of Algeria from 2007 to 2020, Source: World Bank

Looking at Figure 3, it appears that Algeria’s GDP per capita is not relevant to either the aid provided to rural development in Algeria or the number of asylum applications from Algeria. In terms of the critical junctures, there was an increase in asylum applications from 2009 onwards (after the global recession) and from 2012 to 2013 (a year after the start of the Arab Spring revolutions). 


Discussion and Conclusion

            This research aimed to investigate whether aid from the EU allocated towards rural development in Algeria would deter emigration from Algeria into European nations over time. The aim of the research was not to discover a causal link between the two variables, and therefore it did not use a bivariate regression analysis. Rather, it aimed to infer if aid disbursed to the rural development sector would correlate with a lower number of asylum applications in the following years.  Prior studies have investigated whether aid would deter emigration from developing countries. While researchers such as Clemens and Postel (2018) concluded that foreign aid may encourage emigration for those residing in the recipient countries, others such as Gamso and Yuldashev (2018) have asserted that aid encourages emigration in urban areas and deters in rural areas. The purpose of this research is not to identify ways to use aid as an incentive to promote barriers in migration between the EU and Algeria, but to promote the use of aid in rural areas to enhance local employment and development against climatic shocks. As Gamso and Yuldashev stated in their 2018 study, people living in rural areas in developing countries often emigrate due to economic necessity rather than out of aspiration as their urban counterparts are more likely to do. If rural areas undergo development, people living in those areas would not need to emigrate out of necessity.

            It is important to note that Algeria does not receive foreign aid solely from the EU. The total Official Development Assistance (ODA) received may have a significant impact on the development of rural areas in the nation. Therefore, the total ODA is not completely relevant. 

In conclusion, as Zardo and Loschi (2020) state, Algeria has largely not cooperated with the European Union in migration governance.  Scholars have debated whether foreign aid provided to developing countries can deter emigration from the recipient nations. While the findings are ambiguous, Gamso and Yuldashev’s 2018 study finds a compelling argument: aid provided to rural areas has a negative association with emigration rates. To contribute to Gamso and Yuldashev’s findings, this research investigated whether aid provided for rural development in Algeria would reduce emigration over time in the following years from when the aid was disbursed; it found no significant correlation between EU aid disbursed and changes in the rate of emigration from Algeria. Our null hypothesis—that developmental aid from the EU to Algeria does not deter emigration from Algeria—cannot be rejected because the sharp increase in applications was likely connected to critical junctures and external shock and not due to a decrease in developmental aid. Therefore, the EU cannot necessarily use more rural developmental aid specifically in pursuing Algeria to cooperate more bilaterally with the EU regarding migration governance. 


Appendix: Figures

Figure 1: Shows the amount of rural development aid (in Euros) disbursed from the EU to Algeria from 2007-2020, Source: European Commission
Figure 2: Shows the asylum applications received by European nations from Algeria from 2007-2020, Source: UNHCR
Figure 3: Shows the change in GDP per capita (in USD) of Algeria from 2007 to 2020, Source: World Bank

Endnotes

[i] Federica Zardo and Chiara Loschi. “EU-Algeria (non)cooperation on migration: A tale of two fortresses” Mediterranean Politics, May 31, 2020 https://www.tandfonline.com/doi/pdf/10.1080/13629395.2020.1758453?needAccess=true

[ii] Ibid.

[iii] Ibid.

[iv] Ibid.

[v] Ibid 8

[vi] Ibid 15

[vii] Ibid 5.

[viii] Ibid.

[ix] Clemens, M. and Postel, H. “Deterring Emigration with Foreign Aid: An Overview of Evidence from Low-Income Countries,” Center for Global Development. 2018. https://www.cgdev.org/sites/default/files/deterring-emigration-foreign-aid-overview-evidence-low-income-countries.pdf

[x] Ibid.

[xi] Ibid 6.

[xii] Jonas Gamso and Farhod Yuldashev. “Does rural development aid reduce international migration? World Development, October 2019. https://www.sciencedirect.com/science/article/pii/S0305750X1830189X?via%3Dihub  

[xiii] Ibid.

[xiv] Ibid 268

[xv] “EU Aid Explorer”  European Commission. Accessed January 1, 2022  https://euaidexplorer.ec.europa.eu/explore/recipients_en

[xvi] “Refugee Data Finder” UNHCR. Accessed Jan 1, 2022 https://www.unhcr.org/refugee-statistics/download/?url=pi3CQz

[xvii] “GDP Per Capita, current US$, Algeria” The World Bank Group. Accessed Jan 2, 2022https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2020&locations=DZ&start=2007

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