Volume 21, Issue 83 (3-2022)
refahj 2022, 21(83): 307-348 |
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Moftakhari A, Jafari M, Abounoori E, Nademi Y. (2022). The Effect of Institutional Variables on Brain Drain in Developing Countries: A case Study of the Countries of the MENA Region. refahj. 21(83), : 8
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Introduction: Elite migration is an unbalanced relationship being developed between developed industrialized and less developed countries, during which skilled manpower is transferred from less developed countries to more advanced industrialized countries. It will bring huge profits for the developed counreioes and losses to underdeveloped countries. What is certain is that the outflow of human capital is a wake-up call for countries in transition, as it not only confronts such countries with a shortage of skilled manpower that is very difficult to compensate for, but also their dependence on other countries. The industry is becoming larger. Despite the importance of specialized manpower in leading a country’s economy, statistics show the departure of a large number of scholars in various fields of science who for some reason prefer staying in developed countries to staying in their own country. This phenomenon, known as brain drain, means the transfer of national reserves and capital abroad and the loss of more development opportunities. Brain drain is the international migration of highly skilled and educated people such as doctors, engineers, and specialists from low-income countries to affluent countries. In fact, brain drain represents the flow of human capital in which skills are transferred. In this study, the effect of institutional variables on brain drain in the countries of MENA region during the years 2002-2018 was investigated.
Method: The methodology of this research is econometric methodology, which is based on analytical-applied method. The econometric method used is the Generalized Method of Moment (GMM). In this study, the countries of MENA region as countries of origin or emigration (these countries despite the abundance of natural resources have a significant gap in terms of development indicators, especially indicators of knowledge-based economy and competitiveness in exporting goods with superior technology (These countries also have a significant immigrant population in the United States) and the United States as a destination or immigrant country (which has one of the largest Economic systems in the world and has been the largest immigrant country) has been selected. In fact, it can be summarized that the generalized torque method is one of the appropriate estimation methods in panel data, so that this method considers the effects of dynamic adjustment of the dependent variable. Applying the GMM method to dynamic panel data has advantages such as taking into account individual heterogeneity and more information, eliminating biases in cross-sectional regressions, resulting in more accurate, higher-performance, and less alignment estimates in GMM. Estimated models by GMM method correctly calculate the possibility of sustainability and allow us to consider the problems of migration fit in the field of this research. In general, the dynamic GMM method is more appropriate than other methods for at least three reasons: In this method, endogenous variables can also be used. One way to control the endogenousness of variables is to use a tool variable. An instrument will have the necessary power when it is highly correlated with the variable under consideration, while it is not correlated with the error components. However, it is very difficult to find such a tool. One of the advantages of the GMM method is that it allows the interruption of these variables to be used as appropriate tools for endogenous control. The second advantage of this method is that the dynamics of the studied variable can be considered in the model and the third advantage is that this method can be used in all time series, cross-sectional and panel data.
Findings: Based on the findings of the study and the results of model estimation, each of the institutional variables has a different effect on brain drain from developing societies, some of which reduce and some of which intensify elite migration. The first lag of brain drain, government effectiveness and freedom of expression have a positive effect on brain drain from developing countries (countries of origin) to the U.S (destination country) and the rule of law, economic growth, corruption control, and the quality of law have a negative effect on brain drain and elite migration. Sargan test was used to estimate the validity of the instrument matrix in the model. Sargan test for validation of instrumental variables shows that there is no correlation between instrumental variables and the error term of the model, so the instrumental variables used in the model are valid. Also, the Arelano-Band autocorrelation test confirms the model dynamics and the absence of much higher autocorrelation in the model error component.
Discussion: Human resources are one of the factors that play an important role in the economic growth and development of any society. Expert and elite manpower is one of the assets of a country and as the most important competitive advantage and the rarest resource in today’s knowledge-based economy. Although skilled manpower has a significant impact on the forward movement of a country’s economy, statistics show the departure of a large number of elites and scholars in various fields of science, who for some reason prefer living in developed countries to staying in their own country. The issue of brain drain and elite migration is not a new issue, but a phenomenon that has long been seen in various and dramatic ways in developing countries. Some studies have addressed the positive side and some the negative side. Based on the research results, it is recommended that decision makers in developing countries pay more attention in implementing their policies and legislation and defending the support plans of elites and entrepreneurs and creating a platform for growth and development for the country’s elites based on a meritocracy and merit-oriented system. Also, considering the impact of the rule of law, control of corruption, economic growth and the quality of laws on reducing elite immigration, the necessary institutional reforms to improve property rights, contractualization, social security, competition, transparency and quality of law in the field of economic activities is suggested. Therefore, countries should prepare comprehensive programs to create a dynamic and active environment for human resources and provide the ground for creativity and innovation for the elites to prevent them from leaving their country. In order to reduce brain drain from these countries, creating a strong incentive to retain professionals and elites in their countries and prevent the widespread migration of human resources is the most important and effective long-term policy in developing countries.
Ethical considerations
Contribution of authors
All of four authors were involved in writing this article.
Financial Resources
In order to publish the article, it has not received direct or indirect financial support from any organization.
Conflicts of interest
The authors declared no conflict of interest.
Following Principles of Research Ethics
All of data has gathered with participants’ prior consent, remaining anonymous. In addition, we have obeyed all of research principles including piracy, manipulation etc.
Introduction: Elite migration is an unbalanced relationship being developed between developed industrialized and less developed countries, during which skilled manpower is transferred from less developed countries to more advanced industrialized countries. It will bring huge profits for the developed counreioes and losses to underdeveloped countries. What is certain is that the outflow of human capital is a wake-up call for countries in transition, as it not only confronts such countries with a shortage of skilled manpower that is very difficult to compensate for, but also their dependence on other countries. The industry is becoming larger. Despite the importance of specialized manpower in leading a country’s economy, statistics show the departure of a large number of scholars in various fields of science who for some reason prefer staying in developed countries to staying in their own country. This phenomenon, known as brain drain, means the transfer of national reserves and capital abroad and the loss of more development opportunities. Brain drain is the international migration of highly skilled and educated people such as doctors, engineers, and specialists from low-income countries to affluent countries. In fact, brain drain represents the flow of human capital in which skills are transferred. In this study, the effect of institutional variables on brain drain in the countries of MENA region during the years 2002-2018 was investigated.
Method: The methodology of this research is econometric methodology, which is based on analytical-applied method. The econometric method used is the Generalized Method of Moment (GMM). In this study, the countries of MENA region as countries of origin or emigration (these countries despite the abundance of natural resources have a significant gap in terms of development indicators, especially indicators of knowledge-based economy and competitiveness in exporting goods with superior technology (These countries also have a significant immigrant population in the United States) and the United States as a destination or immigrant country (which has one of the largest Economic systems in the world and has been the largest immigrant country) has been selected. In fact, it can be summarized that the generalized torque method is one of the appropriate estimation methods in panel data, so that this method considers the effects of dynamic adjustment of the dependent variable. Applying the GMM method to dynamic panel data has advantages such as taking into account individual heterogeneity and more information, eliminating biases in cross-sectional regressions, resulting in more accurate, higher-performance, and less alignment estimates in GMM. Estimated models by GMM method correctly calculate the possibility of sustainability and allow us to consider the problems of migration fit in the field of this research. In general, the dynamic GMM method is more appropriate than other methods for at least three reasons: In this method, endogenous variables can also be used. One way to control the endogenousness of variables is to use a tool variable. An instrument will have the necessary power when it is highly correlated with the variable under consideration, while it is not correlated with the error components. However, it is very difficult to find such a tool. One of the advantages of the GMM method is that it allows the interruption of these variables to be used as appropriate tools for endogenous control. The second advantage of this method is that the dynamics of the studied variable can be considered in the model and the third advantage is that this method can be used in all time series, cross-sectional and panel data.
Findings: Based on the findings of the study and the results of model estimation, each of the institutional variables has a different effect on brain drain from developing societies, some of which reduce and some of which intensify elite migration. The first lag of brain drain, government effectiveness and freedom of expression have a positive effect on brain drain from developing countries (countries of origin) to the U.S (destination country) and the rule of law, economic growth, corruption control, and the quality of law have a negative effect on brain drain and elite migration. Sargan test was used to estimate the validity of the instrument matrix in the model. Sargan test for validation of instrumental variables shows that there is no correlation between instrumental variables and the error term of the model, so the instrumental variables used in the model are valid. Also, the Arelano-Band autocorrelation test confirms the model dynamics and the absence of much higher autocorrelation in the model error component.
Discussion: Human resources are one of the factors that play an important role in the economic growth and development of any society. Expert and elite manpower is one of the assets of a country and as the most important competitive advantage and the rarest resource in today’s knowledge-based economy. Although skilled manpower has a significant impact on the forward movement of a country’s economy, statistics show the departure of a large number of elites and scholars in various fields of science, who for some reason prefer living in developed countries to staying in their own country. The issue of brain drain and elite migration is not a new issue, but a phenomenon that has long been seen in various and dramatic ways in developing countries. Some studies have addressed the positive side and some the negative side. Based on the research results, it is recommended that decision makers in developing countries pay more attention in implementing their policies and legislation and defending the support plans of elites and entrepreneurs and creating a platform for growth and development for the country’s elites based on a meritocracy and merit-oriented system. Also, considering the impact of the rule of law, control of corruption, economic growth and the quality of laws on reducing elite immigration, the necessary institutional reforms to improve property rights, contractualization, social security, competition, transparency and quality of law in the field of economic activities is suggested. Therefore, countries should prepare comprehensive programs to create a dynamic and active environment for human resources and provide the ground for creativity and innovation for the elites to prevent them from leaving their country. In order to reduce brain drain from these countries, creating a strong incentive to retain professionals and elites in their countries and prevent the widespread migration of human resources is the most important and effective long-term policy in developing countries.
Ethical considerations
Contribution of authors
All of four authors were involved in writing this article.
Financial Resources
In order to publish the article, it has not received direct or indirect financial support from any organization.
Conflicts of interest
The authors declared no conflict of interest.
Following Principles of Research Ethics
All of data has gathered with participants’ prior consent, remaining anonymous. In addition, we have obeyed all of research principles including piracy, manipulation etc.
Type of Study: orginal |
Received: 2021/01/17 | Accepted: 2022/01/9 | Published: 2022/03/16
Received: 2021/01/17 | Accepted: 2022/01/9 | Published: 2022/03/16
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