Willkommen to Europe: The Political Economy of Migration Policy in Germany

By Nikhar Gaikwad, Kenneth Scheve
2016 | Case No. P85 | Length 54 pgs.

In December 2015, Angela Merkel, Chancellor of Germany and the de facto leader of the EU, faced the challenge of formulating an effective policy response to Europe’s migration crisis. Merkel must decide whether Germany can continue to host large numbers of new refugees in 2016, keeping in mind that over a million had arrived in 2015. Merkel could continue Germany’s relatively open refugee policy, but would need to decide how many more refugees to accommodate. Alternatively, Merkel could seek to significantly reduce the number of refugees, yet would need to formulate an effective set of international and domestic policy measures in order to achieve this objective. This case introduces students to the complex mix of economic and political considerations that guide policymakers seeking to regulate the cross-border movement of people. Students evaluate the labor-market, fiscal, and economy-wide consequences of different types of immigration flows, analyze how cultural prejudice and xenophobia mediate the political integration of immigrants, and study how electoral competition can give rise to right-wing and anti-immigrant movements that influence the overall direction of policymaking in democracies. This case also highlights the challenges faced by countries seeking to promote international cooperation in the domain of economic policymaking and highlights the role of national security, international law, and human rights norms in explaining policy contestation.

Learning Objective

This case introduces students to economic, political, and cultural theories of immigration policymaking and helps students apply these theories to the European migration crisis of 2015. Students learn how policymaking dynamics are informed by (a) the labor market and fiscal consequences of immigration; (b) the cultural repercussions of inter-ethnic demographic change; (c) countries’ international legal and humanitarian commitments. In particular, the case underscores the role of public opinion, voting, and party politics in mediating policymaking dynamics, and explicates how states face persistent cooperation problems when adjudicating economic policies that have distributive dimensions in the global economy.
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