Foreign aid and asylum immigration. Does development matter?

This paper tests the influence of aid from rich to developing economies on bilateral asylum inflows. Results show that aid effects on asylum applications are significant, but vary with the level of development of the recipient country. Aid to poor economies – especially in Sub-Saharan Africa – deters asylum inflows, while aid to medium-income developing countries attracts asylum seekers. Aid leads to negative spillovers on applications across donors. At the same time, foreign aid has no incidence on voluntary immigration. Overall, the deterring effects of aid on inflows from poor countries are stronger when transfers are coordinated across donors and are made conditional on economic and institutional improvements in the recipient economy.