Electoral concerns, special interests and illegal immigration

In 2006 illegal immigrants represented four percent of the total number of US residents, and comparable figures hold also for other advanced destination countries. If governments are not able or willing to stick to their “official” immigration policy, why do they set such policies in the first place? The purpose of this paper is to address this apparent puzzle, by developing a political agency model, in which there is uncertainty on the potential supply of immigrants, and politicians – who face a re–election – can either represent the preferences of the median voter or be captured by a pro–migration lobby. If a pro–median politician is in place, illegal immigration can occur only as a result of uncertainty. If, a pro-lobby politician is in power, he might find it optimal to announce a binding migration policy, even if he knows that he will not enforce it, and bring about illegal immigration as to please the interest of the minority which favors more open immigration. Importantly, this type of strategic behavior by increasing the number of illegal migrants above the level arising under uncertainty without strategic motives provides a plausible explanation for the large numbers of illegals observed in advanced destination countries. JEL classification: F22, J61.