Trade, Foreign Direct Investment and Immigration Policy Making in the US

This paper argues that immigration policy formation in the US after 1950 can only be understood in the context of the increasing integration of world markets. Increasing trade openness has exposed firms that rely on immigrant labor to foreign competition and increased the likelihood that these firms fail. Increasing openness by other states to foreign direct investment allowed these same firms to move production overseas. Firms’ choice to close their doors or to move overseas decreases their need for labor at home, leading them to spend their political capital on issues other than immigration. Their lack of support for open immigration, in turn, allows policymakers to restrict immigration. An examination of voting behavior on immigration in the US Senate ∗Department of Political Science, Yale University, 115 Prospect St., New Haven, CT 06520; [email protected]. This work was supported by a Congressional Research Award from the Dirkensen Congressional Center. I would like to thank the anonymous reviewers, Judith Goldstein, Mike Tomz, Douglas Rivers, Justin Grimmer, Jan Box-Steffensmeier, Lucy Goodhart, Jeffery D. Colgan, David Steinberg, Ashley Jester, Margaret E. Roberts, James Morrison and In Song Kim for their comments. I would also like to thank Cory Lunde and Tom Nassif from the Western Growers Association for allowing me to access their archives and all their time and support. All errors remain my own. shows that the integration of world capital and goods markets has had an important effect on the politics of immigration in the US and shows little support for existing theories of immigration policy formation. In addition to increasing our understanding of immigration policy, this paper, thus, sheds light on how trade openness and firms’ choice of production location can affect their preference for other foreign economic policies as well as domestic policies such as labor, welfare and environmental policies.