The Dark Side of Competitive Government?

Lawrence Auster, the curmudgeonly traditionalist conservative blogger (who you should probably be reading – he’s very intelligent, a great writer, and you will disagree with him 90% of the time) has a spring in his step after reading an AP story about immigrants who are planning to leave Arizona due to the new immigration law:

Most of the illegals interviewed by the AP are planning to go to other states in the U.S., such as California, Texas, and Utah. Excellent. The Arizona law, if it survives court challenges and goes into effect, will create a competitive market among states based on enforcement of the nation’s immigration laws. Those states that don’t pass a law similar to Arizona’s will end up with all the illegals, which will lead most of the illegal alien-attracting states to pass such a law…

(bold mine)

The implications of changes in immigration levels in other states, I fear, may work out exactly as Mr. Auster predicts. The problem is heightened by the fact that many states are facing massive budget crises, that probably aren’t going to get any better anytime soon – Megan McArdle wrote an excellent post arguing that the sovereign debt crisis will be the next one to blow up. So what if all the predictions of conservatives are correct about the detrimental effect of immigration on state budgets, and 2-3 years from now Arizona’s budget is in fantastic shape, and the surrounding states are even deeper in debt? A few things can happen. One is that states could realize that maybe, just maybe, it’s their social democratic policies that are the problem, and not immigrants. (I know, I’m hilarious.) So then these states are left in a situation where they can either a) go bankrupt or b) throw all out all the immigrants. And really, a) will almost certainly lead to b), as a group of legislators that would choose bankruptcy over immigrant-bashing will soon be a replaced by a group of legislators happy to take the other side.

There is a silver lining – any situation in which a large number of states were to put in place Arizona-like laws would lead Congress to undertake immigration reform with urgency. The federal government (especially a democrat-led federal government) and the state government have very different incentives with regard to immigration – the Democrats get votes, better relations with Mexico, and increased revenue from immigration, whereas the states are generally bearing the costs. So, we would expect to see massive guest-worker programs, and also a massive expansion of H1-B visas and the like, in order to circumvent the enforcement of the law. Which might actually leave us with a non-insane immigration policy, where it’s very simple to get into the country legally.

But I don’t necessarily see a reason to be too optimistic. Betting on the rationality of Congress is, as always, a good way to end up in the poorhouse. Because while states may be able to compete on the basis of law enforcement, there’s no competition with regard to the law itself – and it’s that competition that would actually put pressure on governments to act rationally.



