International aid and migration as a specialization type of small countries

  • O. A. Chugaiev Taras Shevchenko National University of Kyiv


The article analyzes the effects of economy size on international aid receipts and migration. Small developing countries are more dependenton foreign aid and migration than other developing countries. Therefore a particular group of small countries is called MIRAB (Migration, Remittances, Aid and Bureaucracy).While small countries benefit from bigger international aid receipts per capita, relative to GNI or gross capital formation, aid relative to import is not much bigger than in large countries. The reasons of preferential treatment for small countries is their vulnerability to foreign economic and natural disaster shocks, distribution of votes in international organizations, better transparency of international aid use, lower costs of the image of a donor, trade opennessand trade deficits, and reluctance to help very large countries.Small states have larger emigration and immigration ratios, but especially suffer from brain drain and low probability of repatriation. The reasons include deep specialization of production, lower demand for skilled labor in exporters of raw materials, vulnerability to external shocks, impossibility of domestic migration. On the other hand small countries can face larger immigration quotas and benefit from transfers from emigrants.The MIRAB phenomenon also can be incident to some larger states. Originally the middle sized economy ofUkrainewas less dependent on international aid, but under the recent economic crisisits ratio to GNI and gross capital formation increased substantially. There is some similarity ofUkrainewith small countries by indicators of migration. But larger economy and territory provide better opportunities for domestic migration. Trends in personal remittances are also better than in small countries.


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