Migration As A Governance Signal: World Bank Governance Indicators Predict Beoe Outflow Volumes In Pakistan (1996-2024)

Abstract

This study examined the full time-series (1996–2024) of the values of the World Bank Governance Indicators (WBGIs) to predict the volume of brains being lost through the Bureau of Emigration and Overseas Employment (BEOE) registers. This paper addresses that need. It used six WBGIs voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption as independent variables and total BEOE annual outflows as the dependent variable. Both short run and long run relationships are estimated using the bounds test approach in the Autoregressive Distributed Lag (ARDL) model. To solve the vicious circle hypothesis that is, whether governance deterioration Granger-causes emigration acceleration, or emigration Granger-causes governance deterioration, or both Granger causality tests were used. The results indicate that political stability, government effectiveness and rule of law have negative and statistically significant long-run relationships with BEOE outflows, that is, the better the governance the less the emigration. The correlation of control of corruption is positive and relatively large in the short run, indicating that anti-corruption efforts – as they are visible – generate pressure for transitioning migration. The results of the Granger causality tests reinforce the vicious circle hypothesis as there is bi-directional causality between BEOE outflows and political stability. Emigration also Granger-causes government effectiveness, which is the first time-series evidence that brain drain reduces the institutional capacity of the government of Pakistan. The paper finds that governance deterioration is both a push and a pull factor for emigration and thus results in a self-reinforcing political economy trap. The conclusions will have policy relevance for Pakistan's migration governance reform agenda.

Keywords:

ARDL bounds testing; BEOE; brain drain; Granger causality; governance indicators; Pakistan; political economy; vicious cycle; World Bank Governance Indicators.