Abstract
Scholars have commonly understood the brain drain phenomenon as mostly a loss of human capital for developing countries--and little more. As many scholars consider human capital to be an important determinant of economic growth, the brain drain may actively deprive low-income countries of their engines of development. To this date, most poor countries have been unable either to legally compel or to morally persuade their high-skilled migrants to stay in significant numbers. Research shows that even if nations were effective at stemming this outward flow, that would not produce economic growth. Directly preventing the brain drain by closing borders increases rent-seeking, as would-be migrants stay and pursue careers that often detract from rather than foster economic development. This thesis seeks to demonstrate that some of the major determinants of the brain drain, specifically the absence or weakness of institutions crucial to development, poor macroeconomic policy, and the lack of social capital, have been and can best be mitigated by the brain drain itself—by the out-migration of high-skilled workers. High-skilled diaspora who remain abroad influence public policy in their home countries and provide business connections to migrants who return to start businesses; but the biggest impact seems to be produced by migrant information technology workers (ITWs). Whether or not they return indefinitely, ITWs often acquire social capital in information communications technology (ICT) hubs like Silicon Valley, which affords them connections with the venture capital industry in those ICT hubs. Some of this social capital may serve to connect like-minded entrepreneurs with one another and spawn new ideas. Once they have acquired a significant amount of social capital, ITWs then transfer the institution of venture capital to their countries of origin. The influx of venture capital provides more financing for small and medium-sized enterprises, the backbone of an economy, leading to economic growth. Of all available options facing nations combating the economic costs of high-skilled migration, then, the problem itself may also be the best solution. Indeed, the brain drain may be its own antidote.