weexploretheconsequencesonthepoliticaloutcomeofthefactthatpartiesareei - PDF document

weexploretheconsequencesonthepoliticaloutcomeofthefactthatpartiesareeitherideologicaloropportunisticwithrespecttothisissue.Inordertodothatweuseasimpletwo-partypoliticalcompetitionmodelinwhichtheissuesoverwhichpartiestakepositionsarethelevelofborderenforcementandthewayithastobe…nanced.Weshowthatanideologicalratherthanapureopportunisticbehaviorgivespartiesanadvantagetowintheelection.Thisresultmayhelpustounderstandtherecentsuccessofanti-immigrantandrightistpartiesinseveralcountries.1The…rstquestionthatwehavetoaddressis:whythecontrolofimmigrationmightbetherelevantissueinelections?.Inotherwords:whyimmigrationisimportantforthehostcountry’svoters?Immigrationhaseconomicandnon-economice¤ectsinthehostcountry’ssociety.Regardingtheeconomice¤ects,thereareempiricalandtheoreticalpapersthatanalyzetheimmigration’se¤ectonnatives’labormarketconditions.2Therearealsootherpapersexploringthe…scale¤ectsofimmigrationonthegovernments’budgetandontheprovisionofpublicgoods.3However,thereareveryfewthingssaidaboutnon-economicef-fectsofimmigrationinthehostcountry’ssociety.InthiscontextMayda(2003)lookingatcross-countrysurveydata…ndsevidenceofarobustrelationshipbe-tweenattitudestowardsimmigrationandbothsecurityconcernandculturalandnationalidentityissues.Inthispaperwefocusonthee¤ectofimmigrationonsecurityconcerninthehostcountryi.e.wefocusonhowimmigrationaf-fectscitizens’perceptionaboutthelackofsecurityanddelinquencyinthehostcountry.Despiteofthefactthatimmigrationanddelinquencymaynotberelated,inmanycountries,thesocietyactuallylinksimmigrationwithdelinquency.InEurope,asurveyrequestedbytheEuropeanCommissionpointsoutthatimmi-grationisspontaneouslyaccusedofbeingamajorsourceofinsecurityinmostEU-countries.AnextremeexamplecanbeGreeceinwhichasurveyofthepo-liceshowsthat92%ofthesurveyedpopulationbelievedthattheincreaseinthecrimerateoverthe90shasbeencausedbyimmigrantcriminality(seeKaridis, 1Forexample,theNationalFrontheadedbyJeanMarieLePeninFrance,Haider’sFreedompartyinAustria,Fortuyn’spartyintheNetherlandsorBerlusconi’spartyinItaly.2SeeBorjasetal(1996)3SeeRazinetal(2002)2 1998).RegardingtheUS,apoll(2000)showsthat70%ofrespondentsthoughtthatimmigrantsarethecauseofhighercrimerates(seeCooper,2003).Ontheotherhand,aftertheterroristattacksofSeptember11,2001,thesocialcon-cernaboutinsecurityroseintheUStogetherwiththesociety’sfearofmassiveimmigration.Togetherwiththecurrentriseofmigration‡ows,illegalimmigrationisrisingveryrapidlyinsomedevelopedcountries.IntheUSitisestimatedthattherewere8to11millionofillegalimmigrantsin2003.SomecountriesinEuropeasItaly,GreeceandSpainarealsoreceivinglargenumbersofillegalimmigrants.Regardingthelinkbetweenillegalimmigrationandthesocialperceptionofinsecurity,thereareapriorireasonstothinkthatthelinkbetweenillegalim-migrationandcrimemaybemorerealthanthelinkbetweenlegalimmigrationandcrime.First,illegalimmigrationhasturnedintosmugglingandtra¢ckingofpeopleasalucrativebusinessbyinternationalcrimesyndicates.Frequently,thosemigrantsarecaughtupinorganizedcrimebythesecriminalgangs.4Sec-ond,ingeneralillegalimmigrantsfaceworselabormarketconditionsthereforetheyhavealowercosttoswitchtothecrimesector.Empiricalresultsontheseassertionsarerarebecauseofthedi¢cultytoobtaindataaboutillegalimmigra-tion.Nevertheless,CoronadoandOrrenius(2003)…ndthatillegalimmigrationthroughtheUS-Mexicanborderisnotrelatedwithpropertycrimesbutthereisasigni…cantpositivecorrelationwithviolentcrimes.Inourmodelweassumethatthereexistsapositiverelationbetweenthenumberofillegalimmigrantsthatenterthecountryandthenatives’perceptionofthelackofsecurityinthehostcountry.Therefore,thenumberofillegalimmigrantsthatenterthecountrya¤ectsnegativelycitizens’expectedutility.Moreover,weassumethatthee¤ectsofillegalimmigrationoncitizens’utilitymaybedi¤erentfordi¤erentcitizens.Regardingthisassumption,Mayda(2003)…ndsempiricalevidencethatindevelopedcountriesunskilledworkers’attitudestowardsimmigrationaremorenegativethanskilledones.However,she…ndsthattheoppositeistruefordevelopingcountries.Inordertomaketheanalysismoregeneralwedonotconsideranyrestrictionabouttherelativeintensityofskilledandunskilledworkers’attitudestoimmigration. 4SeeBudapestGroup(1999).3 Additionally,illegalimmigrationisbecominganimportantpoliticalissueinmanydevelopedcountries.Anexampleoftheincreasingimportanceofillegalimmigrationinthepoliticalagendaisthegrowthofthegovernments’expensesdevotedtodeterit.Forinstance,theU.S.governmenthasdramaticallyin-creasedtheenforcementoftheU.Sborderoverthelasttwodecades,raisingtheenforcementbudgetoftheU.S.BorderPatrolfrom$290millionin1980to$1.7billionin1998(in1998dollars).AlsothenumberofhoursthatBorderPatrolo¢cersspentpolicingtheMexicanborderincreasedfrom1.8millionin1977to5.1millionin1997.Asaconsequenceofthisincreaseofenforcement,borderapprehensionsrosefrom200.000in1970to1.5millionin1999.5TheEuropeanUnionisalsopayingspecialattentiontothisissueasitwasshownintheEuropeanCouncilmeetinginSeville.6Inourmodelweassumethatthereexistsanexogenouspotentialmassofillegalimmigrationthatiswillingtoenteracountry.Thegovernmentofthecountrymayimplementalevelofborderenforcementinordertotrytodetersuchillegalimmigrationfromenteringit.Wecaninterpretthelevelofborderenforcementasthegovernment’sexpensesdevotedtoexternalborderprotectionplusdeportationcosts.Weassumethatanincreaseinborderenforcementwoulddecreasethenumberofillegalimmigrantsenteringthecountryalthoughatadecreasingrate.To…nanceborderenforcementthegovernmentchargesanadvaloremper-sonalincometaxonnativeworkers.TheGovernmentmayintroduceacertainlevelofprogressivityinthetaxschemechargingaloweradvalorempersonalincometaxtolowincomeworkersthantohighincomeones.Weassumethatthegovernment’sbudgetconstrainhastobebalanced.Weanalyzethepoliticaloutcomeofatwopartyelectoralcompetitionmodel.Thechoicesofpartiesaretheinstrumentsdescribedbefore:thelevelofborderenforcementandtheprogressivityofthetaxscheme.Wesupposethatpartiesarefullycommittedtoimplementthepolicyannouncedduringtheelectoralcampaign.Weshowtwodi¤erentscenariosdependingonwhetherpartiesare 5SeeOrrenius(2001)andHansonandSpilimbergo(2001).6ThePresidentofEuropeanComission,presentlyRomanoPrody,proposedtostrengthenthecontroloftheexternalbordersbydevelopingtheconceptofanintegratedandcompre-hensive”borderstrategy”forEU.4 opportunisticorideological.We…ndthatwhenpartiesareopportunistic,theuniqueequilibriumoutcomeisthatbothpartieswintheelectionwiththesameprobabilityandproposethesamepairofpolicies.Theseequilibriumpolicieswillcoincidewiththeoptimalpoliciesforthemedianvoter.Nevertheless,whenpartiesareideologicalthepoliticaloutcomeinequilibriumisthatauniquepartysurelywinstheelectionandtheequilibriumpolicyimplementedmaybedi¤erentfromtheoptimaloneforthemedianvoter.Therefore,ideologygivesonepartyanadvantagetowintheelection.Ideologyofapartyisde…nedinourmodelasastrongpreferenceononepolicyinstrument.Inparticular,whenpartiesareideologicalweconsidertwopossibilities:i)bothparties’ideologyisdeterminedbytheprogressivityontaxesandii)bothparties’ideologyisdeterminedbythelevelofborderenforcement.The…rstcasecouldbeappliedtocountriesinwhichillegalimmigrationbecomesanimportantissueveryrecently,andtherefore,itcanbesupposedthatpartieswouldnothaveanideologicalpositiononthisissueyet.Thesecondcasecouldbeappliedtocountriesinwhichillegalimmigrationhasbeenanimportantissueforsometime,andtherefore,itcanbesupposedthatpartieswouldalreadyhaveanideologicalpositiononthisissue.Inthiscontext,oneofourmain…ndingsisthat,inthepresenceofpar-tiesideologicallydeterminedbytheborderenforcement,themoreintensetherelationshipbetweeninsecurityandillegalimmigrationisforskilledworkers,themorelikelythemostrightistpartywinsindevelopedcountries(wherethemedianvoterisskilled).Also,thehigherthenumberofpotentialillegalimmi-grantsis,themorelikelytherightistpartywinsindevelopedcountries.Bothresultsseemtobequiteintuitive.Weshallcommentotherresultsinthelastsectionofthepaper.Therestofthepaperisorganizedasfollows:inSection2weformallydescribethemodel.InSection3weanalyzethepropertiesofthevoters’indirectutilityfunctionswithrespecttothepolicyinstruments.InSection4wefocusonthepoliticalcompetitionconsideringdi¤erentscenarioswherepoliticalpartiesareeitheropportunisticorideological.Finally,inSection6weconcludeanddiscussomeresults.5 2TheModelConsideracountryinwhichpopulationiscomposedbynativeworkersandillegalimmigrants.Inourmodelthenumberandroleplayedbylegalimmigrantsisnegligiblesinceweassumethattheydonothavearelevante¤ectonsocialinsecurityandtheycannotparticipateinelections.2.1NativeworkersNativeworkerscareabouttheirprivateconsumptionandaboutthenumberofillegalimmigrantslivinginthecountry(I).Weassumethatillegalimmigrationhasanegativee¤ectonnativeworkers’expectedutility.Thise¤ectisinducedbythenatives’perceptionthatillegalimmigrationrisedelinquencyandsocialinsecurity.Nativeworkers’expectedutilityfunctionisassumedtotakethefollowingfunctionalform:Ui(ci;I)=ci�iI,(1)whereciistheconsumptionlevelofworkeriandi2R+aparameterwhichmeasurestheimpactofillegalimmigrationontheutilityofworkeri.Nativeworkersreceiveanincomeorsalarywiwhich,afterpayingtaxes,isspentfullyinconsumption.Hence,nativeworkers’budgetconstraintcanbewrittenas:ci=(1�ti)wii=u;s,(2)wheretiisthe”advalorem”personalincometaximposedonworkeribythegovernment.Weassumethatsalariesareexogenouslydetermined.Forsimplicityletassumethatthereareonlytwotypesofnativeworkers:skilledandunskilled,denotedbythesubindexi=u;s.WeassumethatthenumberofskilledandunskilledworkersisSandUrespectively.Wealsoassumethatskilledworkers’wageishigherthanunskilledworkers’onei.e.ws�wu.2.2IllegalImmigrationWeassumethattheamountofillegalimmigrationthatentersthecountryde-pendsontheamountofimmigrationwhichiswillingtoreachillegallythecoun-6 tryanditalsodependsontheresourcesdevotedbythegovernmenttoborderenforcement.Supposethatthereisapotentialmassofimmigrantsthatwantstoenterillegallythecountry(Y)andthatonlyafractionofthismassactu-allyenters(IY).Thatrestrictionontheentryiscostlyforthegovernmentwhichmayspendapositiveamountofmoneyinborderenforcingpolicy(E).Thus,thenumberofillegalimmigrantsthatenterthecountrycanbewrittenasI(Y;E).Weassumethatthenumberofillegalimmigrantsthatenterthecountry(I)decreaseswiththelevelofborderenforcement(E),thatis,IE(Y;E)0;anditincreaseswiththenumberofpotentialillegalimmigrants(Y),thatisIY(Y;E)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.3;” 0;&#x Td[;0.WeinterpretIE(Y;E)asameasureofe¢cacyoftheborderenforcementpolicy.WeassumedecreasingratesofreturnofIwithrespecttothelevelofborderenforcement,i.e.IEE(Y;E)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.3;” 0;&#x Td[;0.Thatis,e¢cacyisdecreasingonthelevelofborderenforcement.Moreover,weassumethatIEY(Y;E)0,i.e.e¢cacyofborderenforcementisincreasingonthenumberofpotentialillegalimmigrants.Finally,weassumethatifthegovernmentspendsnomoneyinborderenforcementallillegalimmigrantswillenterthecountry,i.e.I(Y;0)=Y.2.3Government’sbudgetconstraintThegovernmentusestaxestofundthetotalresourcesspentinborderenforce-mentpolicy.Weassumethatthegovernment’sbudgetisalwaysbalanced,thatis,E=tuUwu+tsSws(3)Noticethatall,workersinthesamegroup(skilledorunskilled)receivethesamesalaryandpaythesamepersonalincometax.However,workersbelong-ingtodi¤erentgroupsobtaindi¤erentsalariesandmaypaydi¤erentpersonalincometax.Weassumethatthegovernmentmayproposeacertainlevelofprogressivityintheirtaxschemes:tu=ts2[0;1];(4)whereisthelevelofprogressivityofthegovernment’staxscheme.Notice7 thatthetaxschemeismoreprogressiveasiscloserto0andconversely,whenitisequalto1weareinthecaseofapureproportionaltaxscheme.Fromthegovernment’sbudgetconstraintwehavethatthelevelofborderen-forcementEo¤eredbythegovernmentisthefollowingfunctionofthepersonalincometaximposedonskilledworkers:E=ts(Uwu+Sws)(5)3IndirectUtilityfunctionsOurmaingoalistoobtainthepolicyoutcomeofpoliticalcompetition,regardingthepolicyinstruments.Todothatwecharacterizetheutilityofthevotersasafunctionofthegovernment’spolicyinstruments:thelevelofborderenforcementEandthelevelofprogressivityofthetaxes.3.1OptimalEfora…xedFirst,wecomputethelevelofEthatmaximizestheutilityfunctionofeachtypeofvoter(skilledorunskilledworkers)foragivenvalueof,subjecttotheworker’sbudgetconstraint.SincegivenapairofvaluesforEand,thebalancedGBC(government’sbudgetconstraint)de…nesauniquevalueforthetaxes,weneedtoconsidertheGBCasanadditionalfeasibilityconstraintinthemaximizationoftheutilityfunctions.Thus,foragiven,theoptimallevelofEforskilledworkersisthesolutiontothefollowingproblem.8:maxEcs�sI(Y;E)s.t.(2)and(5).(6)Substitutingbothrestrictionsintheobjectivefunctiontheoptimizationproblemcanbewrittenas:maxEws1�E Uwu+Sws�sI(E;Y)Solvingforthe…rstorderconditionweobtainaconditiononthemarginale¤ectofEoverillegalimmigrationIforskilledworkers:8 IE(Y;Es())=�ws s(Uwu+Sws)(7)Thisequationde…nesthelevelofborderenforcementthatmaximizes7theskilledworkers’utility(Es)foragivenvalueof.Similarly,foragiven,theoptimallevelofEforunskilledworkersisthesolutiontothefollowingmaximizationproblem:8:maxEcu�uI(Y;E)subjectto(2),(4)and(5).(8)Noticethatsubstituting(5)in(4)weobtain:tu=E Uwu+Sws(9)Substitutingtherestrictionsintheobjectivefunctiontheoptimizationprob-lemcanbewrittenas:maxEwu1�E Uwu+Sws�uI(E;Y)(10)Solvingforthe…rstorderconditionweobtainaconditiononthemarginale¤ectofEoverillegalimmigrationIforunskilledworkers:IE(Y;Eu())=�wu u(Uwu+Sws)(11)Thisequationde…nesthelevelofborderenforcementthatmaximizes8un-skilledworkers’utility(Eu())foragivenvalueof.Noticethatfor=0;sinceIE(Y;E)0forallE2R+;theFOCisnotsatis…edandtherefore,theoptimallevelofborderenforcementforunskilledworkersisthemaximumfeasiblelevel,thatisEmax=Sws:Comparingthedi¤erentoptimallevelsofborderenforcementforskilledandunskilledworkerswecanstatethefollowingtwopropositions:Proposition1Es()isincreasingonandEu()isdecreasingon 7TheSecondOrderConditionisalsosatis…edsince:�sIEE(E;Y)08s2R+8TheSecondOrderConditionisalsosatis…edsince:�uIEE(E;Y)08u2R+.9 Proof.ToprovethatEs()isincreasingonconsidertwodi¤erentvaluesof1and2suchthat,21:Fromtheskilledworkers’FOCwehavethatIE(Y;E)isanincreasingfunctionof:Hence,IE(Y;Es(2))IE(Y;Es(1))butsinceweassumedIEE(Y;E)�0,thisimpliesthatEs(2)Es(1).Thus,Es()isincreasingon:ToproveEu()isdecreasingon;noticethatbythesameargumentweneedtoshowthatIE(Y;Eu(1))IE(Y;Eu(2)).Butthisistruei¤:1wu u(1Uwu+Sws)2wu u(2Uwu+Sws),12Uwu+1Sws12Uwu+2SwsWhichisequivalenttosaythat12:Thus,italwaysholdsandweobtainthatEu()isdecreasingon: Thispropositionsaysthatwhenthereisadecreaseontheprogressivityofthetaxschemeskilledworkerswillpreferahigherlevelofborderenforcementandunskilledworkerswillpreferalowerone.Ifthetaxismoreproportionalskilledworkershavetocontributeless,inrelativeterms,inotherwords,Ebecomescheaperforskilledworkersformoreproportionaltaxschemes.Therefore,agovernmentthattriestoobtainthevoteofskilledworkerswillproposealowerlevelofEformoreprogressivetaxschemes.SimilarlyagovernmentthattriestoobtainthevoteofunskilledworkerswillproposeahigherlevelofEformoreprogressivetaxschemes.Thenextpropositionshowsthatgivenalevelofprogressivityofthetaxscheme()unskilledworkerswillpreferahigherlevelofborderenforcementthanskilledworkersaslongastheillegalimmigratione¤ectontheirutilityishighenough.Proposition2Eu()Es()i¤u stu()wu ts()ws.Proof.SinceIEE(Y;E)�0wehavethatEu()Es()i¤IE(Y;Eu())IE(Y;Es())whichisequivalentto:10 �wu u(Uwu+Sws)�ws s(Uwu+Sws),u swu ws,u sts()wu ts()ws,u stu()wu ts()ws;wherets()=Es() Uwu+Swsandtu()=Eu() Uwu+Sws Thatis,givenalevelofprogressivityofthetaxscheme(),unskilledworkerspreferahigherEthanskilledworkersifandonlyifthemarginale¤ectofillegalimmigrationonaworker’sutilityrelativetowhatshepaytodetersuchillegalimmigrationishigherforanunskilledworkerthanforaskilledworker,i.e.u tuwus tsws:Noticethatifunderalessprogressivegovernment(larger)theoptimalborderenforcementforunskilledworkersislargerthanforskilledworkersitisalsotrueunderamoreprogressivegovernment(smaller).ThisresultcanbesummarizeinthefollowingCorollary:Corollary1If2�1;Eu(2)Es(2)=)Eu(1)Es(1):Givena…xedvalueof,substitutingtheoptimallevelofborderenforcementintheutilityfunctionofeachtypeofworkerweobtaintheworkers’maximalutilityforeachvalueof.Us()=(1�ts(Es();))ws�sI(Y;Es())Uu()=(1�tu(Eu();))wu�uI(Y;Eu())Whatisworkeri’swelfaree¤ectduetoachangeintheprogressivityofthetaxschemeassumingthatthegovernmentisimplementingheroptimallevelofborderenforcement?Achangeinhastwoe¤ectsonworkeri0sutility:11 1.Ataxe¤ect.Achangeinimpliesachangeintheadvaloremincometaxthattheworkerhastopay,andthereforeinherconsumption.Hence,thetaxeffectofworkeriisgivenby:@ci @=�wi@ti(Ei();) @Noticethatthechangeoftheadvaloremincometaxproducedbyachangeinisgivenby:dts(Es();) d=dEs() d(Uwu+Sws)�UwuEs() (Uwu+Sws)2dtu(Eu();) d=dEu() d(Uwu+Sws)+SwsEu() (Uwu+Sws)2SincefromProposition1weknowthat:dEs() d�0anddEu() d0;wedonotobtainspeci…csignsfordts(Es();) danddtu(Eu();) d.Therefore,wecanonlyconcludethatthetaxe¤ectwillbepositiveornegative,dependingonthevalueof.Thatis,assumingthatthegovernmentwillimplementtheoptimallevelofborderenforcementofskilledworkers,adecreaseofthelevelofprogressivityofthetaxschemeleadsthemtochooseahigheroptimallevelofborderenforcement.Dependingonhowintensewillbesuchincreaseinborderenforcementwithrespecttotheirpersonalincometax(ts)willincreaseordecreasewith:Similarly,ifweassumethatthegovernmentwillimplementtheunskilledworkers’optimallevelofborderenforcement,theirpersonalincometaxwillincreaseordecreasewiththelevelofprogressivityofthetaxscheme.Itwillalsodependontheintensityofsuchprogressivitychangeovertheoptimallevelofborderenforcementofunskilledworkers.2.Animmigratione¤ect.Achangeinimpliesachangeintheoptimallevelofborderenforcement,andtherefore,achangeintheamountofillegalimmigrantsthatwillenterthecountry.Thus,theimmigratione¤ectonworkeriisgivenby:�idI(Y;Ei()) d12 SincefromProposition1weknowthat:dEs() d�0anddEu() d0;wehavethatadecreaseintheprogressivityofthetaxes(increaseof)impliesalargeroptimallevelofborderenforcementforskilledworkersandasmalleroneforunskilledworkers.SinceIE(Y;E)0weobtain:dI(Y;Es()) d=IE(Y;Es())dEs() d0dI(Y;Eu()) d=IE(Y;Eu())dEu() d�0Hence,anincreaseofwillreducethenumberofillegalimmigrantsthatenterthecountryiftheoptimallevelofborderenforcementforskilledworkersisimplemented.Howeveritwillincreasethenumberofillegalimmigrantsiftheoptimallevelofborderenforcementforunskilledworkersisimplemented.Noticealsothatanincreaseonwillbepositiveforallworkers(skilledandunskilled)iftheoptimallevelofborderenforcementforskilledworkersisimplemented.Howeveritwillbenegativeforallworkersiftheoptimallevelofborderenforcementforunskilledworkersisimplemented.Whenwesumupbothe¤ectsweobtainthatanincreaseofhasanun-ambiguoustotale¤ectonworkeri’swelfareassumingthatthegovernmentisimplementingheroptimallevelofborderenforcement.Moreprecisely,ifthegov-ernmentimplementstheoptimallevelofborderenforcementforskilledworkersanincreaseofwillmakeskilledworkersbettero¤.However,ifthegovern-mentimplementstheoptimallevelofborderenforcementforunskilledworkersanincreaseofwillreduceskilledworkerswelfare.Thisresultiscapturedinthefollowingproposition.Proposition3dUs(Es();) d�0anddUu(Eu();) d0:Proof.LetT=Uwu+Sws.Ifthegovernmentimplementstheoptimallevelofborderenforcementforskilledworkerswehavethat:13 dUs(Es();) d=�wsdts(Es();) d�sdI(Y;Es()) d=�ws1 TdEs() d+wsUwuEs() T2�sIE(Y;Es())dEs() d=wsUwuEs() T2�ws T+sIE(Y;Es())dEs() dFromthe…rstorderconditionoftheskilledworkers’maximizationproblemweknowthat:IE(Y;Es())=�ws sTSubstitutinginthepreviousexpressionwehave:dUs(Es();) d=wsUwuEs() T2�0Similarly,ifthegovernmentimplementstheoptimallevelofborderenforce-mentforunskilledworkerswehavethat:dUu(Eu();) d=�wudtu(Eu();) d�udI(Y;Eu()) d=�wuEu()+dEu() dT�UwuEu() T2�uIE(Y;Eu())dEu() d=�wuEu()T T2�wu TdEu() d+Uw2uEu() T2+uwu uTdEu() d=Eu() T2��wuT+Uw2u
=Eu() T2��wu(Uwu+Sws)+Uw2u
Thenweconcludethat:dUu(Eu();) d=�Eu() T2wuSws0 14 3.2Optimalfora…xedEWenowcomputethelevelofthatmaximizestheutilityofeachtypeofvotersforagivenvalueofE.WehavethatforagivenvalueofE,theoptimallevelofforskilledworkersisthesolutiontothefollowingproblem.8:maxcs�sI(Y;E)subjectto(2)and(5).(12)Substitutingbothrestrictionsintheobjectivefunctiontheoptimizationproblemcanbewrittenas:maxws1�E Uwu+Sws�sI(E;Y)NoticethattheFOCofthismaximizationproblemis:wsEUwu (Uwu+Sws)20Thus,theoptimalforskilledworkersiss(E)=1forallE�0andanys(E)2[0;1]forE=0.ThismeansthatforallE�0skilledworkerspreferapureproportionaltaxscheme.Similarly,foragivenvalueofE,theoptimallevelofforunskilledworkersisthesolutiontothefollowingmaximizationproblem:8:maxcu�uI(Y;E)subjectto(2),(4)and(5).(13)Noticethatsubstituting(5)in(4)weobtain:tu=E Uwu+SwsSubstitutingtherestrictionsintheobjectivefunctiontheoptimizationprob-lemcanbewrittenas:maxwu1�E Uwu+Sws�uI(E;Y)NoticethattheFOCofthismaximizationproblemis:15 �wuESws (Uwu+Sws)20Thus,theoptimalforunskilledworkersisu(E)=0forallE�0andanyu(E)2[0;1]forE=0.ThismeansthatforallE�0unskilledworkerspreferdonotpaytaxesatall.Givena…xedvalueofE,substitutingtheoptimallevelofprogressivityofthetaxschemeintheutilityfunctionofeachtypeofworkerweobtaintheworkers’maximalutilityforeachvalueofE.Us(E)=(1�ts(E;1))ws�sI(Y;E)Uu()=(1�tu(E;0))wu�uI(Y;E)Whatisworkeri’swelfaree¤ectduetoachangeintheborderenforcementassumingthatthegovernmentisimplementingheroptimallevelofprogressivityofthetaxscheme?AchangeinEhastwoe¤ectsonworkeri0sutility:1.Ataxe¤ect.AchangeinEimpliesachangeintheadvaloremincometaxthattheworkerhastopay,andthereforeinherconsumption.Hence,thetaxe¤ectofworkeriisgivenby:@ci @=�wi@ti(E;i) @ENoticethatthechangeoftheadvaloremincometaxproducedbyachangeinEisgivenby:dts(E;1) dE=1 Uwu+Sws�0dtu(E;0) dE=0Inthiscase,iftheoptimallevelofprogressivityforskilledworkersisim-plemented,(=1)anincreaseinEwillincreasetaxesandthereforelowerskilledworkers’consumption.However,iftheoptimallevelofprogressivityforunskilledworkersisimplemented,(=0)itmeansthattheydonotpaytaxesandthereforeachangeinEwon’thaveanye¤ectinunskilledworkers’consumption.16 2.Animmigratione¤ect.AchangeinEimpliesachangeintheoptimallevelofborderenforcement,andtherefore,achangeintheamountofillegalimmigrantsthatwillenterthecountry.Thus,theimmigratione¤ectonworkeriisgivenby:�idI(Y;E) dE0Whenwesumupbothe¤ectsweobtainthatanincreaseofEhasanunam-biguoustotale¤ectonunskilledworkers’swelfareassumingthatthegovernmentisimplementingheroptimallevelofprogressivityofthetaxscheme.Morepre-cisely,ifthegovernmentimplementstheoptimallevelofprogressivityofthetaxschemeforunskilledworkersanincreaseofEwillmakeunskilledworkersbettero¤.Inthiscase,unskilledworkerswillmaximizestheirutilitywiththemaximumlevelofE;i.eEmax=Sws.However,ifthegovernmentimplementstheoptimallevelofprogressivityofthetaxschemeforskilledworkersanin-creaseofEhasanambiguouse¤ectonskilledworkerswelfare.Dependingonhowintenseistheimmigratione¤ectwithrespecttothetaxe¤ectwehaveagainoralossinskilledworkers’welfare.4PoliticalcompetitionInthemodeldescribedsofarwehaveassumedthatthereexistsagovernmentthatinordertodeterillegalimmigrationimplementsalevelofborderenforce-ment(E).Thisborderenforcementpolicyisfundedbytherevenuesobtainedfromapersonalincometaxovernationalworkers(t)which,bymeansofthelevelofprogressivityofsuchtaxscheme()maybedi¤erentforskilledandunskilledworkers.Thus,thegovernment’schoicesarerepresentedbyatriplet(E;t;)thatsatis…esthegovernment’sbudgetconstraint.Noticethatifthegovernment’sbudgetconstrainthastobesatis…ed,choosingonlytwoofthesethreevariablesdeterminesauniquevalueforthethirdone.Withoutlossofgeneralityweassumethatthelevelofborderenforcementandthelevelofpro-gressivityofthetaxscheme(E;)arethechoicesofthegovernment.Then,theadvaloremtaxwillbegivenbythegovernment’sbudgetconstraintforeachpairofvaluesforEand.17 Inthissectionweanalyzethepoliticalcompetitionbeforethegovernmentiselected.Weconsideramodeloftwopartycompetition.Asweexplainedabove,parties’choicesarerepresentedbythelevelofborderenforcementandthelevelofprogressivityofthetaxscheme(Ej;j).Thus,thepolicyspaceisX=R+[0;1]:Weassumethateverynationalworkervotesforaparty(thereisnoabsten-tion).Illegalimmigrantshavenorighttovote9.Anationalworkerwillvoteforthepartywhoseproposalgivesherahigherlevelofutility.Thatis,workeriwillvoteforaparty1ifUi(E1,1)�Ui(E2,2)andshewillvoteforparty2ifUi(E2,2)�Ui(E1,1).Incaseofindi¤erence,avoterisassumedtovoteforeachpartywithequalprobability.Thegametakesplaceintwostages.Inthe…rststage,partiesproposeacertainpolicyinX.Inthesecondstageeachvotervotesforthepartywhoseproposalwouldgivehimahigherutility.Weassumethatpartiesarefullycommittedtotheirpolicyproposals.Thismeansthatthepartythatwinstheelectionhastoimplementthepolicychoseninthe…rststage.Thewinneroftheelectionisdecidedaccordingtomajorityrule.Incaseofatie,bothpartieswinwiththesameprobability(equalto1 2).Weassumethatpartiesmaximizetheprobabilityofwinning.Thus,thepayo¤functionofapartycanbede…nedas:Vj(Ej;j)=8���&#x]TJ ;� -1;.93; Td;&#x[000;&#x]TJ ;� -1;.93; Td;&#x[000;&#x]TJ ;� -1;.93; Td;&#x[000;:1if#fv:Uv(Ej;j)&#x]TJ ;� -1;.93; Td;&#x[000;Uv(Ek;k)g+B 2�S+U 21 2if#fv:Uv(Ej;j)�Uv(Ek;k)g+B 2=S+U 20if#fv:Uv(Ej;j)�Uv(Ek;k)g+B 2S+U 2where#fv:Uv(Ej;j)�Uv(Ek;k)gisthenumberofvoterswhoprefertovoteforpartyj(j6=k)andB=#fv:Uv(Ej;j)=Uv(Ek;k)gisthenumberofvotersthatareindi¤erentbetweenthetwoparties.So,ifthenumberofvotersthatprefertovoteforpartyjplushalfofvoterswhichareindi¤erentbetweenthetwopartiesislargerthanthehalfoftotalvoters,partyjwillwintheelection.Weconsiderthreedi¤erentscenariosdependingonthecompositionoftheparties’strategyset.Inthe…rstscenario,weassumethatapartyhastode- 9Wealsoassumethatlegalimmigrationshavenorighttovote.Thusonlynativeworkerscanvote.18 cideaboutbothvariablessimultaneously.Inthiscaseastrategyisde…nedas(Ej;j)2X.Thus,inthisscenariopartiesarepurelyopportunistic.Inthesecondscenario,weassumethatthelevelofprogressivityforeachpartyis…xedandtheycannotdecideaboutit.Partiescandecideonlythelevelofborderenforcement.Thus,astrategyforapartyjisEj2R+.Inthiscase,partiesareideologicalwithrespecttotheprogressivityofthetaxes.Thatis,partieswanttowintheelectioninordertoimplementtheirfavoritelevelofprogressivityofthetaxscheme.Finally,inthethirdscenario,weassumethatthelevelofborderenforcementforeachpartyis…xedandtheycandecideonlythelevelofprogressivityofthetaxscheme.Hence,astrategyforapartyisj2[0;1].Inthiscase,partiesareideologicalwithrespecttotheborderenforcementpolicy.Thatis,partieswanttowintheelectioninordertoimplementtheirfavoriteborderenforcementpolicy.Sincethebehaviorofthevotersisunambiguousinthismodel,wede…neanequilibriumofthegameonlyintermsofthestrategiesofthetwopartiesatthe…rststage.Thus,inthe…rstgameapurestrategyequilibriumisapairofvaluesforthelevelofprogressivityofthetaxschemeandthelevelofborderenforcementforeachparty[(Ee1;e1);(Ee2;e2)]suchthatbothpartiesaremaximizingtheprobabilityofwinninggiventhechoicesoftheopponent.Inthesecondgame,given1and2apurestrategyequilibriumisapairofvaluesforthelevelofborderenforcement[(Ee1(1;2);Ee2(1;2)]suchthatbothpartiesaremaximizingtheprobabilityofwinninggiventhechoiceoftheopponent.Finally,inthethirdgame,givenE1andE2…xedapurestrategyequilibriumisapairofvaluesforthelevelofprogressivityofthetaxscheme[e1(E1;E2);e2(E1;E2)]suchthatbothpartiesaremaximizingtheprobabilityofwinninggiventhechoiceoftheopponent.4.1OpportunisticpartiesSupposethatpartiesarepurelyopportunistic,i.e.,theychooseboththelevelofborderenforcementandtheprogressivityofthetaxschemeinordertowintheelections.Animportantvariableforpoliticalpartieswillbethenumberofskilledanunskilledworkersbecausethepreferencesofthemedianvotercoincidewiththe19 preferencesofthemajorityofthesociety.IfS�Uthemedianvoterwillbeskilledand,inordertomaximizetheprobabilityofwinning,partieswilltrytoobtainthevoteofskilledworkers.Givenalevelofprogressivityofthetaxscheme,thelargestutilitythatapartycano¤ertoaskilledworkerisUs(Es();),thatis,theskilledworkers’utilitywhenthegovernmentimplementstheoptimallevelofborderenforcementforskilledworkers.Additionally,givenapositivelevelofborderenforcementE,themaximumutilitythatapartycano¤ertoaskilledworkerisUs(E;1);thatis,theskilledworkers’utilitywhenthegovernmentimplementstheoptimallevelofprogressivityofthetaxschemeforskilledworkers(s(E)=1).Similarly,ifU�Sthemedianvoterwillbeunskilledand,inordertomaximizetheprobabilityofwinning,partieswilltrytoobtainthevoteoftheunskilledworkers.Givenalevelofprogressivityofthetaxscheme,thehighestutilitythatapartycano¤ertounskilledworkerisUu(Eu();),thatis,theunskilledworkers’utilitywhenthegovernmentimplementstheoptimallevelofborderenforcementforunskilledworkers.Additionally,givenapositivelevelofborderenforcementE,thehighestutilitythatapartycano¤ertoanunskilledworkerisUu(E;0),thatis,theunskilledworkers’utilitywhenthegovernmentimplementstheoptimallevelofprogressivityofthetaxschemeforunskilledworkers(u(E)=0)Proposition4WhenpartieschoosebothandEsimultaneouslytheuniqueequilibriumoutcomewillbeatie:bothpartieswintheelectionwithprobabilityequalto1 2.Moreover,apurestrategyequilibriumwillbe[(Es(1);1);(Es(1);1)]i¤S�Uand[(Eu(0);0);(Eu(0);0)]10i¤U�S:Proof.Sincebothpartiesareaprioriidenticalifoneofthemchooses(E;)suchthatitwinstheelectionwithprobability1itcouldnotbeanequilibriumbecauseheropponentmaychoosethesame(E;)andwintheelectionwithprobability1 2.Thus,iftheoutcomeofthegameisnotatie,matchingtheopponent´sstrategyisalwaysapro…tabledeviationforoneoftheparties.Hence,theuniqueequilibriumoutcomewillbethatbothpartieswintheelectionwithprobabilityequalto1 2. 10NoticethatEu(0)=Emax=Sws20 IfS�Uthepartythato¤ersapair(E;)suchthattheutilityofskilledworkersishigherwillwintheelection.Givenapairofvalues(E1;1)with11;party2canwintheelectionwithprobabilityequalto1choosingE2=E1and2&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0 ;&#xTd[0;1.Thusinequilibriumwemusthavebothpartieschoosing2=1=1.Supposethat2=1=1andparty1choosesE16=Es(1);thenparty2canwintheelectionchoosingE2=Es(1).Thus,inequilibriumwemusthavebothpartieschoosingE1=E2=Es(1):Hence,[Es(1);1]hastobechosenbybothpartiesatequilibrium.Similarly,wecanprovethatifU&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0 ;&#xTd[0;S;then[(Eu(0);0);(Eu(0);0)]canbesustainedasanequilibrium. 4.2IdeologicalPartiesWepresentnowtwoscenariosinwhichpartiesareideological.Weconsiderideologyasanstrongpreferenceononeofthepolicyinstruments.First,wesupposethatparties’ideologyisdeterminedbytheprogressivityofthetaxschemeand…nallythatitisdeterminedbytheintensityofprotectionagainstillegalimmigration.4.2.1Parties’IdeologydeterminedbySupposethatthelevelofprogressivityofthetaxschemeis…xedforbothparties(anddi¤erentfordi¤erentparties).Wewilldenotebyleftistpartythepartywhichiscommittedtoahigherlevelofprogressivityofthetaxscheme(l)andrightistpartytheonecommittedtoalowerlevelofprogressivity(r�l).Ideologycanbeinterpretedinthisgameastheprogressivityoftaxschemeso¤eredbyparties.Inthiscasepartiesonlyhavetoproposethelevelofborderenforcement.Wecaninterpretthisscenariotocountriesinwhichtheimmigra-tionbecomeanimportantissuerecentlyandpartiesdonothaveanideologicalpositionyetonit.IfS�U,themedianvoterwillbeskilledandpoliticalpartieswillcentertheirproposalsonskilledworkers.Noticethatthebestthatapartycandointhiscaseistochosetheoptimallevelofborderenforcementforskilledworkers,givenitsownvalueof.ThatisEs(l)fortheleftistpartyandEs(r)for21 therightistparty.FromProposition3weknowthatdUs(Es();) d�0.Sincer�l,itimpliesthatUs(Es(r);r)�U(Es(l);l):Therefore,therightistpartyhasastrategythatguaranteeshimasurewin.SimilarlyifU�S,sincedUu(Eu();) d0andr&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;$ 0;&#x Td[;l,wehavethatUu(Eu(l);l)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;$ 0;&#x Td[;U(Eu(r);r).ThereforetheleftistpartycanwintheelectionsupportingEu(l).Thoselevelsofborderenforcementmayconstituteaparticularpurestrategyequilibriumforeachcase.WecalculateallthepossiblepurestrategyNashequilibriaofthegameandwestatetheminthefollowingProposition:Proposition5Supposelrare…xedandpartieschooseE:(i)ifS&#x-278;Utherightistpartyhasanonemptysetofstrictlydominantstrate-giesEr2R+s.t.Us(Er;r)&#x-278;Us(Es(l);l)andtheequilibriumoutcomeoftheelectionisrightistpartywinstheelectionwithprobability1.(ii)ifU&#x-278;Stheleftistpartyhasanonemptysetofstrictlydominantstrate-giesEl2R+s.t.Uu(El;l)&#x-278;Uu(Eu(r);r)andtheequilibriumoutcomeoftheelectionisleftistpartywinstheelectionwithprobability1.Proof.IfS&#x-278;Uthewinneroftheelectionisthepartythato¤ersthelevelofborderenforcementthatmakesskilledworkersbettero¤.Thengivenalevelofprogressivityofthetaxschemesuchthatlr,thebestrepliesforeachpartycanbewrittenas:BRl=8:El2R+s.t.Us(El;l)&#x]TJ ;� -1;.93; Td;&#x[000;Us(Er;r)ifEr2R+nKEl2R+ifEr2KBRr=fEr2R+s.t.Us(Er;r)&#x]TJ ;� -1;.93; Td;&#x[000;Us(El;l)forallEl2R+g;whereKfE2R+s.t.Us(E;r)&#x]TJ ;� -1;.93; Td;&#x[000;Us(Es(l);l)grepresentsthesetofdom-inantstrategiesfortherightistparty.ItisnoemptysinceEs(r)2K:Thensince,Us(E;r)&#x]TJ ;� -1;.93; Td;&#x[000;Us(E;l)forallE2R+wehavethatiftherightistpartychoosesalevelofborderenforcementEr2Kthenthispartywillwintheelectionwithprobability1.Hence,[(El2R+);(Er2R+s.t.Us(Er;r)&#x]TJ ;� -1;.93; Td;&#x[000;Us(Es(l);l))]arethepurestrategyequilibriaofthegameandtheoutcomeoftheelectionwillbethattherightistpartywinswithprobability1.22 WhenU�Stheproofissimilartotheonewrittenabove. Figure1representstherangeofequilibriumvaluesforthelevelofborderenforcementchosenbytherightistpartywhenS�U. RangeofEquilibriumLevelsofErTosummarize,wheneverParties’ideologyisdeterminedby,rightistpartyhasanadvantagetocaptureskilledworkers’vote,andleftistpartyhasanad-vantagetocaptureunskilledworkers’vote.Thus,theoutcomeoftheelectionistotallydeterminedbythecompositionofthepopulation.4.2.2Parties’IdeologydeterminedbyEWewillassumenowthatpartiesarecommittedtoimplementaspeci…cborderenforcementpolicy.Wedenotebyleftistpartythepartywhichiscommittedtoalowerlevelofborderenforcementandrightistpartytheonecommittedtoahigherlevelofborderenforcement(i.e.Er�El).Thus,ideologycanbeinterpretedinthisgameastheintensityofprotectionagainstimmigration.Assumingthatthelevelofborderenforcementis…xedforpartiestheyonlyhavetoproposealevelofprogressivityoftheirtaxschemes.Wecaninterpretthis23 scenariotocountriesinwhichtheimmigrationbecomeforsometimeanissueandpartieshavealreadyanideologicalpositiononit.IfS�UthemedianvoterwillbeaskilledworkerandgivenacertainlevelofborderenforcementE,anypoliticalpartywilltrytoproposeavalueforinordertogiveskilledworkersalevelofutilityhigherthantheoneo¤eredbyheropponent.Sincethelevelofborderenforcementisgiven,thenumberofillegalimmigrantsenteringthecountryisalsogiven.Thus,partieswillwanttoo¤eravalueforthatminimizesthetaximposedtoskilledworkers.Givena…xedvalueofE,theoptimalvalueofforskilledworkersis=1:Thus,themaximalutilitythatpartyjcano¤ertoskilledworkersgivena…xedvalueofEjisUs(Ej;1):Then,ifUs(El;1)�Us(Er;1)theleftistpartyhasanonemptysetofdominantstrategiesthatguaranteesherasurevictory(thissetwillincludel=1).OtherwiseifUs(Er;1)�Us(El;1)therightistpartyhasanonemptysetofdominantstrategiesthatguaranteesherasurevictory(thissetwillincluder=1).Finally,ifUs(Er;1)=Us(El;1)thenbothpartiescanassureatiebychoosingj=1:Noticethatifbothpartieschoosethevalueforthatminimizesthetaximposedtoskilledworkers(i.e.j=1)therightistpartywillwintheelectioni¤Us(Er;1)�Us(El;1).Thatis:�(I(Y;Er)�I(Y;El)) Er�El�ws Uwu+Sws s(14)WestatethepreviousresultinthefollowingProposition.Proposition6SupposeEr�Elare…xedandpartieschoosethenifS�Uwehavethattherightistpartyhasanonemptysetofstrictlydominantstrategiesandtheequilibriumoutcomeoftheelectionisrightistpartywinstheelectionwithprobability1i¤:�(I(Y;Er)�I(Y;El)) Er�El�ws Uwu+Sws sTheinequalitywritteninthepropositioniscomposedbytwopositivetermssinceEr�ElandIE(Y;E)0.Theoneinthelefthandsiderepresentstheimpactofachangeinborderenforcementpolicyonthenumberofillegalimmigrantsenteringthecountry.Thatisthee¢cacyoftheborderenforcement.24 Theoneintherighthandsiderepresentstheparticipationonthe…nancingoftheborderenforcementpolicyforanskilledworkerrelativetoherillegalimmigrationmarginale¤ectwhenbothpartiesproposetheminimumlevelofprogressivityj=1.ThisPropositionshowsthatthee¢cacyofborderenforcementpolicy(�4I(Y;E) 4E)matters.Inparticular,ife¢cacyishigherenoughrightistpartysurelywinstheelection.However,sinceIEE(Y;E)�0,e¢cacyisdecreasingonEwhichmeansthatthelowerlevelofborderenforcementcommittedtobybothpartiesthehighertheprobabilityofwinningfortherightistparty.Morecomparativestaticscanbedone.Forinstance,asskilledworkers’negativeconcernaboutillegalimmigrationincreases(highervaluesofs)skilledworkerswilltendtovotefortherightistpartyandshewillbemorelikelytowintheelection.Inthiscontext,onecanthinkthatrightistpartiesmighthaveaninteresttoriseskilledworkers’negativeperceptionaboutillegalimmigration.Also,sinceIEY(Y;E)0,i.e.e¢cacyofborderenforcementisincreasingonthepotentialillegalimmigration,ahigherpotentialillegalimmigrationwillhelprightistpartiestowintheelection.Hence,rightistpartyismorelikelytowinastheexternalthreatishigher.Similarly,ifU&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0;&#x Td[;S,themedianvoterwillbeunskilledandgivenacertainlevelofborderenforcementEjanypartywouldchooseavalueofjinordertogivetounskilledworkersahigherutilitylevelthanheropponent.Aswehaveseenabove,sincethelevelofillegalimmigrationisgivenpartieswillo¤eravalueofjinordertominimizethetaximposedtounskilledworkerstofundthegivenlevelofborderenforcement.Inthiscase,givena…xedvalueofE,theoptimalvaluefortheunskilledworkersis=0:Thusthemaximalutilitythatpartyjcano¤ertounskilledworkersgivena…xedvalueofEjisUu(Ej;0):Then,ifUu(Er;0)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0;&#x Td[;Uu(El;0)therightistpartyhasanonemptysetofdominantstrategiesthatguaranteesherasurevictory(thissetwillincludel=0).OtherwiseifUu(El;0)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0;&#x Td[;Uu(Er;0)theleftistpartyhasanonemptysetofdominantstrategiesthatguaranteesherasurevictory.Finally,ifUu(Er;0)=Uu(El;0)thenbothpartiescanassureatiebychoosingj=0.WeknowthatUu(Er;0)&#x]TJ/;ø 9;&#x.963;&#x Tf ;.2; 0;&#x Td[;Uu(El;0)i¤:25 0�u(I(Y;Er)�I(Y;El))Butthisconditionisalwayssatis…edsinceEr�ElandIE(Y;E)0.So,wecanconcludethattherightistpartyalwayswinstheelectionchoosingthemaximumlevelofprogressivityofthetaxschemer=0.Wesetthisresultonthefollowingproposition.Proposition7SupposeEr&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;& 0;&#x Td[;Elare…xedandpartieschoosethenifU&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;& 0;&#x Td[;Stherightistpartyhasanonemptysetofstrictlydominantstrategiesandtheequi-libriumoutcomeoftheelectionisrightistpartywinstheelectionwithprobability1.Proof.SinceEjisgivenwehavethatUu(Ej;j)isadecreasingfunctionofj.Thus,themaximalutilitythatpartyjcano¤ertounskilledworkersgivena…xedvalueofEjisUu(Ej;0):GivenEr&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;& 0;&#x Td[;Elifbothpartieschoosej=0wehavethat:Uu(Er;0)�Uu(El;0)=u(I(Y;El)�I(Y;Er))&#x]TJ/;ø 9;&#x.963;&#x Tf ;.1;& 0;&#x Td[;0Therefore,therightistpartyhasanonemptysetofstrictlydominantstrate-gies(whichincluder=0)andtheequilibriumoutcomeoftheelectionisrightistpartywinstheelectionwithprobability1. So,wheneverparties’ideologyisdeterminedbyborderprotection,composi-tionofthepopulationdoesnotentirelydeterminetheoutcomeoftheelection.Moreprecisely,incountriesinwhichtherearemoreunskilledthanskilledwork-ersrightistpartyhasanadvantagetocapturetheunskilledworkers’vote.So,inthiscase,compositionofthepopulationdeterminesthepoliticaloutcome.How-ever,incountrieswheretherearemoreskilledthanunskilledworkers,skilledworkerswillvotefortherightistpartyiftheiroptimallevelofborderenforce-mentishighenough.Thus,inthiscase,theoutcomeoftheelectiondoesnotonlydependonthecompositionofthepopulationbutalsoinsomeparameterssuchassorY:Sothat,forvaluesofsorYlargeenough,rightistpartieshaveanadvantagetowinindependentlyonthepopulationstructureofthecountry.26 5ConcludingRemarksInthispaperweaskourselveswhetherideologycanbeusefulforpartiestowinelectionswhentherelevantissueisthecontrolofimmigration.Inordertoanswerthisquestionweanalyzedi¤erentscenariosdependingonwhetherpartiesareeitheropportunisticorideological.Inaddition,assumingideologicalparties,weconsiderdi¤erentcasesdependingonwhetherideologyiseitherdeterminedbythelevelofborderenforcementorbylevelofprogressivityonthetaxscheme.Usingaverysimpletwopartycompetitionmodelwe…ndthefollowingconclusions:1.Whenpartiesarepurelyopportunistic,i.e.theycanchoosebothEand,inequilibrium,theyalwaystieandchoosethesamepairofpolicies.Thisequilibriumpoliciescoincidewiththeoptimalonesforthemedianvoter.However,whenpartiesareideologicalinequilibriumthereisauniquewinnerandthepoliciesimplementedmaynotbetheoptimalonesforthemedianvoter.Therefore,ingeneralideologygivesapartyanadvantagetowintheelection.2.Ifillegalimmigrationisanewphenomenoninthehostcountry,i.e.parties’ideologyisdeterminedby,inequilibrium,therightistpartyalwayswinstheelectionindevelopedcountries(wherethemajorityofpopulationisskilled)whiletheleftistpartyalwayswinsindevelopingcountries(wherethemajorityofpopulationisunskilled).Theintuitionbehindthisresultisthatvoterswillvoteforthepartywhogivesthemacheaperborderenforcement.Obviously,therightistparty(lessprogressiveparty)mayo¤eracheaperborderenforcementtoskilledworkerswhileleftistparty(moreprogressiveparty)mayo¤eracheaperborderenforcementtounskilledworkers.Thusifthemedianvoterisskilledtherightistpartywinsotherwiseifthemedianvoterisunskilledtheleftistpartywins.3.Ifillegalimmigrationhasbeenanissueforsometimeinthehostcountry,i.e.parties’ideologyisdeterminedbyE,inequilibrium,therightistpartyalwayswinstheelectionindevelopingcountries(wherethemajorityofthepopulationisunskilled).Thatisbecausepoliticalcompetitionmakepartieschoosehighlevelsofprogressivitywhichimpliesthattheoptimallevelofborderenforcementforthemedianvoter(unskilled)willbealsohigh.Therefore,themostanti-immigrantpartyhasanadvantagetowintheelection.27 However,indevelopedcountries(wherethemajorityofthepopulationisskilled)thepoliticaloutcomedependsonothervariablessuchastheskilledworkers’perceptionabouttherelationshipbetweenillegalimmigrationandin-security,andthee¢cacyoftheborderenforcementpolicy.Inthiscontext,we…ndthatifskilledworkersbelievemoreintensivelythatillegalimmigrationislinkedtodelinquencyandtoinsecurity,inequilibrium,therightistparty(themostanti-immigrantparty)winsmorelikely.Inaddition,we…ndthatastheborderenforcementpolicyismoree¢cacious,inequilibrium,therightistpartywinsmorelikely.Bothresultsseemtobequiteintuitivesinceeitherahighere¤ectofillegalimmigrationonskilledworkers’utilityorahighe¢cacyoftheborderenforcementmakeskilledworkers(themajorityofthepopulation)preferahigherlevelofborderenforcement.4.Inthiscontext,withrespecttothee¢cacyoftheborderenforcementweassumethatitisincreasinginthenumberofpotentialillegalimmigrants.Then,thehigherthenumberofpotentialillegalimmigrantsthemorelikelytherightistpartywinstheelectioninequilibrium.5.Regardingthepolicyimplications,incountrieswhereillegalimmigrationisanewphenomenonthereisnopolicyimplicationbecausethecompositionofpopulationdeterminesthepoliticaloutcome.However,incountrieswhereillegalimmigrationisanoldphenomenonwe…ndsomepolicyimplications.Inthistypeofcountrieswewanttoemphasizethecon‡ictofinterestsbetweentherightistandleftistpartyaboutsomeaspectssuchastheconcernthatskilledworkershaveaboutillegalimmigrationandthee¢cacyoftheborderenforce-mentpolicy.Asfarasourresultsareconcernedanaturalimplicationisthattherightistpartywouldhaveinterestsinrisetheconcernaboutillegalimmigra-tionamongskilledworkersandimprovethee¢cacyoftheborderenforcementpolicy.Nevertheless,theleftistpartywouldhaveinterestsinreducetheconcernaboutillegalimmigrationamongskilledworkersandlowerthee¢cacyoftheborderenforcementpolicy.28 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