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A primary purpose of immigration law is to screen ex-ante for those aliens who will abide by the terms of their visas. The federal government’s primary difficulty in meeting this challenge is one of information asymmetry. That is, the typical visa applicant knows more than the government about facts that are critical to the success of her application, such as her history of law-abidance. The traditional response to the challenge of asymmetric information in immigration law has been two-fold. First, the government is obligated to conduct due diligence on the alien applicant’s historical behavior in an attempt to predict the future likelihood of visa compliance. Second, it asks the alien applicant to provide warranties that the information provided is accurate. In the event that the information shared by the alien later turns out to be false, the laws generally impose high penalties such as visa-revocation, which may result in deportation.
Given the high overstay rates among temporary aliens, arguably the traditional emphasis on due diligence and warranties has not proved effective in reducing visa-overstay rates. The economics literature has an obvious answer to solving the problem of information asymmetry. In what has been famously called “hostage taking,” the government is advised to take something of value to the alien applicant, which she will forfeit if she violates her visa terms. Yet despite the obvious applicability of bonding regimes to immigration law, there has been virtually no discussion of such proposals in the legal scholarship. This is perhaps because bonding regimes raise profound distributive justice concerns. That is, the persons who are most likely to apply for visas are the persons “at the bottom of the pyramid” who are least likely to have the resources to post a bond. Moreover, such proposals conjure up images of a Dickensian past, prior to the incarnation of modern immigration law, where bonding systems were pervasive and aliens labored under difficult conditions to pay off bonds. Yet by raising the costs of non-compliance (and presumably lowering overstay rates), the irony is that bonding systems may improve access to US labor markets, and thus improve opportunity sets for precisely the poor migrants who are at the center of a distributive justice framework. This article argues that in modern times, the distaste for bonding systems is misplaced. Indeed, US immigration law routinely uses bond-like mechanisms to screen rich migrants; the question becomes why poor migrants should not have similar opportunities.
The issue is hardly the bonding requirement, but rather the absence of opportunities for poor migrants to access transparent credit facilities on fair terms which they can utilize to finance a bond. This article seeks to mitigate the concerns raised by bonding systems by making labor mobility bankable. It advocates a re-conceptualization of guest worker permits as licenses for temporary admission to the US labor market. In so doing, these visas would not be unlike a range of licenses already granted by the US government, which are routinely used in secured transactions, and which have famously been termed the “new property.” Crucially, if appropriately designed, these visas could serve as collateral-like devices which would allow migrants to access the credit markets. They would then be in a position to finance bonding requirements, thus mitigating significantly, if not extinguishing, distributive justice concerns.
Refreshments will be served.
For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca.
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