Unlocking migration’s potential through better development financing

If international labour mobility is as powerful a development tool as the evidence suggests, why is there so little serious investment in making it work as a system? That question sits at the centre of this policy brief from the Luxembourg Institute of Socio-Economic Research (LISER), which reviews a decade of World Bank operations and finds a striking imbalance between funding for refugee response and funding for economic migration.

The brief begins from a familiar premise. International migration can reduce poverty, drive investment and support skills transfer, but those benefits depend on deliberate policy choices in both origin and destination countries. Development institutions increasingly speak of labour mobility as part of a national development strategy. LISER asks whether that shift in rhetoric has been matched by meaningful investment.

Across World Bank lending between 2014 and early 2024, the study identifies 160 projects with some migration-related component, together worth around $40 bn. Restricting the analysis to components directly focused on migration reduces the figure to about $15 bn. Even then, most funding is concentrated in refugee-hosting countries, financing housing, education, healthcare and employment. Refugee hosting has rightly been recognised as a global public good and funded accordingly. Labour mobility, however, has not yet been treated as an area requiring long-term system building.

The imbalance becomes even clearer when focusing specifically on worker mobility. Only around $110m dollars over ten years, roughly $11m dollars annually, has been directed towards programmes that increase international worker mobility or prepare workers for jobs abroad. Even less has gone into reducing remittance costs, supporting diaspora engagement or monitoring worker welfare overseas. Overall, the brief estimates that spending linked to refugee response is around 150 times greater than spending on programmes supporting economic migration.

The issue is not simply the scale of funding, but the type of investment being made. Most migration-related finance still takes the form of short-term, project-based interventions. Very little funding is directed towards the durable systems that would allow labour mobility to function as a governed economic architecture: training aligned to international demand, structured worker preparation and recruitment, lower-cost remittance systems, and mechanisms to channel diaspora expertise and capital back home.

The brief does not place responsibility solely on development banks. A major constraint, it argues, is limited demand from developing-country governments themselves. Many policymakers still regard outward migration as a substitute for domestic development rather than as one of its instruments. Existing lending frameworks are also poorly suited to labour mobility, since they focus on single-country engagement while effective mobility systems require coordination across origin and destination countries.

Even so, the brief points to practical examples of what more deliberate investment can achieve. Bangladesh, Nepal and Tonga are using development finance to strengthen technical and vocational systems, so qualifications align with global standards and destination-country requirements. Papua New Guinea is financing recruitment hubs, pre-departure training and support systems for overseas workers. Serbia is supporting diaspora engagement through research networks linking domestic institutions with overseas scientists and entrepreneurs.

These initiatives represent the early stages of what might be called mobility infrastructure: systems that prepare workers for international demand, improve the developmental value of remittances and skills transfer, and create structured channels linking diaspora expertise back into domestic economies. The brief also highlights Global Skill Partnerships, in which destination countries co-finance training in origin countries for skills needed in both labour markets, alongside agreed pathways into overseas employment.

Viewed through this infrastructure lens, the conclusion is difficult to avoid. International finance has invested heavily in migration as humanitarian response but has barely begun investing in migration as a long-term economic system. The LISER brief argues that the world does not lack ideas about how migration can support development. What it lacks is serious investment in the systems capable of making that promise real.