demography to arise, ‘absolutism’ had also to bereplaced by individualism (p. 158). The emer-gence of individualism, Charbit (pp. 160–62)claims, in fact required successful challenge ofabsolutism. Adam Smith, whose work definedthe individualistic concept of homo oeconomicusand theorised population dynamics in the con-text of wage theory, did not explore homodemographicus. Such exploration had to awaitMalthus, whose Essay on Population conceptua-lised ‘mortality, nuptiality, fertility and …mobility’, discussed contraception and age atmarriage as well as epidemics, famine and waras leading causes of mortality. ‘Malthus pavedthe definitive way for modern demography, butalso for an entirely novel trend in social andeconomic thought’ (p. 162).

Is this historical study of population theory inits formative stages by means of concentratingon a few major classics successful? Its Frenchbias, in my view, neglects too much interestingEnglish thought on the topic for this period ofthree centuries, to make this true. English think-ers are ignored with only a few exceptions.These include references to political arithmeti-cians Davenant, Petty and Graunt, while in thecontext of ‘government’ Locke’s contributionsare mentioned, together with those of Hobbesand Filmer. However, those willing to learnmore about the gradual development of popula-tion theory from the early seventeenth centuryto the end of the eighteenth century, will searchthis book in vain since it explicitly confinesitself to a very specialised survey of this impor-tant political, social and economic thought. Theclassical foundations of population theoryreceive only a very restricted examination inthis, nevertheless, quite interesting book.

PETER GROENEWEGEN

School of Economics, The University of Sydney

Exceptional People: How Migration Shaped OurWorld and Will Define Our Future, by IanGoldin, Geoffrey Cameron and Meera Balara-jan (Princeton University Press, Princeton,NJ, 2011), pp. 371.

This book takes the reader on a remarkabletour through the history of international migra-tion, with a particular focus on the more recentpast and on immigration policy. It spans a

bewilderingly wide range of events and issuesand is worldwide in scope. As the title indicates,the key theme in the narrative is that migrantsare ‘exceptional people’. Throughout the agesthey have been a vital conduit for the exchangeof ideas and they have made a major contribu-tion to cultural diversity. But above all theyhave been a dynamic element in economicgrowth and development. The lead author, IanGoldin (formerly a Vice President of the WorldBank) and his coauthors take a genuinely inter-disciplinary approach that draws on a widerange of literature. The result is an account thatis scholarly, well informed, engaging, and that,on the whole, provides sound judgments. Armedwith these insights, the authors provide anintriguing foray into what the future may holdand how policy should be developed.

The book opens with a chapter on the historyof migration from prehistory to Columbus.Beginning with the diaspora out of Africa, theauthors document the spread of humans acrossthe world. But the narrative quickly moves on tomedieval and early modern times. Here, theemphasis is on scholars, diplomats and mer-chants as conveyors of culture and knowledge.Particularly important was long distance trade,beginning with spices and exotic goods andextending to a wider range of commodities asocean shipping improved and the pace of devel-opment quickened. The movement of peoplethat this set in train brought about a process ofcreative destruction in politics and society thatfostered ingenuity and enterprise. Hence, out-ward looking Europe assimilated foreign ideasand expanded while inward looking China wentinto long-term decline.

For some, contact with newly dynamic socie-ties was very bad news. Exploration, conquestand trade led to the decimation of indigenouspopulations of the Americas and Australasia. Italso saw the transportation of more than 10million slaves across the Atlantic, while another5 million were traded in Africa and Asia. (Curi-ously the transportation of convicts is over-looked.) The abolition of the slave tradecoincided with (caused?) the rise in migration ofindentured servants, a rather less coercive formof migration, first among Europeans and thenamong Indian and Chinese labourers. Migrationunder coercion or contract gave way to freemigration but it was not until the middle of thenineteenth century that this turned into a massmovement. With a touch of exaggeration the

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authors note that these migrants ‘built the urbanand industrial world that had come into being atthe turn of the 20th century’.

The ideology of economic openness and liber-alism that fostered mass migration was reflectedin the International Emigration Conference of1889, which defended freedom of movement asa natural right. But within a generation thisethos had been reversed and increasingly toughimmigration controls were imposed. The earlytwentieth century saw policies of ethnic ‘unmix-ing’ in Europe and the rise of immigration poli-cies elsewhere that were both restrictive anddiscriminatory. Some have argued that this pol-icy backlash was due in part to the economiceffects of migration on the living standards ofthe low paid, combined with the development ofthe welfare state and the expansion of the fran-chise (Hatton & Williamson, 2005, 2007). Buthere explanation rests largely on growing cul-tural prejudice, supported by pseudo scientifictheories of racial difference.

Shifting towards modern times, the authorsprovide an overview of the determinants ofmigration, distinguishing micro-level, meso-level and macro-level theories. The micro levelconcentrates on individual incentives, while themeso-level focuses on migration networks andsystems. The macro level embraces the broaddemographic, economic and political influencesoperating at the level of the country or region.While taxonomies like this have a venerabletradition in the literature (e.g. Massey et al.,2005), they do not add up to a unified theory, orat least not to one that would satisfy econo-mists. But it would be unfair to blame theauthors for failing to build a more ambitioustheory than currently exists. There follows anoverview of immigration policy in the present,an account that is rich in detail but does notprovide much in the way of political economy.

Given that the book emphasises the positiveeffects of migration, perhaps the key chapter isthe one on the impact of migration on host andsource countries. The authors cite a well knownWorld Bank estimate that expanding immigra-tion by 3 per cent of the labour force of devel-oped countries would generate gains on theorder of $365 billion (most of which flows tothe migrants themselves), comparing it with the$104 billion gain from removing all trade barri-ers. They also point to the positive fiscal effectsof immigration in host countries. More elusiveis the effect of immigration on the social diver-

sity of host societies, which according to theauthors, imposes short-run costs but brings long-run benefits. In the long run, they suggest, soci-eties that are open to immigration have higherlevels of trust and creativity. They cite the highpercentage of US Nobel laureates that are for-eign born, and the fact that more than a quarterof patents are filed by foreign-born residentswho account for just 12 per cent of the US pop-ulation. While the array of evidence is impres-sive, the authors don’t really come to terms withthe issue of causality – an issue that has dog-ged much of the literature on the impact ofmigration.

The final chapters focus on the future, and onan agenda for policy. The vision of the future asone of ever increasing international migrationpressure is reminiscent of writers such as LantPritchett (2006). It sees the supply of migrantsdriven by growing income inequality betweencountries and by a bulge in young and increas-ingly educated potential migrants from poorregions such as sub-Saharan Africa and SouthCentral Asia. These are just the places whereenvironmental disasters will add further fuel tothe incentive to emigrate. On the demand sidethe authors argue that population ageing in theWest will lead to labour shortages in a range ofkey sectors and growing pressure by employersfor more immigrants, especially those withskills. Accordingly, they predict that existingimmigration policies will become increasinglyuntenable.

So what should be done? Having set the stage,the book provides an agenda for reform. Notsurprisingly the menu includes a progressiveopening of borders, expanding both permanentand temporary immigration programmes in themore prosperous parts of the world, as well asamnesties for illegal immigrants, speeding upthe processing of asylum claims, promotingtransnationalism and widening citizenship rights. Italso includes policies to combat racism andxenophobia through an active reorientation ofpublic discussion to reflect the valuable contri-butions of migrants and to promote religious,cultural and ethnic pluralism. The authors alsosee an important role for global leadership byand through international organisations toencourage cooperation between sending andreceiving countries.

Any book that is as wide ranging as this isbound to have weaknesses. I have two particu-lar gripes. The first is that the authors seek to

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persuade the reader that migrants are ‘excep-tional people’. A narrow reading of this wouldbe that migrants are positively selected, oneducation, skills and enterprise. Yet theory andhistory show that migrant selectivity variesacross time and space. Recent studies havesuggested that in the age of mass migrationimmigrants were not as positively selected aswe once thought, and they were probably evenless so in the age of coercion, convicts andcontracts. The evidence for the more recent erasuggests that migrants have become more posi-tively selected, especially those from the poor-est countries. But the authors fail to present oranalyse this evidence. Had they done so theymight have concluded that this trend was partlydue to restrictive and selective immigrationpolicies – policies that they want to seerelaxed.

My second gripe is that restrictive and dis-criminatory immigration policies are interpretedon the whole as reflecting prejudice, and thepolicy prescriptions that follow largely reflectthis perception. While there is much truth inthat argument, it is not the whole story. As aconsequence, the book fails to build a convinc-ing account of the political economy of immi-gration policy to explain how policy evolvedand what (apart from prejudice) were the keydrivers. In the absence of a fuller frameworkfor understanding who gains, who loses, howattitudes are shaped, and how policy is formedwe have too few tools for prediction. There-fore, when it comes to prescriptions for policyreform, it is easy to agree on what shouldbe done but difficult to see how to make ithappen.

These criticisms aside, this is a fine book thatprovides much insight. It is not an economicsbook and does not claim to be one. But it is abook that many economists, and anyone inter-ested in migration, would do well to read.

TIM HATTON

Australian National University

REFERENCES

Hatton, T.J. and Williamson, J.G. (2005), Global Migra-tion and the World Economy: Two Centuries of Policyand Performance. MIT Press, Cambridge, MA.

Hatton, T.J. and Williamson, J.G. (2007), ‘A DualPolicy Paradox: Why Have Trade and Immigration

Policies Always Differed in Labor-Scarce Econo-mies?’ in Hatton, T.J., O’Rourke, K.H. and Taylor,A.M. (eds), The New Comparative Economic His-tory: Essays in Honor of Jeffrey G. G. Williamson.MIT Press, Cambridge, MA; 217–40.

Massey, D.S., Arango, J., Hugo, G., Kouaouci, A.,Pellegrino, A. and Taylor, E.J. (2005), Worlds inMotion: Understanding International Migration atthe End of the Millennium. Oxford UniversityPress, New York.

Pritchett, L. (2006), Let Their People Come: Breakingthe Gridlock on Global Labor Mobility. Center forGlobal Development, Washington, D.C.

Optimal Monetary Policy Under Uncertainty, byRichard Froyen and Alfed V. Guender (EdwardElgar, Cheltenham, UK, 2008), pp. 352.

In this book the authors provide a comprehen-sive review of optimal monetary policy in thecontext of small, log-linear, macroeconomicmodels that are subject to stochastic shocks.When models contain expectations, they areformed rationally, and policy-makers are gener-ally assumed to minimise quadratic loss func-tions. Examples of the type of models for whichoptimal monetary policy responses are derivedin the book include: stochastic versions of theIS-LM and Mundell-Fleming models; flexible-price models that feature a Lucas supplycurve and the standard New Keynesian policymodel. An obvious advantage of such models istheir analytical tractability; while this mightinvolve some sacrifice in terms of empiricalrealism, it does mean that the economic mecha-nisms that underlie the main results are verytransparent.

The book is divided into two parts. In Part 1,the authors present the main issues and resultsfor optimal monetary policy that emerged fromthe standard macroeconomic models of the1960s, 1970s and 1980s. Chapter 2 begins withPoole’s (1970) classic treatment of optimalinstrument choice within a stochastic IS-LMmodel. The optimal instrument – money supplyor interest rate – depends on the nature ofshocks hitting the economy and a central bankshould target the interest rate if LM shocks arethe major source of uncertainty, but target themoney supply if IS shocks dominate. Theauthors also consider a generalisation this basicresult to the case where a policy-maker canadopt a combination policy, that is, give someweight to both the money supply and interest

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