Part II examines the consequences of brain drain for the sending countries.

"Based on static partial equilibrium analysis, the "new brain drain" literature argues that, by raising the return to education, a brain drain generates a brain gain that is, under certain conditions, larger than the brain drain itself, and that such a net brain gain results in an increase in welfare and growth due to education's positive externalities. This paper argues that these claims are exaggerated. In the static case, and based on both partial and general equilibrium considerations, the paper shows that (1) the size of the brain gain is smaller than suggested in that literature; (2) the impact on welfare and growth is smaller as well (for any brain gain size); (3) a positive brain gain is likely to result in a smaller, possibly negative human capital gain; (4) an increase in the stock of human capital may have a negative impact on welfare and growth; and (5) in a dynamic framework, the paper shows that the steady-state brain gain is equal to the brain drain so that a "beneficial brain drain" cannot take place, and a net brain loss is likely during the transition.

In this book, discussions on African brain circulation and transnational society provide new insights and point to fertile research and policy agendas. Today, a globally important dilemma concerns citizens who either depart from their homeland to enhance their life chances in a rich society - but possibly contribute to a brain drain for their homeland - or stay home and work - but possibly contribute to a brain waste since conditions at home will not allow them to contribute commensurately with their capability. Increasingly, scholars on the subject of global South-to-West emigrants argue that it is not just a possibility of a brain drain occurring when citizens emigrate or brain waste occurring when they stay home, but rather a brain gain when they emigrate strategically and contribute to development in the homeland.

The debate on the economic implications of skilled migration for the home countries is a long-lasting phenomenon. This issue has been discussed for almost fifty years. During this period, most of the scholars (eg. Bhagwati and Hamada 1974, Portes, 1976) believed that skilled migration is detrimental for the countries of origin, while the host economies benefited from the inflow of skilled labor. Thus the notion of brain drain - harmful for the developing economies, and brain gain - profitable for developed countries - came into being, and is still present in the literature. However, in the mid of 1990s, a new strand of research on skilled migration became visible. This new school - the new economics of brain drain - argued that brain drain must not be detrimental for the countries of origin. Under certain circumstances, migration of professionals from developing economies may be in fact a "blessing in disguise" - and the potential gains could be higher than costs. The economists (such as Mountford, 1997, Beine et al., 2001 and 2003, Stark, 2005) from the new economics of brain drain have renewed the discussion on the economic consequences of skilled migration. However, their optimistic view of brain drain has been heavily criticized. The paper presents the main propositions of this new approach. Then it discusses the claims of the opponents of new economics of brain drain and brings new explanations why the brain drain is detrimental: both on theoretical and empirical ground.

Diasporas play an increasingly prominent role in discussions on foreign assistance and development policy. Governments of migrant-sending countries are working to attract both the talents and resources of emigrants and their descendants while governments of aid-sending countries hope to improve the outcomes of development assistance by engaging the talents and expertise of diasporas. Independently of governments, many diaspora groups or individuals recognize profitable opportunities in their homelands or contribute their time, talents, and resources to improving the quality of life there. This volume examines the development impact of diasporas in six critical areas: entrepreneurship, capital markets, "nostalgia" trade and "heritage" tourism, philanthropy, volunteerism, and advocacy. It is the result of research commissioned by the U.S. Agency for International Development's Office of Poverty Reduction, Diaspora Networks Alliance. Contributors include Roberto Munster, Hiroyuki Tanaka, Carlyanna Taylor, and Aaron Terrazas.

International migration, the movement of people across international boundaries, has enormous economic, social and cultural implications in both origin and destination countries. Using original research, this title examines the determinants of migration, the impact of remittances and migration on poverty, welfare, and investment decisions, and the consequences of brain drain, brain gain, and brain waste.