FAQs: Brazil is Host and Guarantor and Haiti is primary Source

Note: This hypothetical case involving Brazil and Haiti is strictly for the purpose of illustration. It does not reflect actual projects or conversations.

Q: Why would Brazil want to create a city in Brazil for Hatians?
A: Brazil has made a substantial commitment to security in Haiti. Brazilian police officers and soldiers make up the bulk of the UN’s MINUSTAH force which brought crime down from the very high levels that prevailed before the UN intervention in 2004. Unfortunately the earthquake revealed that, between 2004 and 2010, little progress was made in establishing a viable local government. Brazilians may eventually have to ask how long they can stay and what their exit options are if the local government is not making adequate progress towards establishing order. They may conclude that if they need to leave, the right way to do so might be to offer a special reform zone in Brazil where Haitians could at least go and be safe.

Q: Can the central government in Brazil establish a well run city? Don’t they have their own security problems in Rio and Sao Paulo?
A: As the story of the metro in New Delhi suggests, a greenfield location offers unique opportunities to reset norms and rely on opt-in to establish legitimacy. As many middle income countries have also shown, it is relatively easy to establish a working branch of government using the “central bank” model of accountability. Many middle income countries with serious weaknesses in other parts of the government have established very effective central banks. If Brazil established the new city for Haitians using the central bank system of strong executive action combined with accountability and wide discretion in pursuit of a clear mandate, it is quite likely that it would be very well run.

Q: Would Haitians who move to the new city get access to the same kind of social safety net as citizens in Brazil?
A: Voters in Brazil might very well insist that the new city pay for itself. In this case, there would be no transfers from the Brazilians. While this certainly does not preclude the use of a social safety net in the new city, it does mean that average income in the new city would be lower than average income in Brazil. At least initially, the new city would not be able to maintain the kind of transfers and social support that is available in the rest of Brazil. The quality of life there might nevertheless be far higher than in Haiti.

Q: Would Haitians leave the city to go work or collect benefits in the rest of Brazil?
A: As in the hypothetical case of the city in Mauritania, the city government would be responsible for maintaining migration controls that keep residents of the city from illegally entering Brazil.

Q: Would a potential “brain-drain” to Brazil be bad for Haiti?
A: The first point is that Haiti already suffers from severe and very unequal form of brain drain. The well educated and affluent can already leave and often do. What a city in Brazil could do is give a poor Haitian the same options that others already have. This also suggests the right way to ask the question. Will offering Haitians another choice about where they can live be bad for them? The Haitians who move will surely be better off — if not they would not leave. Some of the Haitians who stay behind will also be better off, such as people who work in agriculture in conditions where there are fewer workers for the same amount of land. (This will also reduce the terrible pressure on the environment in Haiti.) The Haitians who will suffer the most when poor Haitians have a choice will be the elites who have privileged access to opportunity in Haiti. They will have lower incomes if there are fewer workers to hire and fewer consumers to sell to. As a result, the existence of a realistic exit option for the Haitian poor might be a powerful spur to the elites to improve the quality of governance and make staying in Haiti more attractive. For this reason, Brazil might want to announce well in advance of their exit that they will open up the new city to migrants when they leave. This way the elites face a deadline by which they must have implemented real reform.