 I'm going to be introducing the topic and why I think it's relevant to study, why I think it's important to spend time doing research on this. And then I'm going to be introducing some stylized facts from the literature on foreign aid which I think are quite useful and for the interpretation and for the understanding of the results that I'm going to be presenting here. Then I'm going to be introducing some theory, especially the channels to which foreign aid can affect migration. They are both indirect and they operate through growth and welfare effects predominantly, but we'll see them in a minute. Talking about also the empirical literature on this topic, then I'll focus on our contribution, so why we improve upon the existing literature, and then conclusions to say if I've got time I'll also talk about further research a little bit. So why it's relevant? So to quote Parsis and Winters, the influence of ODA, the overseas development assistance on migration is a topic of some intrinsic interest by itself, but we can say that its intellectual interest has been dwarfed by its relevance to the policy debate over the last 20, maybe more years, and this is true especially nowadays because we've got the refugee crisis, we've got thousands of migrants arriving to the South Mediterranean coasts, so new migration policies become a sort of a key priority for the European Union and especially to, so there's a growing pressure to find an effective way to collectively deal with the crisis. And in this context, so some politicians say, not all of them, but some politicians advocate that increasing foreign aid is a solution to this so-called migration crisis. So it's thought as a sort of a key recipe to stem migration flows from developing countries, so the main argument is this one, we create development over there, that's what they say, and so they will not come over here, so this is the argument. And one of the reasons why I started doing this research is that when I wrote this in the headlines of the newspapers, but is it actually true, I mean there is some evidence that points this direction, so that's why I started to investigate a bit more. So two quotes to reinstate this argument, so let's read, so maybe the second one from Barroso. We must also continue our political and development action to improve the living conditions in a country of origin, working with them there so that people don't have to flee their homes and come over here, so you can see that the argument of foreign aid to prevent migration is quite, has been brought upon by many politicians in the last few years. The stylized facts I was talking about, so on the foreign aid literature, which I think are quite useful for the understanding of the results I'm presenting. So I don't know if you're aware of the commitment of the donor countries to give like 0.7% of their GDP to developing economies in terms of foreign aid, I mean even though very few countries met this sort of requirement, we can see that foreign aid is increasing, especially after year 2000, we can see sort of a spike. So the first analyze fact is that the foreign aid is increasing, however, foreign aid allocation reflects much more the interest of donors rather than the interest of the recipients. So what I mean is that determinants sort of like political connections like colonial relationships matter much more than the GDP per capita, so the countries needs, the recipient needs, actual needs. So here is a very basic regression that is not our work, I took it from Keon in 2014. As you can see the effect of GDP per capita is always positive and statistically significant on foreign aid allocation. So it's a distortion, so basically like the richer you are among the developing, the context of the developing countries, the more foreign aid you get. Besides this distortion at the LDCs, so that the countries most in need, they depend quite a lot on foreign aid. As we can see here, the composition of external finance in LDCs is composed by 72% of ODA official development assistance. The last analyze fact that I want to talk about is that foreign aid is heterogeneous. What I mean with heterogeneous is that usually like in empirical literature foreign aid is considered like the effect of gross disbursements on outcomes like growth or welfare services, whatever. But I mean ODA is not only one thing, it varies. There are many types of ODA, so it might be transferring cash in kind. And also there is a very large percentage of non-transferred aid. For instance what I show here is that countries like Sweden spend 30% of their foreign aid within their borders, which is basically for cost for foreign aid to host refugees within their terminal borders. So back to our research question, if we want to test whether foreign aid has an effect of migration directly through growth or welfare effects, of course like the aid that doesn't even reach the developing countries likely to have a negligible, definitely lower effect. So these are the external facts. Back to their search question, but foreign aid does actually reduce migration flows. There is something that tells us that this is true in the theory, but in the theory the impact is not clear cut. We got two opposite, we got two contrasting forces. So we got the income channel on the one hand which is a positive effect and a budgetary constraint, sorry a negative effect, the budgetary constraint channel which has a positive effect. So the argument is as follows. So the additional income that is created through foreign aid will basically create incentives in the countries of origin to stay rather than leaving. So employment and income opportunities, so incentives to stay rather than leaving. And this is the income channel. The budgetary constraint channel basically says that this additional income that is created basically is going to serve to finance the migration cost. So that's why there's a positive channel. For the theory we got these two contrasting channels, but for the empirics there seems to be some agreement, some consensus on a positive effect. So the results confirm the hypothesis of the view that foreign aid doesn't reduce migration flows in poor countries. So the budgetary constraint story seems to prevail. Very briefly on the empirical literature, definitely Faini and Venturini, as the paper probably is the most important one, which is what I'm mentioning is quite old, 1993, but it postulates that income growth may fail to reduce immigration because, again, it relaxes credit constraints which tend to be especially binding in poor context. So this is related to the inverted U-shaped hypothesis, which is well known by development economists. So on the X, we got GDP per capita, and on the Y, we got the migration rate. So we got a positive slope for low level of income per capita, and the slope becomes negative after a certain threshold. So that's what they use to justify the budgetary constraint channel. So the budgetary constraint tends to be especially binding for the first part of the graph, and then is less and less binding. Another paper that is worth mentioning is Bartele Mietal, which is basically a cross-section with both bilateral aid and recipient's total aid, which have both significant positive impacts on migration. I mentioned it because this is going to be sort of the main empirical model, sort of the workhorse that we use in our empirical analysis. So they combine both bilateral aid together with total aid received by the consulate of origin. The bilateral aid is sort of a network channel because the idea behind it is that the more bilateral aid, the more contacts between the two countries you have, so the more information the migrants have to move to the country where it's sending the official development system. So finally, how are contributions? So how do we contribute in this future? So I'll think in many ways. So first of all, the model of the paper of Bartolini that I mentioned relies on a pure cross-section for year 2000. And we add a time dimension, so we are able to capture the multilateral resistance of migration, which applies to international trade but also applies to international migration as well that we've been talking about a few minutes ago. And the most important innovation, we think, is that we introduce migrant flows rather than stocks as a dependent variable. So all the studies that I showed before, they use like the effect of foreign aid on migration stocks. But these we argue that tells little about the impact of foreign aid on the migration decision. Because the stocks who are residing in a country of destination may be living there for decades. So it doesn't tell you anything about the decision to migrate in year T. So and we introduce flows and we anticipate that we are going to be having like very different results. We micro-found our econometric model. We run separate regression for poor and rich in recipient countries, which enables us to test whether the budgetary constraint channel is indeed relevant at low levels of per capita income. And we add a variety of fixed effects and we include several controls for the quality of governance in the country of origin rather than environmental factors and the presence of conflicts. So this is just simple correlation. So we are now into causality here. But this tells us that we already see that there seems to be a negative relationship between foreign aid, which is the RX, total aid received by the country of origin and the migration rate that you got on Y. What happens if we separate the whole sample in, we split the sample in two according to the GDP per capita. So the pattern would change if we, for different countries, whether they are relatively rich or relatively poor. No, we do pretty much have the same results. So this seems to point in a direction where, well, the budgetary constraint story doesn't seem to explain the results here. So it doesn't seem to hold anymore. We use a gravity model, which is built on Bayonet Parsons 2015. And of course, this is the workhorse, like to bring the data into an econometric model, actually, to get some estimates out of it. So bilateral migration rates is a dependent variable, which is a function of many controls. So our main variable of interest is going to be this one, which is total aid received by country of origin and time t minus 1. And as I said, there are many controls. Notice that the stocks that order papers use as a dependent variable here, we include it as a control. Because of course, we think that the flows of migrants at time t, they may depend on the stock because the information channel that you got in a country of destination. So this basically will trigger migration flows. So the higher the stock, the higher the flows. Yeah, so let's see the estimates. So these are the estimates. We got five columns. The first three, they estimate the same model with a different set of fixed facts. So what you can see here, like in a red box, you can see our parameter of interest, which is total aid, again, received by the country of origin. And it's always negative and statistically significant. The third column is our full specified model. And the fourth and fifth column we divide, as I already explained, to sample in two between relatively low levels, sorry, the sample in two, in terms of GDP per capita. And again, we got a negative result. So again, the budget constraint theory seems not to be binding. Another robustness check that we conduct is to look at different types of foreign aid. Remember that one of the stylized facts was the aid is heterogeneous. Here we use the share of humanitarian aid and the share of technical cooperation. And we got different, actually opposite results. We got a positive sign for technical cooperation. And we got a positive sign for humanitarian aid and a negative sign, again, for technical cooperation. The idea behind is that humanitarian aid is less development oriented. So it's very much like a short-term type of aid, which is sent for emergency reasons. Whereas the purpose of technical cooperation is more towards development. So that's why this would point to the income channel story rather than the budgetary constraint story. We replicate the same model for each cross-section. Remember that I mentioned the Bartolimi paper. And it was a cross-section for year 2000. So in the first column, you see what happens when you have like the migration flows, well, sorry, where the rate is constructed with migration flows. And in the third column, you see the estimate, the yearly estimate, when a rate is constructed by using stocks. And you always get to opposite conclusions. So the dependent variable is crucial. So I get to the conclusions. So in contrast to the previous literature, our empirical results point to a robust negative relationship between aggregate aid received and immigration rates. So this would give the impression that policymakers in rich countries are right to view the foreign aid sort of as an appropriate instrument to curb migration flows and so magically solve the so-called migration crisis. But of course, we are very careful to not oversell our results, because the aggregate results that are presented here can only provide a very rough guide for policymaking. And we have stated that by distinguishing between different types of foreign aid. And obviously, we are focusing on legal migration, which is not according to the politician's view in Europe. It's not like the main issue here. So ideally, this work should be replicated with irregular migration. But unfortunately, there are not reliable data sources available. So I think that's it.