Branko Milanović: is citizenship just a form of rent?
In a globalised world, composed of countries with vastly unequal mean incomes, citizenship has acquired an enormous economic value, argues economist and former GDI guest speaker Branko Milanović in a blogpost.
The growth of the welfare state in the second half of the 20th century, in the West and in the communist countries of Eastern Europe, has added a facet to citizenship: the right to a number of benefits, from pensions to unemployment benefits that are available only to contributors (i.e. citizens who work in their countries) or to citizens as such without any contributory quid pro quo (as, for example, family allowances or social assistance).
The existence of the welfare state in a world of enormous income differences between the countries has drawn a wedge between citizens of rich countries that enjoy these benefits and citizens of poor countries that do not, writes Branko Milanović. It has created a “citizenship rent” for those who are lucky to be citizens of the rich countries; and “citizenship penalty” for others.