The Free Market: Our Future Friend at the Chilean Border

The discussion regarding the new Chilean immigration law has been accompanied by images of long lines outside consulates abroad, as well as long wait times for immigration services in Chile. These irksome troubles have been exacerbated by the startling discovery of immigrant trafficking networks, along with worrisome potential private pension (AFP) problems that will almost certainly be generated by the ingress of hundreds of thousands of people. Those workers—if for no other reason than their age or lack of steady employment at first—will have gaps in their AFP contributions as they find it necessary to undertake precarious or informal jobs.

Many of these failures could be remedied by privatizing border services.

Border services basically consist of (1) ensuring national and health security—for human beings, animals and crops, (2) helping to ensure a growing population currently threatened by a low birth rate—1.8 children per couple in Chile, (3) providing local labor markets with resources where shortages exists, and (4) managing the issuance of visas, passports and travel documents.

All these services could be provided by a well-designed system of concessions linked with economic incentives. The concessionaires would lose part of their annual income or bonuses for failing to fulfill their mandates and not taking care of their reputation. Through a competitive bidding process, each concessionaire could be assigned a certain number of kilometers of border or coastline, others would watch over airports and ports, and still others take charge of offices that issue passports, a much wider variety of visas, and travel documents.

The market-regulatory framework of private border services must comprise at least the following elements: (1) promotion of competition among concessionaires, (2) adequate power to catch, punish and expel those who fail to comply with Chilean immigration regulations, and (3) issuance and approval of visas and passports, encompassing all aspects of their duration, type, status, prices and discounts.

The lion's share of the price of visas and passports would form part of the concessionaire's income and, with competition, the prices would vary between different points of entry, issuing offices, and would depend on the required options and delivery times (speed) specified by a client. The other part of the concessionaire's income would come from the government, which pays each one a base plus bonus for good behavior and results.

There is no doubt that the current situation beleaguers both prospective immigrants—who wait hours or even days to obtain their visas—and Chileans who are exposed to state-driven, artificial Civil Registry strikes, high passport prices and, above all, the ineffectiveness state institutions that for years now have let in hundreds of thousands of illegal immigrants, often assisted by quasi-mafias that specialize in human trafficking.

By privatizing of border services Chile would once again take the lead as a world pioneer in market solutions to government failure, improving border services and better regulating immigration, improving the country's security, reducing its fiscal spending requirements, and generate better, greater and newer technologies and industrial capacity. If successful, other countries would do well to follow suit, just like they followed Chile in privatizing pension services.

Versión en español

John Cobin, Ph.D. (George Mason University) Twitter
Alejandro Rogers, MBA (MIT Sloan)
Co-Founders Independence Party (Chile)
www.libertarios.cl
Escape America Now

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