Within the last decade, developed countries' immigration policies have become increasingly skewed in favour of skilled migrants(Beine, Docquier and Rapoport 2003; OECD 2003) who, while bringing economic benefits, are also seen to assimilate more easily into their host societies. This trend has raised considerable concern among policy makers in developing countries, who are wary of having to bear the costs of educating skilled workers, only to loose the most entrepreneurial and talented of these to more developed countries. As argued by Kapur and McHale (2005), since people endowed with a high level of human capital are essential to institution building and institutional reforms, the loss of these personnel (referred to also as the 'brain drain') could potentially trap developing countries in poverty. Yet, while economists have identified a number of factors that accentuate the harm associated with the phenomenon of brain drain, more recent research has raised some questions as to whether skilled migration is truly detrimental to development. Without denying the negative effects, this research points out that skilled migration can contribute to building capacity in sending countries. For example, the prospect of exit via emigration can increase the bargaining power of productive citizens in their countries of origin, forcing governments to give value creators better deals in the form of lower taxes, better conditions of work or even reducing levels of bribery and corruption, in effect inducing governments to act in their country's own long-term interest. Recent experiences have shown that members of the diaspora – especially returnees with a deep knowledge of successful institution building, can be important forces for institutional reforms.

 

In the context of economic globalisation, while ensuring the freedom of the individual, the international experience has been that it is difficult to prevent migration. Existing evidence suggests that migration of highly skilled workers can play a complex role in institutional development. In this context, the real challenge faced by policy makers in developing countries today is how to minimise the losses and maximise the benefits from

their talents living and working abroad.

 

One of the most striking recent examples of the emigration of highly skilled workers is Albania. Although partial and fragmented, the figures present clear evidence that brain drain is no small matter in Albania. Due to continued political instability, the slow pace of economic reform, cuts in funds and personnel in research institutes and, of course, the opening of its borders, skilled migration increased considerably after the democratic events in 1990. The phenomenon has been so massive that its effects are easily recognisable, especially on education and the research system (Tafaj 2001). Work by the Centre for Economic and Social Studies (CESS 2004) suggests that about 50 percent of all lecturers, research staff and intellectuals in the country, most of them young and trained in part in the West, have left Albania since 1990. In addition, nearly66 percent of Albanians known to have completed a doctoral degree in Western Europe or the US since 1990 have either emigrated from Albania or never returned after their graduation (UNDP 2006a)

.

While it is the right of these highly talented individuals to look for environments where they are more valued, it

may be argued that their absence has affected institutional development in Albania, meaning both the supply

of institution builders and the demand for better institutions2. Indeed, in the last few years, this issue has finally attracted the attention of both the Albanian government and the larger civil society (AIIS 2005). Consequently, a number of well-publicized civil society initiatives as well as a government strategy have been put in place to

deal with the phenomenon.

 

Despite all this recent attention on the emigration of the highly skilled, to the best of our knowledge, the migration of highly skilled workers from Albania has yet to be analysed in a systematic way. This is mainly due to a lack of reliable data documenting the brain drain in the country3. As a result, much of the discussion on brain drain from Albania has been of an anecdotal nature. There is an urgent need to have a more accurate picture of the size and intensity of this phenomenon.

 

By making use of qualitative and quantitative data collected in Albania in 2006 as well as quantitative data derived from a data bank established by CESS in collaboration with the Soros Foundation over 1998-1999 and 2003-2004, we hope to contribute towards filling the existing gap. This paper is organised as follows. Section 2 provides a summary of the existing debate on the economic literature concerning migration of highly skilled workers from developing countries. Section 3 first briefly reviews the pattern and chronology of Albanian emigration since 1990, before looking specifically at the emigration of the highly skilled. Section 4 presents the resu lts obtained from analysing the information collected by our team in 2006 as well as CESS’ data bank. This section is divided into two parts: the first explains the methodology employed for data collection; and the second presents the results. Section 5, based on the findings of the survey and examples of encouraging experiences from other countries, discusses a number of channels through which Albania can turn its brain drain into brain gain. The last section concludes and suggests some of the areas where research would involve a high payoff in terms of policy recommendations.