Brain Drain as Brain Gain in Southeast Europe: Challenges Ahead
Mirjana Stankovic1, Biljana Angelova2, Verica Janeska3, Bratislav Stankovic4
Ministry of Education and Science, Skopje Republic of Macedonia
Institute of Economics, Skopje, Republic of Macedonia
3 Institute of Economics, Skopje, Republic of Macedonia
4 University St. Paul the Apostle, Ohrid, Republic of Macedonia
mirjana.stankovic@fulbrightmail.org
angelova@ek-inst.ukim.edu.mk
verica@ek-inst.ukim.edu.mk
bratislav.stankovic@fulbrightmail.org
2
Abstract
The majority of highly educated Southeast Europeans leave their countries in search of a better life.
Scientists, researchers and senior managers are attracted by career opportunities, salaries and better
overall conditions abroad. Over the past decade, the number of researchers has seriously declined. Many
Southeast European (SEE) countries experience high emigration rates of their skilled professionals. What
is typical of brain drain emigrants from SEE is that they usually sever their ties with their country of origin
and generally do not send any remittances or interact in substantial ways with the home country.
The main goal of this paper is to propose a model for intellectual mobilization of the SEE highly skilled
Diaspora by envisioning the creation of a brain circulation Diaspora network that will foster a regular set of
interactions, collaborations, joint grant proposals, joint research projects, co-authorships, visitor
exchange, joint ventures and alike, between the highly educated Diaspora and their counterparts in the
countries of origin. This will provide expatriates with the opportunity to transfer their expertise and skills to
the country of origin, without necessarily returning home permanently. In this way, the countries of origin,
i.e. SEE countries, will have access to the knowledge and expertise of the expatriates, but also to the
knowledge networks that they form in the host countries.
Keywords: human capital, brain drain, technology transfer, innovation, economic growth
1. Theories of Brain Drain in the Context of Small Developing countries: An Overview
The term “brain drain” refers to the international transfer of resources in the form of human capital. This
term usually entails the migration of highly educated labor force from developing countries to developed
countries. For example, until 2000, 20 million highly educated immigrants lived within the OECD, which is
an increase by 70% within ten years, compared to only 30% increase for unskilled immigrants in the
same period. The reasons for brain drain are twofold: the globalization poses a trend of agglomeration of
human capital in places where it already is in abundance; in addition, host countries gradually impose
conditions to filter immigrants through selection policies for quality workforce (World Bank, 2008).
Two concepts prevail in the discussion on the impact of highly skilled migration on economic
development. The first refers to the notion of brain drain as a phenomenon having negative impact on the
human capital accumulation and on the fiscal revenue of the sending country (Bhagwati & Hamada,
1974). Adherents of this view emphasize the need for implementation of restrictive public policies for
highly skilled labor mobility. The second concept focuses on the existence of a highly skilled Diaspora
acting as a powerful force in promoting economic development through a variety of instruments, such as
remittances, trade, FDI and knowledge transfer. An example in this regard would be the rapid
development of high-tech companies in India and China as a result of the Silicon Valley Diaspora
(Saxenian, 2002). Migration can lead to human capital accumulation and thus potentially lead to a net
increase in the level of education among the people of the home economy (Beine et al., 2001, 2008).
These studies do not engage in collecting or studying empirical data on the experience of small
developing countries, such as Macedonia, that face a high rate of human capital emigration. A handful of
research studies have analyzed this issue (Docquier & Marfouk, 2004; Beine et al., 2001, 2008; Gibson &
McKenzie, 2010). Previous research does not clarify whether it is common for highly skilled immigrants,
who come from countries having high brain drain rate, to engage in knowledge transfer, trade and FDI, or
the experience of the Chinese and Indian ICT1 companies is an exception to the rule. These studies
provide no empirical data about the brain drain effect on the fiscal system, nor do they measure the size
of the benefits for the migrants themselves in the process of emigration (Gibson & McKenzie, 2010).
Docquier and Marfouk (2004) try to create coherent statistical analysis in this regard by assessing the
rates of emigration by level of education (primary, secondary and tertiary) for all countries in the world.
Their estimates on emigration of the population with tertiary level of education can serve as a measure for
brain drain. On one hand, this measure can be too wide for developed countries where highly educated
account for one third of the total working population. On the other hand, it may be appropriate for
developing countries where the share of highly educated population accounts for only about 5% of the
total labor force. Due to the impossibility for adequate data collection, the South-South migration is not
taken into account. This could lead to underestimation of the migration rates in some developing
countries which are an important migration destination for other developing countries. Also, the definition
of Docquier and Marfouk (2006) for immigrants as foreign-born workers does not consider the fact if
education was gained in the home or in the host country. This can lead to overestimation of brain drain
and create a false picture of the variations of this phenomenon across the analyzed countries
(Rosenzweig, 2005). In order to overcome this issue, Beine et al. (2006) use the age at which immigrants
enter the host country as an indicator of where the education was acquired. Their results lead to small
corrections in the ranking of countries according to the degree of brain drain intensity, and indicate a
strong correlation between corrected and uncorrected results. The research of Docquier and Marfouk
(2006) indicates that the size of the country and the emigration rate are inversely correlated, i.e. the
average highly skilled emigration rates are seven times higher in small countries than in large countries.
The highest emigration rates have been observed in middle-income countries, where people have both
the incentive and the financial means to emigrate.
Studies which show that knowledge is unevenly distributed in the form of clusters also emphasize that
this leads to a stratification and differentiation of a center and a periphery, where underdeveloped
peripheral countries (i.e., SEE countries) and regions are losing highly skilled human capital, and
consequently the possibility of achieving high incomes at the expense of developed central regions that
benefit from disproportionately increased revenues. Thus, the North-South development gap continuously
increases. Less developed regions have a shortage of highly skilled staff that would enable higher
profitability of capital. Capital circumvents these regions, and thus the average productivity remains low.
This in turn encourages more talented people to leave, thus emphasizing the brain drain phenomenon,
and creating a vicious circle. This phenomenon is called the “Mezzogiorno effect”, named by the region of
Southern Italy where it is ubiquitous. In the context of SEE countries’ high rates of highly skilled
emigration and in the context of formulating sound public policies in the area of brain circulation, several
questions resonate: What is the starting point of the vicious circle of the “Mezzogiorno effect”, and
whether SEE countries, through implementation of targeted public policies, can affect their qualification as
a periphery or center? Whether SEE countries should undertake public policies aimed at generating
indigenous human capital, by subsidizing education and scientific research? Or should they undertake
public policies aimed at attracting and importing of human capital that has already been created abroad,
and funded by another country (Lucas, 1990).
Brain drain for one country equals brain gain for another. The brain drain has several negative
implications for the sending country. On one hand, brain drain leads to an increase in inequality on global
level (Bhagwati & Hamada, 1974), creating substantial losses in the economy of the home country. On
the other hand, brain drain might lead to deficit in certain professions, i.e., when members of a certain
profession emigrate in disproportionately large numbers. This situation might be worsened when
implementing public policy measures aimed at encouraging public education that will not offer
professional programs for acquisition of easily mobile skills, e.g. nurses (Poutvaara, 2004). This type of
public policy is presumably focused on creating staff who will be unable to leave the country easily (e.g.
lawyers), but in the long run this would lead to hyperinflation of lawyers. On the other hand, the issue with
the deficit professions could still remain.
The degree of possibility to emigrate affects the decision as to whether people will invest in higher
education. If a certain type of education is an immigration card, this will act as an additional stimulus for
investing in human capital. On the other hand, if people are uncertain about emigration possibilities at the
time when deciding about their education, then, under certain circumstances, this situation can be used
1
Information and communication technologies.
for the benefit of the sending country (Mountford, 1997; Beine et al., 2001). Countries combining relatively
low levels of human capital and low rates of highly skilled emigration record net profit. However, most
developing countries record huge losses in human capital in the form of brain drain. Only a few large
developing countries showed insignificant benefits in terms of balancing the low level of human capital
and the low rate of highly skilled emigration (Beine et al., 2008).
There are two motives for remittances: altruism and exchange (Rapoport & Docquier, 2006). Altruism is
usually directed at members of the immediate family, while remittances motivated by exchange are
usually compensation for services done on behalf of immigrants by someone in their native country. Such
transfers are intrinsic for temporary migration and they signal the willingness of immigrants to return
home. It is unclear whether highly skilled migrants transfer more funds than uneducated immigrants,
because the former can transfer larger amounts in order to repay for funds invested in their education. On
the other hand, they often emigrate with their family on a constant basis. Thus, Faini (2006) found that at
aggregate level brain drain migration generates less income from remittances.
Return migration (brain circulation) is rare among highly educated individuals who have left their country,
unless the return is not preceded by a considerable growth of the national economy. For instance, less
than one-fifth of Taiwanese and South Korean individuals with doctorate in engineering who completed
their studies at US universities in the 70s have returned to their home countries. After two decades of
rapid growth of Taiwan and South Korea, the share of students who return upon graduation increased to
two-thirds. The same trend is observed with Chinese and Indian students who graduate in the U.S.A. and
return home (OECD, 2002), suggesting that the return of highly qualified people is a consequence rather
than the cause of economic growth (Commander et al., 2004).
There is a significant number of social studies highlighting the potential of the Diaspora externalities, i.e.
highly qualified migrants reducing transaction and other types of information costs, and thus to facilitate
the processes of trade, FDI and technology transfer between the host country and country of origin
(Rauch & Casella, 2003; Kugler & Rapoport, 2006; Arora & Gambardella, 2005).
Human capital formation and generation has been a challenge to most of the developing countries in
terms of achieving economic and social growth. Human capital is inevitably linked to issues of innovation,
successful technology transfer and economic growth. The most persistent challenge in this respect has
been the phenomenon of high rates of brain drain, i.e. scientists leaving their native countries in search
for better life. In SEE countries this problem has been pervasive and ubiquitous for years. This paper tries
to build on the existing human capital and innovation literature and to come up with creative solution to
the problem by proposing a brain circulation model.
2. Brain drain trends in the SEE countries
The dissolution of the former communist regimes, weak economic structure, low level of production, low
performance of the educational system, high level of debts, high level of unemployment, low recognition
of the private sector and SMEs’ contribution to innovation and lack of motivation, commitment and trust
have had enormous impact on the human capital in the SEE countries.2 Two concurrent processes have
been taking place, one associated with “external” brain drain, in the form of experts leaving the country for
better professional fulfillment abroad, and the other associated with “internal” brain drain, in the form of
specialists leaving their professions for better paid jobs in the private and/or informal sector of the
economy (UNESCO, 2005).
Common denominator of the educational and scientific systems of all the SEE countries is the low level of
investment in research and development (R&D) carried out by the private sector, the academia and the
public authorities (Figures 1 – 4). This comes as a result of several intertwining structural problems faced
by these countries: budgetary constrains posed by restrictive monetary and fiscal policies, low level of
development, process of de-industrialization, high costs of societal transition, imbalances on the external
accounts, low national investment and savings rates, and limited FDI inflows (UNESCO, 2005). In
contrast, developed countries such as South Korea and Germany, invest more in R&D (2–2.5 % of GDP,
Figure 1). Moreover, the academia and the public authorities in developed countries have substantially
lower participation in comparison to their counterparts in the SEE countries (Figures 2 and 3). The private
sector in developed countries is the main catalyst of the innovative processes, and has the highest
OECD, “Science, Technology and Innovation Indicators in a Changing World: Responding to Policy Needs”, (2007). See also
OECD, “Science, Technology and Industry Scoreboard” (2009).
2
percentage of the total GERD (Figure 4). Even though most of the SEE countries have undertaken
strategies and action plans geared towards higher tertiary enrolment rate, this policy has not resulted in
substantial decrease of the brain drain rate. On the contrary, the brain drain rate is on a constant
increase, Macedonia being the leader in the SEE region with respect to this (Figures 5 and 6, Table 1).
Croatia and Bosnia and Herzegovina follow suit. Interestingly, Albania and Serbia have much lower rates
of brain drain that stay relatively stable over time and fluctuate around the world average. Bulgaria and
Romania, as European Union countries, also experience relatively low rates of brain drain, in comparison
to the “brain drain leader” in the region, i.e. Macedonia.
Figure 1. Gross expenditure on R&D (GERD), % of GDP. UNESCOstat 2011
Figure 2. GERD performed by the academia, percentage. UNESCOstat 2011
Figure 3. GERD performed by public authorities, percentage. UNESCOstat 2011
Figure 4. GERD performed by the private sector, percentage. UNESCOstat 2011.
Figure 5. Emigration rate by education level, SEE countries. World Bank 2011.
Figure 6.Emigration rate by educational level 1995–2005, selected SEE countries. OECD,Docquier, 2011
Brain drain 0+
Brain drain 12+
Brain drain 18+
Brain drain 22+
Country
1990
2000
1990
2000
1990
2000
1990
2000
Albania
17,4% 14,3%
17,3%
14,1%
17,1%
13,9%
16,1%
13,2%
Bosnia & Herzegovina
23,9%
23,2%
22,9%
21,9%
Macedonia
29,1%
26,9%
25,9%
24,1%
Croatia
24,1%
22,1%
20,7%
18,9%
Bulgaria
4,0%
6,8%
3,9%
6,6%
3,8%
6,5%
3,7%
6,2%
Turkey
8,3%
5,8%
7,7%
5,4%
7,4%
5,2%
6,9%
4,9%
Serbia and Montenegro
13,7%
13,3%
12,9%
12,3%
Romania
9,1%
11,9%
8,7%
11,4%
8,2%
10,8%
7,7%
10,2%
Table 1.Measuring international skilled migration, estimates controlling for age of entry,Beine et al., 20063
Macedonia is a typical example of a small, landlocked developing country suffering from high rates of
brain drain. Remittances experience constant growth (e.g., in 2003 they amounted to only $US 174
million, while in 2010 they amounted to $US 414 million). However, if other categories of inflows are taken
into account it becomes clear that remittances do not play a major role in the total inflows in the
Macedonian economy, i.e. their share is only 5% compared to the exports’ share of 62%4. Nonetheless,
the analyzed data pertaining to remittances does not show the structure of the senders of remittances, i.e.
their education level. Taking into account the fact that Macedonia is a multiethnic society, as well as the
long and intense immigration tradition of Macedonian Albanians, it would be interesting if one performs
the brain drain analysis on such a micro level, in order to determine which part of Macedonian
immigration population constitutes the Macedonian brain drain, and whether and to what extent the highly
educated Diaspora invests back in the home country. Partial data on the extent of brain drain in
Macedonia can be obtained from the World Bank KAM database 5. In this respect, Macedonia is ranked
on the bottom of the list, being a country with one of the biggest brain drain rates. The Table 3 data gives
a partial overview of the scope and structure of the brain drain in Macedonia. In 2000 the emigration rate
of tertiary educated labor force reached 29.1%. Even more interesting is the analysis, conducted by Schiff
and Sjoblom, which makes an assessment of the international highly educated immigration from 1975 to
2000, based on the research of Docquier and Marfouk (2004) 6. The highest percentage of the
Macedonian emigration accounts for highly educated immigrants, i.e., brain drain. If this is analyzed
together with the statistics which suggests that remittances have a very small share of total inflows in the
Macedonian GDP, it becomes evident that from 1995 onwards highly educated individuals leave the
country with their families, while severing their ties with their home country and not investing back at all.
Sadly, from 1995 to 2000 the emigration rate for the category of higher education has nearly doubled
from 14.3% to 27.3% (Figure 5)7. Unfortunately, reliable empirical evidence and statistical figures about
the extent, chronology and intensity of the brain drain in Macedonia do not exist. One can only arrive to
certain assumptions, but not to scientifically valid conclusions.
US$ in millions
Inward remittance flows8
Worker’s remittances
Employees’ compensation
Migrants’ transfers
Outward remittance flows
Workers’ remittances
3
2003
174
146
28
/
16
15
2004
213
161
52
/
16
15
2005
227
169
57
/
16
14
2006
267
198
69
/
18
16
2007
345
239
106
/
25
22
2008
407
266
140
/
33
28
2009
401
260
121
/
26
22
2010
414
/
/
/
/
/
Beine, Michel, Frédéric Docquier and Hillel Rapoport (2006), Measuring international skilled migration: new estimates controlling
for age of entry, Policy Research Discussion Paper, World Bank.
4
Data obtained from the World Bank database.
5
The data has been obtained through a survey which measures the perception of the respondents about the extent of the brain
drain in the country.
6
This database contains data on the structure of the Macedonian emigration classified by education level, in 1995 and 2000.
7
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:21866422~pagePK:64214825~piPK:642
14943~theSitePK:469382,00.html
8
For comparison: net FDI inflow $ 0.6 billion, net ODA - official development assistance 0.2 billion, total international reserves U.S.
$ 2.1 billion, exports of goods and services $ 5 billion in 2008.
Employees’ compensation
1
1
2
2
3
5
Migrants’ transfers
/
/
/
/
/
/
Table 2. Inward and outward remittance flows, Macedonia. World Bank, 2011.9
4
/
/
/
The data in Table 2 contains analytical limitation due to the fact that it is the difficult to measure the exact
amount of inward remittance flows as a result of the existence of informal channels of sending money.
Moreover, the analysis of the data does not provide information on the impact (positive as a brain
gain/negative as a brain drain) of temporary or permanent migration of human capital.
Figure 7. Migrant remittance inflows10 (US$ million), 1996 - 2011, Macedonia. World Bank, 201111.
Emigration, 2010
■ Stock of emigrants: 447.1 thousands
■ Stock of emigrants as a percentage of total population: 21.9%
Skilled emigration, 2000
■ Rate of emigration of tertiary educated population: 29.1%
■ Emigration of doctors: 91 or 2.0% of doctors educated in the country
Immigration, 2010
■ Stock of immigrants: 129.7 thousands
■ Stock of immigrants as a percentage of total population: 6.3%
■ Females as percentage of immigrants: 58.3%
■ Refugees as percentage of immigrants: 1.0%
Table 3. Migration flows 2010, Macedonia. World Bank, 2011.
3. Intellectual Mobilization of the SEE Highly Skilled Diaspora: A Model
According to the OECD Investment Reform Index 2010 (OECD, 2010), the SEE countries in the period
from 2006 to 2010 achieved certain level of progress in the human capital development by enacting and
implementing national strategies and actions plans in the area of Vocational Education and Training,
Adult Education and Lifelong Learning. Although formal mechanisms for stakeholder consultations in
these areas exist, in reality communication among government departments and among government
institutions, universities and the private sector is fragmented and ad hoc.
9
Remittances are defined in the Balance of Payments Manual, 5 edition of the World Bank. For more details, see:
http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1199807908806/MacedoniaFYR.pdf;
http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1181678518183/metasheet.pdf.
10
Workers’ remittances, compensation of employees, migrant transfers, credit (US$ million)
11
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~pi
PK:64165026~theSitePK:476883,00.html#Remittances.
Thus, despite the positive reforms in the field of education and vocational training, the SEE countries’
governments face number of challenges, due to a deficit in certain types of occupations. This in turn
generates a gap between supply and demand of certain skills. The loss of certain types of occupations,
and having no coherent, holistic and strategic public policy approach generates and sustains the vicious
cycle of brain drain. High rates of brain drain create distortions in the highly skilled population labor
market. The private sector often emphasizes the need for a workforce that will have practical and
technical skills. For instance, the National Program for the Development of Education in the Republic of
Macedonia 2005 - 2015 is not aligned with other national strategies, such as the ones for investment and
for innovation. This situation is a result of fragmented cooperation between government institutions
responsible for creation of public policies in the field of human capital development. One possible public
policy instrument in this regard would be implementation of a holistic, inclusive approach to education,
science, technological development and innovation. Creating and sustaining substantial, and not only
formalistic, institutional ties is essential in this regard.
Highly educated and skillful workforce contributes to the development of innovative capacities of the firms
and of the society as a whole. For instance, the number of students in tertiary education in Macedonia in
a period of 3 years (2006 – 2009) recorded an increase of 35% (UNESCO, 2011). The increase in the
number of students, as an indicator, represents the input in the educational system. The number of
graduates is a measure of the output of the educational system, which may indirectly indicate the
efficiency of the educational system in generating human capital. If once more, the example of Macedonia
is taken, the statistics pertaining to the output of the educational system is quite different from the one
that displays the input. The former is certainly more relevant than the latter for analysis of the relationship
between the educational system and the human capital generation. Figure 9 shows that the number of
graduates is low or decreases in all sectors, except in the social sciences, where it records rapid growth.
These data should be analyzed simultaneously with the data on brain drain in Macedonia. The increased
number of graduates in the social sciences, the increased volume of brain drain, as well as the lack of
technical and professional occupations point out directly to the conclusion that a large number of
graduates in the area of technical studies and other professional occupations leave the country whenever
they have an opportunity to do so.
Figure 9.Tertiary graduates in different sectors, percentage, Macedonia. UNESCOstat, 2011.
High rates of highly skilled emigration present the net transfer of human capital and resources, in the form
of costs for educating workers, from low-income to high-income countries (UNCTAD, 2007; World Bank,
2006a). Brain drain rates of some small developing countries amounted to over 60% (World Bank, 2008).
Emigration of the highly educated workforce stratum which directly contributes to production, e.g.
engineers, can result in reduced innovation and technology transfer rates in the domestic economy
(Kapur & McHale, 2005). The emigration rates of scientists, engineers and doctors are, as a rule, higher
than the emigration rates of the labor force that has general university education (e.g., lawyers). For
example, the emigration rate of individuals with tertiary education in India is 4%, but the emigration rate
of individuals who graduated from the prestigious Indian Institutes of Technology is in the range of 20 to
30% in the 80s and 90s (Docquier & Marfouk, 2004).
Certain level of emigration rate can be positive for the sending country, when local conditions and
opportunities are limited, due to the possible positive effect of technology transfer from the Diaspora.
However, certain preconditions need to be fulfilled in order for positive externalities of brain drain to occur.
If the sending country represents relatively small economic market, and such is the case of all the SEE
countries, it is very likely that the brain drain will cause significantly adverse labor market changes that will
affect all sectors of the local economy. The likelihood that a young man who earned his doctorate in the
U.S.A. will remain there after completing doctoral studies decreases with the increase in the average per
capita income in the home country. The income level of the home country is not the sole factor affecting
the decision to return. This decision is influenced by other factors such as quality of living conditions,
density of research networks and size of the host country Diaspora. Factors that could positively affect
the decision to return to the home country are family proximity, cultural familiarity and the desire to
participate in the technological progress of the home country.
Due to the high brain drain rates, the governments of the SEE countries should formulate public policies
aimed towards encouraging the so-called brain circulation. The brain drain is a complex issue that occurs
as a result of a variety of mutually overlapping factors, out of which the most important is the level of
economic development of the home country. For instance, the economic development is the main reason
for the return of South Korean highly educated immigrants to their home country. However, the lack of
opportunities for economic development is not the only obstacle to the return migration. An example in
this regard is the 2005 study of the Albanian Institute for International Studies, Tirana, which indicates
that the young educated Albanians do not return to their home country; the main reasons were the
inappropriate business practices of employers in terms of recruitment and selection, nepotism and lack of
transparency in universities and public administration (OECD, 2010). One of the most successful projects
in the area of brain circulation which ought to be reestablished has been “Piloting Solutions for Alleviating
Brain Drain in South East Europe” financed by UNESCO and Hewlett-Packard. This project was designed
to support research and reduce brain drain by creating opportunities for advancement of young
Southeastern scientists in their home countries. Within this project, universities from the countries of
Southeast Europe have received assistance in the form of grid technologies and start-up capital for
financing scientific cooperation and exchange with their counterparts in the Diaspora. Since all SEE
countries share similar socio – economic conditions, the regional approach to brain circulation will be an
effective public policy instrument. Another effective public policy would be the creation of knowledge
networks in the Diaspora (e.g., Colombian Red Caldas).
We see the highly skilled Diaspora as an opportunity which takes a different approach to the brain drain
because it perceives the brain drain not as a loss, but a potential gain to the home country. We see the
highly skilled SEE expatriates as a pool of potentially useful human capital for the countries of origin. The
challenge lies in mobilizing these brains in order to involve them in promoting the economic growth of the
region, i.e., in building a sustainable brain circulation network. SEE countries can benefit from other
countries’ successful experiences, e.g. India, where the partnerships between the private sector and the
academia, twinning project with technology institutes from the USA and the technology transfer led by the
Silicon Valley Diaspora have greatly influenced the rise of Bangalore as one of the world’s IT centers.
Universities, together with the public authorities should motivate the talented lecturers and students to
spend short periods of research and study abroad. Also, the institution of exchange programs is an
excellent means of encouragement of highly skilled Diaspora scientists to come back in their home
country and give lecture series or engage in collaborative projects with their counterparts. The SEE
countries’ governments should play a key role in the process of brain circulation by adopting a regional
approach to this issue. This is even more important in the light of the new R&D program of the European
Union, Horizon 2020, which advocates scientific collaboration and formation of research and development
consortia, not only between the academic institutions, but also between the academia and the private
sector. All of these endeavors need to rely on long term strategies to promote economic growth and
democracy in all of the SEE countries, thus leaving no way to nepotism and corruption, two of the main
culprits for the long socio-economic status quo of the SEE countries (Quaked, 2002). Horvat (2004)
rightly points out that the main preconditions for brain circulation to occur are the “well developed
scientific infrastructure, higher investments in the science sector, and the stability of a consolidated
democratic government that assures human rights and academic freedoms”.
References
Arora, A., Gambardella, A., (2005) The Globalization of the Software Industry: Perspectives and
Opportunities for Developed and Developing Countries. NBER Chapters, Innovation Policy and the
Economy, Vol. 5: 1-32
Beine, M., Docquier, F. Rapoport, H. (2001) Brain drain and economic growth: theory and evidence,
Journal of Development Economics 64: 275–289.
Beine, M., Docquier, F. Rapoport, H. (2006): Measuring the international skilled migration: new estimates
controlling for age of entry, World Bank Research Report.
Beine M., Docquier, F., Rapoport, H. (2008) Brain drain and human capital formation in developing
countries: winners and losers, The Economic Journal 118: 631-652.
Benhabib, J., Spiegel, M. (1994) The role of human capital in economic development: evidence from
aggregate cross-country data. Journal of Monetary Economics 34: 143-173.
Berry, R.A, Soligo, R. (1969) Some welfare aspects of international migration, The Journal of Political
Economy 77: 778-794.
Bhagwati, J.N. (ed.) (1976a) Taxing the Brain Drain, Vol. 1: A Proposal, Amersterdam: North-Holland.
Bhagwati, J.N. (ed.) (1976b) The Brain Drain and Taxation, Vol. 2: Theory and Empirical Analysis,
Amersterdam: North-Holland.
Bhagwati, J.N. (1979) International migration of the highly skilled: economics, ethics and taxes, Third
World Quarterly 1: 17-30.
Bhagwati, J.N., Dellafar, W. (1973) The brain drain and income taxation, World Development 1: 94-100.
Bhagwati, J.N. Hamada, K. (1974) The brain drain, international integration of markets for professionals
and unemployment, Journal of Development Economics 1: 19-42.
Docquier, F., Marfouk, A. (2004) Measuring the International Mobility of Skilled Workers (1990–2000).
Policy Research Working Paper Series 3381. World Bank, Washington, DC.
Gibson, J., McKenzie, D, (2010) The economic consequences of "brain drain" of the best and brightest:
microeconomic evidence from five countries. Policy Research Working Paper Series 5394. World Bank.
Grubel, H.G., Scott, A. (1966) The international flow of human capital, American Economic Review 56:
268-74.
Hall, R.E., Jones, C.I. (1999) Why Do Some Countries Produce So Much More Output Per Worker Than
Others? The Quarterly Journal of Economics 114: 83-116.
Horvat, V. (2004) Brain Drain. Threat to successful transition in South East Europe? Southeast European
Politics, Vol. V, 1.
Jaffe, A. B., Trajtenberg, M., Henderson, R. (1993) Geographic localization of knowledge spillovers as
evidenced by patent citations. Quarterly Journal of Economics, August 1993: 577-598.
Janeska, V., (2003) Migration of Highly Educated and Skilled Persons from the Republic of Macedonia,
Economic Development, Institute of Economics, Skopje.
Kapur, D., McHale, J. (2005) Give Us Your Best and Brightest: The Global Hunt for Talent and Its Impact
on the Developing World. Brookings Institution Press.
Keeley, B. (2007) Human Capital: How what you know shapes your life. OECD, Paris.
Mayer, J. (2000) Globalization, technology transfer, and skill accumulation in low-income countries.
Discussion Paper, no. 150. Geneva, UNCTAD.
Mountford, A., (1997) Can a brain drain be good for growth in the source economy? Journal of
Development Economics 53: 287-303.
OECD (2010) Country statistical profiles - 2010 edition. OECD, Paris.
OECD (2011a). National Accounts of OECD Countries, Volume 2011. OECD, Paris.
OECD (2011b) The Former Yugoslav Republic of Macedonia: Review of the National Innovation System.
OECD, Paris.
Quaked, S., (2002) Transatlantic Roundtable on High-Skilled Migration and Sending Countries Issues.
International Migration, Vol. 40, No. 4.
Saxenian, A. (1994) Regional advantage: Culture and competition in Silicon Valley and Route 128.
Cambridge, MA: Harvard University Press.
Saxenian, A. (2002) Local and Global Networks of Immigrant Professionals in Silicon Valley, Public Policy
Institute of California, San Francisco, CA.
UNESCO (2011) UNESCO Institute for Statistics, at http://stats.uis.unesco.org/unesco.
World Bank (2008) Global Economic Prospects: Technology Diffusion in the Developing World.
World Bank (2011) World Development Indicators.