The Tensions of Trade: Sending States, Brokers, and the Market in Labour Migration

This paper explores the complex relationship between sending states and the market in the context of labor migration. Specifically, it examines how labor-exporting states navigate the dilemma of commercialization and de-commercialization of migrant labor through interactions with market actors such as commercial brokers or intermediaries. The paper uses data from qualitative research conducted in one of the most significant labor-exporting countries in South Asia—Nepal. While sending states depend on these actors to maximize remittance flows and manage unemployment, they also seek to distance themselves from the market as moral hazards emerge from their involvement. Over the decades, state-market relations have evolved to reflect the perpetual dilemma faced by the state in commercializing migrant workers and the potential risk to migrant welfare in the involvement of market actors. Using process tracing, this paper examines one specific policy change in the Nepal-Japan migration corridor that best captures such a dilemma. It explores how a G2G (government-to-government) agreement signed between the countries to facilitate the migration of SSW (Specified Skilled Workers), originally designed to exclude "morally corrupt" market actors, transformed into a B2B (business-to-business) model. Oscillating between delegation of migration management to the market and exclusion of the market from the facilitation and governance of migration, a longitudinal perspective that this paper adopts helps explain the constant tension between commercialization and de-commercialization experienced by sending states. The paper also assesses the role of the market in influencing state policy and demonstrates the power of market actors in creating, channelling, and maintaining migration corridors. This study sheds light on the moral and political challenges faced by labor-exporting states in their reliance on, and regulation of, commercial brokers and contributes to our understanding of sending state regimes.