The fiscal problem is often not movement itself, but who pays, who collects, and who adjusts
Imagine a city receiving a large number of new residents in a short period of time.
They need housing.
Children need schools.
People need transport, administration, and other public services.
Some begin working and paying taxes.
Others cannot work immediately.
The city bears many of the immediate costs.
But the city may not control the immigration rules.
It may not control the work-authorization system.
It may not receive enough additional revenue when the costs first appear.
Residents see crowded services and rising expenditure.
The easiest conclusion is:
migration is causing a fiscal crisis.
Sometimes movement really does create pressure.
But that is not yet a complete diagnosis.
The deeper question is:
Is the fiscal risk caused by movement itself, or by a mismatch between the institutions that make the rules, collect the revenue, and pay the costs?
What the National Numbers Can Hide
Public debate often asks a simple question:
Does migration cost taxpayers money?
OECD research shows why the answer is rarely simple.
In its International Migration Outlook 2021, the OECD examined the fiscal impact of immigration across 25 member countries over 2006–2018.
For most of them, immigrants’ total net fiscal contribution remained within a relatively narrow range—roughly minus one to plus one percent of GDP.
The result differed across countries.
Age mattered.
Employment mattered.
Taxes and social contributions mattered.
So did the way governments counted public expenditure.
This does not mean fiscal effects are unimportant.
It means national averages tell only part of the story.
A country can show a modest overall fiscal effect while a particular city faces intense pressure.
That is exactly what happened in New York.
New York City: When Local Costs Become Large
Beginning in 2022, large numbers of people seeking asylum arrived in New York City.
The city provided shelter and other services.
The costs were substantial.
According to the New York City Comptroller, actual asylum-seeker-related spending in fiscal years 2023 through 2025 totaled about $8.25 billion.
Of that amount, roughly $5.0 billion was funded by the city itself.
State government provided substantial support.
Federal support covered a much smaller share.
Those figures matter because the central legal rules governing asylum and employment authorization are federal, while much of the immediate shelter and service burden fell on the city.
This is not proof that asylum seekers caused a general fiscal crisis in New York.
Nor does it tell us what the long-term fiscal contribution of those residents will be.
It shows something more specific.
A mobility regime can be fiscally manageable in aggregate and still create severe pressure in one place.
Why?
Because authority, costs, revenue, and timing may be divided across different institutions.
The Competence-Resource Problem
The World Citizen Society calls this a competence-resource problem.
The principle is straightforward.
If an institution is responsible for providing a public function, it needs access to the resources required to perform it.
Otherwise responsibility and revenue drift apart.
A national government may control important migration rules.
A city may have to provide shelter, schools, transport, waste collection, housing-related infrastructure, and administrative services.
If the local government lacks adequate revenue or transfers, residents may experience a real deterioration in services.
That reaction should not automatically be dismissed as hostility to newcomers.
The fiscal imbalance may be genuine.
But if the problem is a mismatch between responsibility and resources, restricting movement is not the only possible response.
Revenue sharing may help.
Transfers may help.
Infrastructure investment may help.
The allocation of responsibilities may need to change.
The correct diagnosis changes the policy menu.
Costs Today, Work Months Later
New York also illustrates another kind of mismatch.
Under the ordinary U.S. rules for asylum applicants, a person generally must wait 150 days after filing an asylum application before applying for employment authorization.
Employment authorization cannot ordinarily be granted until the application has been pending for 180 days.
Applicant-caused delays can extend that timetable.
The fiscal timing is easy to see.
Local service costs can begin immediately.
Lawful employment under the ordinary asylum-based authorization route may begin months later.
This does not mean that the 150-day or 180-day rule caused New York City’s fiscal burden.
The causes were much broader.
But it illustrates an important institutional point:
a system can create immediate expenditure while delaying a newcomer’s ability to participate legally in the labor market.
That is one way institutions can manufacture avoidable fiscal strain.
The relevant question is not simply:
How much do newcomers cost?
It is also:
Are public institutions making it harder than necessary for newcomers to work, contribute, and establish ordinary life?
Mobility Adjustment Can Mean Moving Resources
Earlier in this series, I argued that large, rapid, or concentrated movements can create real adjustment pressures.
The response need not always be permanent exclusion.
Sometimes adjustment is fiscal.
A city receiving a large number of newcomers may need additional schools, housing infrastructure, administrative capacity, transport, language services, or temporary accommodation.
Those things require money.
Mobility Adjustment can therefore mean more than slowing, sequencing, or redirecting movement.
It can also mean moving resources toward the places that bear the adjustment costs.
This matters because national averages can conceal local pressure.
The relevant question is not merely whether the country can absorb movement.
It is whether the particular institutions that must respond have the capacity and resources to do so.
Redistribution Raises a Scale Question
A different fiscal problem appears when the people financing redistribution are more mobile than those who depend on it.
Suppose a small political community finances a generous social program from a narrow and highly mobile tax base.
If enough high-income residents leave, financing may become more difficult.
Does that prove redistribution is incompatible with Foot Democracy?
No.
It may mean that the scale of financing matters.
Some redistribution can remain local.
Other obligations may require wider pooling, equalization, shared funds, coordinated tax rules, or common minimum protections.
The question is:
At what level can a fiscal obligation be sustained without making political mobility either meaningless or destabilizing?
That is an institutional-design problem.
The previous article examined how highly mobile taxpayers can put pressure on governments. That pressure matters fiscally, but movement alone does not decide whether a tax policy is sustainable.
When Fiscal Costs Are Hidden or Exported
Fiscal comparison can also mislead.
A government may appear cheap because some costs are hidden.
Taxes can remain low while debt rises.
Pensions can be underfunded.
Infrastructure maintenance can be postponed.
Environmental costs can be left to future residents.
Or costs can be exported.
Residents may use infrastructure financed elsewhere.
Pollution may cross borders.
Tax rules may erode another community’s tax base.
A community can therefore look fiscally attractive because someone else is paying part of the bill.
This matters for Foot Democracy because mobility responds to visible signals.
If those signals are incomplete, people may compare jurisdictions using the wrong price.
Cheap government today can mean expensive government tomorrow—or expensive government somewhere else.
That is why fiscal transparency and rules for cross-community costs matter.
Equalization Can Help—and Create New Risks
Political communities do not begin from equal fiscal positions.
Some have large tax bases, valuable land, natural resources, established infrastructure, or high-income populations.
Others face weaker tax bases, remoteness, demographic decline, high service costs, or inherited liabilities.
If every community had to finance every basic guarantee entirely from its own resources, formal political equality could coexist with profound institutional inequality.
Some equalization may therefore be necessary.
But equalization creates another problem.
If a community can make expensive discretionary choices while assuming that a wider institution will always rescue it, fiscal responsibility weakens.
This is often described as a soft budget constraint.
The challenge is to preserve solidarity without erasing responsibility.
A wider system may need to compensate for structural disadvantage.
That is different from guaranteeing that every discretionary local choice will be financed by someone else.
There is no single formula for drawing that line.
A Better Fiscal Question
The OECD numbers and the New York experience point in the same direction.
The question “Does migration cost money?” is too broad.
A political community should instead ask:
Who receives the revenue?
Who bears the immediate service costs?
At what level of government?
When do those costs arise?
When do revenues arrive?
Can newcomers work and contribute?
Are responsibilities matched with resources?
Are costs being exported to another community?
Are liabilities being pushed onto future residents?
These questions do not eliminate fiscal conflict.
They locate it more precisely.
A badly designed fiscal system can make sustainable mobility look unsustainable.
It can also make unsustainable policy look temporarily cheap.
Mobility Is Not the Fiscal Constitution
Foot Democracy can create useful fiscal pressure.
It can sharpen comparison and expose capacity problems.
But it can also move tax bases, concentrate local costs, complicate redistribution, and reveal mismatches between authority and resources.
Institutions determine how those effects are handled.
A stable fiscal order needs transparent budgets and liabilities.
Responsibilities matched with resources.
Equalization where justified.
Shared minimum protections where necessary.
Rules for exported costs.
Attention to long-term obligations.
And institutions that make economic participation realistically possible after people move.
The central principle is:
Mobility is one element in the fiscal architecture. It is not the fiscal constitution.
Conclusion
Political mobility has fiscal consequences.
Those consequences are real.
But the New York case shows why their location and timing matter.
A national fiscal picture can look modest while one city bears billions of dollars in immediate costs.
A person may be legally admitted while institutional rules delay economic participation.
A community may appear cheap because someone else—or someone in the future—is paying part of the bill.
The task is therefore not to deny fiscal pressure.
It is to diagnose it correctly.
Foot Democracy should allow people greater freedom to change political communities.
The institutions around that freedom must still allocate revenue, costs, obligations, and responsibility in a sustainable way.
Every political order has fiscal costs.
The real question is whether those costs are visible, fairly assigned, and carried by institutions capable of managing them.
Mobility should change who may belong. It should not make fiscal responsibility disappear.
Notes
The OECD, International Migration Outlook 2021, examines fiscal outcomes in 25 OECD countries over 2006–2018. For most countries, immigrants’ total net fiscal contribution remained between approximately −1 percent and +1 percent of GDP. The OECD also emphasizes the importance of age, employment, taxes, social contributions, and the treatment of public expenditure in explaining cross-country differences.
The New York City Comptroller reports actual asylum-seeker-related expenditures of approximately $1.47 billion in FY2023, $3.75 billion in FY2024, and $3.02 billion in FY2025—about $8.25 billion in total. City funding accounted for roughly $5.0 billion of those three years’ actual expenditures, with the remainder primarily supported by New York State and, to a much smaller extent, the federal government.
Under the ordinary U.S. asylum employment-authorization rules, an applicant generally may file for employment authorization after the asylum application has been pending for 150 days and may become eligible to receive an Employment Authorization Document after 180 days. Applicant-caused delays can stop the relevant clock. The example is used here to illustrate a timing mismatch; it does not establish that this waiting period alone caused New York City’s fiscal costs.
Chapter 14 of The World Citizen Society, “Fiscal Discipline Without Fiscal Determinism,” identifies a competence-resource problem where institutions responsible for Entry-related services lack adequate revenue or transfers. It also argues that avoidable barriers to work, qualification recognition, language access, and regulated professions can manufacture fiscal strain.
The term soft budget constraint is associated with János Kornai’s work on socialist economies and was later applied more broadly, including to intergovernmental fiscal relations. Here it describes the danger that guaranteed rescue can weaken responsibility for discretionary fiscal choices.
The exact formulas for equalization, insolvency, bailout conditions, common funds, and the division between local and wider redistribution remain unresolved in The World Citizen Society. The theory deliberately leaves these as institutional-design questions rather than supplying false precision.
Further Reading
For adjustment when movement becomes large, rapid, or geographically concentrated, see “What If Too Many People Want to Move to the Same Place?”
For how unequal mobility can become unequal political influence, see “Can Foot Democracy Discipline Majority Democracy?”
For why rights and records need to survive movement, see “How Can Rights Survive Movement?”
For the broader limits of political-community choice, see “What Foot Democracy Can—and Cannot—Do.”
For the full institutional treatment, see Toshiyuki Nishimura, The World Citizen Society: Political Freedom, Democratic Choice, and the Institutions of a New Society, Chapter 14, “Fiscal Discipline Without Fiscal Determinism.”
