1 The Internal Brain Drain: Foreign Aid, Hiring Practices, and International Migration Nicolas Lemay-Hébert Senior Lecturer in the Department of International Relations, Coral Bell School of Asia Pacific Affairs, Louis Herns Marcelin Professor of Social Sciences at the University of Miami and Chancellor of the Interuniversity Institute for Research and Development, Stéphane Pallage Rector of the University of Luxembourg, and Toni Cela Country Coordinator of the Interuniversity Institute for Research and Development Abstract Building on empirical material gathered in Haiti, this article advances a new and innovative understanding of the internal brain drain phenomenon―the poaching of local skilled workers by international non-governmental organisations (INGOs) or international organisations (IOs)―by conceptualising it as an equilibrium. This equilibrium is composed of two sets of tensions: (1) the tensions between the salary conditions in the public sector and the salary conditions offered to local staff working for IOs and INGOs; and (2) the tensions inherent in the dual salary scale used by IOs and INGOs for local and international staff. The two sets of tensions contribute in their specific ways to international migration―as such the internal brain drain contributes to external brain drain dynamics. Finally, the article addresses the difficult policy choices facing development and humanitarian organisations, as every set of policies impacting one side of the equilibrium is bound to impact the other side of equilibrium. Keywords aid economy, humanitarian aid, political economy of interventions Introduction There is ample―even if most of the time anecdotal―evidence that international non- governmental organisations’ (INGOs) or international organisations’ (IOs) hiring of local staff practices can create tensions with the public sector. Unlike the external brain drain, which is usually driven by overseas demand for skilled labour, the internal brain drain is fuelled by the hiring practices of INGOs or IOs, which in many senses act like an artificial market, crowding out human capital. For the United States Agency for International Development (USAID)’s Kent Hill, the impact of wage inflation is ‘a horrendous dilemma’ that causes ‘immense pain’, while the International Monetary Fund (IMF)’s Arvind Subramanian decries the fact that the best talent is tied up in the ‘aid industry’ in Africa (Garrett, 2007, p. 15). The United Nations (UN) This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the Version of Record. Please cite this article as doi: 10.1111/disa.12382. This article is protected by copyright. All rights reserved.