Remittances and Institutions: Are Remittances a Curse?
IMF Working Papers, February 1, 2008
Source details
- Canonical URL
- Remittances and Institutions: Are Remittances a Curse?
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Bibliographic details
- Authors: Jihad Dagher, Ralph Chami, Peter J Montiel, Yasser Abdih
- Published: February 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868913.001
Authors and publication
- By Jihad Dagher, Ralph Chami, Peter J Montiel, Yasser Abdih
- February 1, 2008
- Working Paper No. 2008/029
- Pages: 31
- Issue: 029
- Series: Working Paper No. 2008/029
- DOI: https://doi.org/10.5089/9781451868913.001
- ISBN: 9781451868913
- ISSN: 1018-5941
- Stock No: WPIEA2008029
Research question and approach
- Examines the relationship between the receipt of workers' remittances and institutional quality in recipient countries.
- Uses a simple theoretical model to show how an increase in remittance inflows can lead to deterioration of institutional quality by increasing the share of funds diverted by the government for its own purposes.
- Uses empirical analysis in a cross section of 111 countries to test the theoretical proposition, accounting for the likelihood of reverse causality.
Key empirical findings
- In a cross section of 111 countries, the ratio of remittance inflows to GDP has a documented negative impact on domestic institutional quality.
- A higher ratio of remittances to GDP is associated with lower indices of:
- control of corruption
- government effectiveness
- rule of law
- Empirical testing accounts for potential reverse causality.
Subject coverage and keywords
- Subject: Consumption, Corruption, Income, Public employment, Remittances
- Keywords: private income, WP
Notable metadata and presentation
- Format: IMF Working Papers web landing page summary
- The paper includes a model and cross-country empirical analysis; total length is 31 pages.
Source: IMF Working Paper "Remittances and Institutions: Are Remittances a Curse?" (2008/029), February 1, 2008.