The Leading eBooks Store Online 4,353,660 members ⚫ 1,442,818 ebooks

New to

Learn more

Remittances and Institutions: Are Remittances a Curse?

Remittances and Institutions: Are Remittances a Curse? by Jihad Dagher
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
This paper addresses the complex and overlooked relationship between the receipt of workers' remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality - specifically, to an increase in the share of funds diverted by the government for its own purposes. Empirical testing of this proposition is complicated by the likelihood of reverse causality. In a cross section of 111 countries we document a negative impact of the ratio of remittance inflows to GDP on domestic institutional quality, even after controlling for potential reverse causality. We find that a higher ratio of remittances to GDP is associated with lower indices of control of corruption, government effectiveness, and rule of law.
International Monetary Fund; February 2008
31 pages; ISBN 9781452797526
Read online, or download in secure EPUB or secure PDF format
Title: Remittances and Institutions: Are Remittances a Curse?
Author: Jihad Dagher; Ralph Chami; Peter Montiel; Yasser Abdih