Remittances, Institutions and Economic Growth

Natalia Catrinescu (), Miguel Leon-Ledesma, Matloob Piracha and Bryce Quillin
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Natalia Catrinescu: European Commission

No 2139, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: There is considerable debate regarding the relative contribution of international migrants' remittances to sustainable economic development. While the rates and levels of officially recorded remittances to developing countries has increased enormously over the last decade, academic and policy-oriented research has not come to a consensus over whether remittances contribute to longer-term growth by building human and financial capital or degrade long-run growth by creating labor substitution and 'Dutch disease' effects. This paper suggests that contradictory findings have emerged when looking at the remittances-growth link because previous studies have not correctly controlled for endogeneity. Using Dynamic Data Panel estimates we find that remittances exert a weakly positive impact on long-term macroeconomic growth. The paper also considers the proposition that the longer-term developmental impact of remittances is increased in the presence of sound economic policies and institutions.

Keywords: remittances; international migration; growth; institutions (search for similar items in EconPapers)
JEL-codes: F22 O15 O47 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2006-05
New Economics Papers: this item is included in nep-fdg and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (103)

Published - published in: World Development, 2009, 37(1), 81-92

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Journal Article: Remittances, Institutions, and Economic Growth (2009)
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