Is the Democratisation Process Responsive to Remittance Flows? Evidence from Bangladesh

Gazi Hassan () and Shafiqur Rahman ()
Additional contact information
Shafiqur Rahman: University of Oregon

Working Papers in Economics from University of Waikato

Abstract: This paper examines how remittances relate to democratisation process in Bangladesh. Using Structural VAR (SVAR) methods, we are able to compensate for the endogeneity issue. While remittances respond to innovations in the macro-political variables, remittances also have important impact on these variables. Our results build a synergy between two opposing findings in the political science literature which find on one hand that remittances stabilise autocracies and also, on the other hand that it fosters the prospect of democratisation. We show that a shock in remittances will have a negative but transitory effect on democracy. Initially there will be a bout of autocratic episodes which will be eventually eliminated and democracy restored to its original level in three to five years. Using an alternative measure of democracy we also show that for a shock in remittances, a small permanent positive effect on democracy is observed after the fifth year which does not revert to zero at end of the ten period horizon.

Keywords: remittances; democratisation; structural VAR (SVAR) (search for similar items in EconPapers)
JEL-codes: F22 O10 O15 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2015-09-21
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.its.waikato.ac.nz/wai/econwp/1506.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wai:econwp:15/06

Access Statistics for this paper

More papers in Working Papers in Economics from University of Waikato Private Bag 3105, Hamilton, New Zealand, 3240. Contact information at EDIRC.
Bibliographic data for series maintained by Geua Boe-Gibson ().