The Divergent Effects of Remittance Transfers for Post-Disaster States

Nadia Eldemerdash () and Steven T. Landis
Additional contact information
Nadia Eldemerdash: University of Nevada Las Vegas
Steven T. Landis: University of Nevada Las Vegas

Economics of Disasters and Climate Change, 2023, vol. 7, issue 3, No 8, 483-501

Abstract: Abstract This paper asks how remittances flows, the value of which has increased substantially in the last 20 years, moderate disruptions in state capacity generated by rapid-onset natural disasters. Focusing specifically on earthquakes, we consider how remittances affect social welfare and unrest. We propose two causal pathways that reflect the complex effects both natural disasters and remittances have on states and societies. First, we argue that remittances can mitigate political instability by smoothing disruptions in individual consumption, which are most salient during times when states are struggling to supply public goods, as in the aftermath of natural disasters. Second, we argue that remittance flows can supply financial resources that empower dissident groups to mobilize protests and other anti-state action. Although these pathways appear conflicting, we contend that they stem from the same causal mechanism—income smoothing—which is an important refinement in existing research that reports contradictory findings. Our results are supportive of our theoretical argument and show that remittances can paradoxically improve social welfare while also heightening the conditions for social unrest.

Keywords: Remittances; Earthquakes; Social stability; Income smoothing (search for similar items in EconPapers)
JEL-codes: F24 O57 Q54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s41885-023-00136-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:ediscc:v:7:y:2023:i:3:d:10.1007_s41885-023-00136-y

Ordering information: This journal article can be ordered from
https://www.springer ... mental/journal/41885

DOI: 10.1007/s41885-023-00136-y

Access Statistics for this article

Economics of Disasters and Climate Change is currently edited by Ilan Noy and Shunsuke Managi

More articles in Economics of Disasters and Climate Change from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().