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Do Migrant Remittances Promote Corruption in Pakistan?

Anam Alamdar (), Munazza Ahmed () and Atif Khan Jadoon ()
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Anam Alamdar: Department of Economics, Virtual University of Pakistan
Munazza Ahmed: Department of Economics, Virtual University of Pakistan
Atif Khan Jadoon: Department of Economics, University of the Punjab, Pakistan

iRASD Journal of Economics, 2022, vol. 4, issue 1, 88-97

Abstract: Remittances play a very important role in a political economy perspective that how do remittances impact corruption in the recipient economy? This paper explored the hypothesis that whether the remittances worked as a cure by decreasing corruption being a political resource (accountability perspective), or remittances worked as a curse by allowing the government to divert spending from public goods provision (substitution perspective). The autoregressive distributed lag (ARDL) method is used to check whether a long-run equilibrium exists among selected indicators from 1984 to 2018. The Error Correction Model was used to get the short-run regression results. Empirical analyses have shown the support for remittances being a curse, not a cure for Pakistan in the long run whereas, short-run results revealed reversed resource curse hypothesis.

Keywords: Corruption; Government Expenditure; Law and Order; Political Stability Index; Remittances; ARDL (search for similar items in EconPapers)
Date: 2022
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DOI: 10.52131/joe.2022.0401.0063

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Handle: RePEc:ani:irdjoe:v:4:y:2022:i:1:p:88-97