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Voting With The Wallet: The Response of Remittances to Political Systems

Farid Makhlouf (), Kamal Kasmaoui () and Johanna Edelbloude ()
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Economics Bulletin, 2019, vol. 39, issue 2, 1639-1650

Abstract: Existing economic literature has clearly established that remittances represent a significant source of international capital flows for financing the development of countries of emigration. This paper investigates the empirical relationship between political systems and remittances. In a panel data study of 83 of developing countries from 2007 to 2016, 61 countries were classified as having a relatively advanced democratization process and 22 countries have as having a relatively weak democratization process. By using Generalized Method of Moments (GMM), the results show that countries with advanced democratic processes and economic freedom are more likely to benefit from remittances. Countries still in the process of democratization should accelerate the process in order to incorporate migration into their economic development.

Keywords: Democracy; Remittances; Panel GMM (search for similar items in EconPapers)
JEL-codes: F2 Z1 (search for similar items in EconPapers)
Date: 2019-06-23
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