Role of Governance Quality in Remittances-poverty Relationship: New Insights from Transition Economies

Imtiyaz Ahmad Shah and Ghowhar Ahmad Wani

Foreign Trade Review, 2026, vol. 61, issue 2, 167-189

Abstract: This study examines the moderating role of institutional quality on a remittance-poverty relationship using a panel of 16 transition economies for 2002–2020. The study used pooled mean group/autoregressive distributed lag estimation with unit root and cointegration tests. The poverty is proxied by household consumption expenditure. After establishing cointegration, remittances and institutional quality index were found to positively affect poverty alleviation in the long run. The interactive term showed that remittances and institutional quality complemented the remittance-poverty relationship. In addition, a unidirectional causal relationship existed from remittance to poverty alleviation and institutional quality to poverty. Further, bidirectional causality existed between remittances and institutional quality, which confirms their complementary nature in the remittance-poverty relationship. Lastly, policy prescriptions are provided in the conclusion of the article. JEL Codes: F22, F24, J61

Keywords: Poverty; remittances; institutional quality; transition economies (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:61:y:2026:i:2:p:167-189

DOI: 10.1177/00157325231214045

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