Remittances and Institutions: Are Remittances a Curse?
Jihad Dagher and
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Yasser Abdih: International Monetary Fund, http://www.imf.org/external/index.htm
Authors registered in the RePEc Author Service: Ralph Chami
No 2010-08, Center for Development Economics from Department of Economics, Williams College
This paper addresses the complex and overlooked relationship between the receipt of workers’ remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality – specifically, to an increase in the share of funds diverted by the government for its own purposes. In a cross section of 111 countries we empirically verify this proposition and find that a higher ratio of remittances to GDP leads to lower indices of control of corruption, government effectiveness, and rule of law, even after controlling for potential reverse causality.
Keywords: Remittances; Institutions; Corruption (search for similar items in EconPapers)
JEL-codes: D02 D64 F02 F22 F24 (search for similar items in EconPapers)
Pages: 27 pages
New Economics Papers: this item is included in nep-mig
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Journal Article: Remittances and Institutions: Are Remittances a Curse? (2012)
Working Paper: Remittances and Institutions: Are Remittances a Curse? (2010)
Working Paper: Remittances and Institutions: Are Remittances a Curse? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:wil:wilcde:2010-08
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