Can Remittances Buy Peace?

Michael Batu

No 1610, Working Papers from University of Windsor, Department of Economics

Abstract: In this paper I study the effect of remittance flows on conflict incidence, onset, and duration in recipient countries. I improve on previous studies by controlling for unobserved country specifc effects, serial correlation, and the possible endogenous relationship between conflict and the tendency for a country to receive remittances. I found that remittance flows have a significant negative causal effect on the incidence and continuation of conflicts. There is no such effect for conflict onset. I also develop a theory which demonstrate that increases in remittance flows can alter the incentives of participating in a rebellion thereby encouraging a deescalation of hostilities and, consequently, a reduction in the number of battle-related deaths.

Keywords: Remittances; conflict; opportunity cost; endogeneity (search for similar items in EconPapers)
JEL-codes: D74 F22 F24 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2016-12
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Persistent link: https://EconPapers.repec.org/RePEc:wis:wpaper:1610

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