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Do remittances improve political institutions? Evidence from Sub-Saharan Africa

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  • Williams, Kevin

Abstract

Do remittances represent a significant positive determinant of democratic institutions in Sub-Saharan Africa? In this paper, we estimate the effect that remittances have on democratic institutions in Sub-Saharan Africa over the period 1975–2014. Using a 5-year non-overlapping panel sample and controlling for country and time fixed effects, we find that remittances are positively associated with democratic institutions. Our baseline system-GMM estimates indicate that a one standard deviation increase in remittance flows improves democratic institutions by around 0.32 standard deviations. Furthermore, we find that remittances improve democratic institutions by increasing schooling and reducing poverty.

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  • Williams, Kevin, 2017. "Do remittances improve political institutions? Evidence from Sub-Saharan Africa," Economic Modelling, Elsevier, vol. 61(C), pages 65-75.
    • Handle: RePEc:eee:ecmode:v:61:y:2017:i:c:p:65-75
    DOI: 10.1016/j.econmod.2016.12.004
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    8. Schneider, Friedrich & Khan, Shabeer & Baharom Abdul Hamid & Khan, Abidullah, 2019. "Does the tax undermine the effect of remittances on shadow economy?," Economics Discussion Papers 2019-67, Kiel Institute for the World Economy (IfW Kiel).
    9. Nana Kwabena Kufuor & Kevin Williams, 2024. "A source of funding for illicit activities or a solution to crime? Evidence from remittance inflows to Jamaica," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 3-25, January.
    10. Mbiankeu Nguea, Stéphane & KAGUENDO, Ulrich Vianney Elisée, 2022. "Are growth effects of foreign capital significant for increasing access to electricity in Africa?," MPRA Paper 111604, University Library of Munich, Germany.
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    13. Assi Okara, 2022. "Building Stronger Economic Institutions in Developing Countries, the Role of FDI," Working Papers hal-03617915, HAL.
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    16. Konte, Maty & Ndubuisi, Gideon, 2019. "Remittances and Bribery in Africa," MERIT Working Papers 2019-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Syed Ali Abbas & Eliyathamby A. Selvanathan & Saroja Selvanathan, 2023. "The foreign aid and remittance nexus: Evidence from South Asia," The World Economy, Wiley Blackwell, vol. 46(7), pages 2032-2053, July.
    18. Abbas, Syed Ali & Selvanathan, Saroja & Selvanathan, Eliyathamby A., 2023. "Structural transformation, urbanization, and remittances in developing countries: A panel VAR analysis," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 55-69.
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    20. Mbiankeu Nguea, Stéphane & Kaguendo, Ulrich Vianney Elisée & Noumba, Issidor, 2022. "Are growth effects of foreign capital significant for increasing access to electricity in Africa?," Energy Policy, Elsevier, vol. 168(C).
    21. Md. Qamruzzaman (a) and Wei Jianguo (b), 2020. "Nexus between Remittance and Household Consumption: Fresh Evidence from Symmetric or Asymmetric Investigation," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(3), pages 1-27, September.
    22. Abbas, Syed Ali & Selvanathan, Eliyathamby A. & Selvanathan, Saroja & Bandaralage, Jayatilleke S., 2021. "Are remittances and foreign aid interlinked? Evidence from least developed and developing countries," Economic Modelling, Elsevier, vol. 94(C), pages 265-275.
    23. Assi Okara, 2018. "Developing inclusive economic institutions in South countries: The role of FDI," CERDI Working papers halshs-01845085, HAL.
    24. Wasseem Mina, 2018. "Migrant Remittances and Social Protection," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1811, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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    More about this item

    Keywords

    Democratic institutions; Remittances; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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