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Effect of Remittances on Poverty and Financial Development in Sub-Saharan Africa

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  • Gupta, Sanjeev
  • Pattillo, Catherine A.
  • Wagh, Smita
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    Abstract

    Summary This paper assesses the effect of the steadily growing remittance flows to sub-Saharan Africa. Though the region receives only a small portion of the total recorded remittances to developing countries, and the volume of aid flows to sub-Saharan Africa swamps remittances, this paper finds that remittances, which are a stable, private transfer, have a direct poverty-mitigating effect, and promote financial development. These findings hold even after factoring in the reverse causality between remittances, poverty, and financial development. The paper posits that formalizing such flows can serve as an effective access point for "unbanked" individuals, and households.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 37 (2009)
    Issue (Month): 1 (January)
    Pages: 104-115

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    Handle: RePEc:eee:wdevel:v:37:y:2009:i:1:p:104-115

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    Web page: http://www.elsevier.com/locate/worlddev

    Related research

    Keywords: remittances poverty financial development Africa;

    References

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    21. Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
    22. Ravallion, Martin & Shaohua Chen, 1996. "What can new survey data tell us about recent changes in distribution and poverty?," Policy Research Working Paper Series 1694, The World Bank.
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    24. Oded Stark & J. Taylor, 1989. "Relative deprivation and international migration oded stark," Demography, Springer, vol. 26(1), pages 1-14, February.
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