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Do Remittances Crowd Out The Government¡¯S Redistributive Policy?

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Author Info

  • Ikuho Kochi

    ()
    (Universidad Autonoma de Ciudad Juarez)

  • Raul Alberto Ponce Rodriguez

    ()
    (Universidad Autonoma de Ciudad Juarez)

Abstract

In this paper, we develop a political economy model with a voting equilibrium to analyze the impact of remittances in the government¡¯s redistributive policy. Remittances affect the distribution of income and the households¡¯ demand for public redistribution. In this paper we consider the impact of remittances on two types of redistributive programs: a universal and a targeted transfer program. For an economy with targeted public transfers, we identify conditions in which an increase in remittances crowds out the social transfers of the government. If the redistributive program is universal then an increase in remittances actually increases the size of the government¡¯s transfers.

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Bibliographic Info

Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

Volume (Year): 35 (2010)
Issue (Month): 4 (December)
Pages: 45-72

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Handle: RePEc:jed:journl:v:35:y:2010:i:4:p:45-72

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Web page: http://www.jed.or.kr/
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Related research

Keywords: Redistribution; Performance of Government; Electoral Competition; Political Economy; Remittances;

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Cited by:
  1. Moises Neil V. Serino & Donghun Kim, 2011. "How Do International Remittances Affect Poverty In Developing Countries? A Quantile Regression Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(4), pages 17-40, December.

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