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Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation

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  • Christian Hubert Ebeke

Abstract

This article tests the hypothesis that in a context of ‘bad governance’, remittance inflows strongly reduce public spending on education and health in receiving countries; a phenomenon called the ‘public moral hazard problem’. Using a large sample of 86 developing countries over the period 1996--2007, and after factoring in the endogeneity of remittances, the results suggest a negative impact of remittances on public spending on education and health, when governance is bad in remittance-dependent economies.

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File URL: http://hdl.handle.net/10.1080/00220388.2011.615918
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 48 (2011)
Issue (Month): 8 (May)
Pages: 1009-1025

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Handle: RePEc:taf:jdevst:v:48:y:2012:i:8:p:1009-1025

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Cited by:
  1. Adolfo Barajas & Ralph Chami & Christian Ebeke & Sampawende J.-A. Tapsoba, 2012. "Workers’ Remittances: An Overlooked Channel of International Business Cycle Transmission?," IMF Working Papers 12/251, International Monetary Fund.
  2. Christian Ebeke & Thierry Yogo Urbain, 2013. "Working Paper 185 - Remittances and the Voter Turnout in Sub-Saharan Africa: Evidence from Macro and Micro Level Data," Working Paper Series 989, African Development Bank.
  3. Thomas H.W. ZIESEMER, 2012. "Worker remittances and government behaviour in the receiving countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 37-59, December.

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