International remittances – the panacea for underdevelopment? A comparative panel data analysis of Sub-Saharan Africa and Latin America
AbstractIn this paper we analyzed a dynamic cross-country panel dataset on 31 sampled developing countries involving 16 Latin America and the Caribbean, and 15 Sub-Sahara African countries within the framework of Blundell-Bond Generalized Method of Moments (GMM). Our results show that generally the impact of remittance inflows on overall development differ across regions. Specifically, the paper reveals that the positive role of international remittances in the development process of underdeveloped economies is more pronounced in Sub-Saharan Africa than in Latin America and the Caribbean sub-region where remittances actually retard socioeconomic development prospects. It would, therefore, be politically imprudent and economically suicidal, to over-depend on international remittances as the panacea for the underdevelopment of Sub-Saharan Africa, Latin America and the Caribbean. The contribution of this paper is unique because it has examined the long-run impact of international remittances on overall socioeconomic development which takes into account real per capita income, income disparity, and other socioeconomic equity factors incorporated into the construction of Human Development Index.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29349.
Date of creation: 2010
Date of revision:
International Remittances; Panel Data; GMM Estimation; Latin America and the Caribbean; Sub-Saharan Africa;
Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
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