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International remittances – the panacea for underdevelopment? A comparative panel data analysis of Sub-Saharan Africa and Latin America

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  • Adenutsi, Deodat E.
  • Ahortor, Christian R.K.

Abstract

In 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29349.

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Date of creation: 2010
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Handle: RePEc:pra:mprapa:29349

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Keywords: International Remittances; Panel Data; GMM Estimation; Latin America and the Caribbean; Sub-Saharan Africa;

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  1. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
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  13. Gustafsson, Bjorn & Makonnen, Negatu, 1993. "Poverty and Remittances in Lesotho," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 2(1), pages 49-73, May.
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Cited by:
  1. Adenutsi, Deodat E., 2011. "Do remittances alleviate poverty and income inequality in poor countries? Empirical evidence from sub-Saharan Africa," MPRA Paper 37130, University Library of Munich, Germany.

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