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Remittance inflows, democracy and economic freedom in developing countries: An approach based on democratic regimes

Author

Listed:
  • Sawadogo, Relwendé
  • Semedo, Gervasio
  • Bakouan, Pousseni

Abstract

Do migrant remittances have effects differentiated on democracy in developing countries? This paper addresses this issue by examining the political impact of remittances in 76 countries between 2000 and 2020. Unlike previous studies, this paper hypothesises that the effect of remittances varies greatly across different groups of countries and that this variation is related to the level of economic freedom in these countries. Results obtained using the FMM method with an instrumental variable confirm this hypothesis by demonstrating that the impact on democracy differs across three groups of countries. Furthermore, remittances only enhance democracy in countries with higher levels of economic freedom. These results imply that developing countries must first undertake deep reforms to enhance their economic freedom if they are to reap the full political benefits of their migrants' remittances.

Suggested Citation

  • Sawadogo, Relwendé & Semedo, Gervasio & Bakouan, Pousseni, 2026. "Remittance inflows, democracy and economic freedom in developing countries: An approach based on democratic regimes," Economic Modelling, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:ecmode:v:162:y:2026:i:c:s0264999326001811
    DOI: 10.1016/j.econmod.2026.107652
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    Keywords

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    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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