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Role of Governance Quality in Remittances-poverty Relationship: New Insights from Transition Economies

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  • Imtiyaz Ahmad Shah
  • Ghowhar Ahmad Wani

Abstract

This study examines the moderating role of institutional quality on a remittance-poverty relationship using a panel of 16 transition economies for 2002–2020. The study used pooled mean group/autoregressive distributed lag estimation with unit root and cointegration tests. The poverty is proxied by household consumption expenditure. After establishing cointegration, remittances and institutional quality index were found to positively affect poverty alleviation in the long run. The interactive term showed that remittances and institutional quality complemented the remittance-poverty relationship. In addition, a unidirectional causal relationship existed from remittance to poverty alleviation and institutional quality to poverty. Further, bidirectional causality existed between remittances and institutional quality, which confirms their complementary nature in the remittance-poverty relationship. Lastly, policy prescriptions are provided in the conclusion of the article. JEL Codes: F22, F24, J61

Suggested Citation

  • Imtiyaz Ahmad Shah & Ghowhar Ahmad Wani, 2026. "Role of Governance Quality in Remittances-poverty Relationship: New Insights from Transition Economies," Foreign Trade Review, , vol. 61(2), pages 167-189, May.
    • Handle: RePEc:sae:fortra:v:61:y:2026:i:2:p:167-189
    DOI: 10.1177/00157325231214045
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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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