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Remittances in Nepal: Boon or Bane?


  • Chandan Sapkota


Nepal is one of the highest recipients of remittances (percentage of GDP) in the world. For a small land-locked economy battered by a decade-long Maoist insurgency (1996--2006), prolonged political instability, slow growth rate and large exodus of youths for employment overseas, high inflow of remittances bears a huge significance both at micro and macro levels. Exploring various facets of high migration and remittances, this article shows remittance-induced Dutch disease effects and policy laxity to improve investment climate in Nepal. Since it is costly to sterilise the impact of remittances each year, it might be prudent to learn to live with it and gradually channel remittances to productive usages with a goal to boost productivity.

Suggested Citation

  • Chandan Sapkota, 2013. "Remittances in Nepal: Boon or Bane?," Journal of Development Studies, Taylor & Francis Journals, vol. 49(10), pages 1316-1331, October.
  • Handle: RePEc:taf:jdevst:v:49:y:2013:i:10:p:1316-1331
    DOI: 10.1080/00220388.2013.812196

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    References listed on IDEAS

    1. Valero-Gil, Jorge, 2008. "Remittances and the household’s expenditures on health," MPRA Paper 9572, University Library of Munich, Germany.
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    6. Suhas Ketkar & Dilip Ratha, 2009. "Innovative Financing for Development," World Bank Publications, The World Bank, number 6549, June.
    7. Dilip Ratha & Gemechu Ayana Aga & Ani Silwal, 2012. "Remittances to Developing Countries Will Surpass $400 Billion in 2012," World Bank Other Operational Studies 17062, The World Bank.
    8. Abdih, Yasser & Chami, Ralph & Dagher, Jihad & Montiel, Peter, 2012. "Remittances and Institutions: Are Remittances a Curse?," World Development, Elsevier, vol. 40(4), pages 657-666.
    9. Sanjeev Gupta & Catherine A Pattillo & Smita Wagh, 2007. "Impact of Remittances on Poverty and Financial Development in Sub-Saharan Africa," IMF Working Papers 07/38, International Monetary Fund.
    10. Dalia S Hakura & Ralph Chami & Peter J Montiel, 2009. "Remittances; An Automatic Output Stabilizer?," IMF Working Papers 09/91, International Monetary Fund.
    11. Michael T. Gapen & Ralph Chami & Peter J Montiel & Adolfo Barajas & Connel Fullenkamp, 2009. "Do Workers’ Remittances Promote Economic Growth?," IMF Working Papers 09/153, International Monetary Fund.
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    Cited by:

    1. Tomoya Suzuki, 2019. "Counterfactual Inflation Targeting in Nepal," South Asian Journal of Macroeconomics and Public Finance, , vol. 8(2), pages 97-117, December.
    2. Kishor Sharma, 2015. "Trade Policymaking in a Land‐locked Developing Country: The WTO Review of Nepal," The World Economy, Wiley Blackwell, vol. 38(9), pages 1335-1349, September.
    3. Philippe Le Billon & Manoj Suji & Jeevan Baniya & Bina Limbu & Dinesh Paudel & Katharine Rankin & Nabin Rawal & Sara Shneiderman, 2020. "Disaster Financialization: Earthquakes, Cashflows and Shifting Household Economies in Nepal," Development and Change, International Institute of Social Studies, vol. 51(4), pages 939-969, July.
    4. Kapri, Kul & Ghimire, Shankar, 2020. "Migration, remittance, and agricultural productivity: Evidence from the Nepal Living Standard Survey," World Development Perspectives, Elsevier, vol. 19(C).
    5. Dhruba Bhandari, 2020. "Are Households Utilizing Remittance on Quality Education? An Empirical Study from Nepal," Journal of Development Innovations, KarmaQuest Internatioinal, vol. 4(1), pages 179-195, July.
    6. Janmaat, J. & Lapp, S. & Wannop, T. & Bharati, Luna & Sugden, Fraser, 2015. "Demonstrating complexity with a roleplaying simulation: investing in water in the Indrawati Subbasin, Nepal," IWMI Research Reports 229585, International Water Management Institute.
    7. Hari Sharma & John Gibson, 2019. "Civil War and International Migration from Nepal: Evidence from a Spatial Durbin Model," Working Papers in Economics 19/06, University of Waikato.
    8. Kimberly A. Eddleston & Peter Jaskiewicz & Mike Wright, 2020. "Family firms and internationalization in the Asia-Pacific: the need for multi-level perspectives," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 345-361, June.
    9. Erol BULUT, Abdiqadar Abdignani MOHAMED, 2018. "Remittances and Poverty Reduction in Somalia," Fiscaoeconomia, Tubitak Ulakbim JournalPark (Dergipark), issue 4.
    10. Hari Sharma & John Gibson, 2020. "Effects of International Migration on Child Schooling and Child Labour: Evidence from Nepal," Working Papers in Economics 20/07, University of Waikato.
    11. repec:kqi:journl:2017-1-6 is not listed on IDEAS
    12. Paudel, Ramesh C. & Burke, Paul J., 2015. "Exchange rate policy and export performance in a landlocked developing country: The case of Nepal," Journal of Asian Economics, Elsevier, vol. 38(C), pages 55-63.
    13. Shankar Ghimire & Kul Prasad Kapri, 2020. "Does the Source of Remittance Matter? Differentiated Effects of Earned and Unearned Remittances on Agricultural Productivity," Economies, MDPI, Open Access Journal, vol. 8(1), pages 1-15, January.
    14. Dambar Uprety, 2017. "The Impact of Remittances on Economic Growth in Nepal," Journal of Development Innovations, KarmaQuest Internatioinal, vol. 1(1), pages 114-134, February.

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