Migrants’ Remittances and State Behaviour in the Neoliberal Era

The study of labour migration and remittances is voluminous both in terms of content as well as contesting results. Characteristic of the economics profession, the literature can be put on a scale ranging from ecstatic optimism to morbid disillusionment as far as the effect of migration and remittances on economic development is concerned, which is partly an outcome of the complexity of the subject matter, but also a result of an approach analogous to the proverbial ‘blind men and the elephant’ parable. Micro studies on the impact of remittances have been both numerous and insightful, but have lacked the essential link in understanding the macro effects in any meaningful way, which is unsurprising given the dominance of neoclassical theory over the last few decades. In instances where macroeconomic implications were arrived at, they were strongly informed by a neoliberal agenda as institutionalized under the Washington consensus by the Bretton Woods organizations. This agenda can be summarized as a receding role for the State and an increasing role for the market in mediating economic relationships in a society, where both these institutions operate in a dichotomous fashion, the former yielding results that are inherently less desirable, and hence ‘inefficient’ to the outcomes generated by the latter (Saad-Filho,2003). Given the general disenchantment with neoliberalism’s insensitivity and inefficacy vis-à-vis poverty eradication, macroeconomic instability and widening income disparity, and the increasing perception of remittances as being an important source of relief on account of these problems in some of the poorest countries, the paper re-examines some of the important issues regarding remittances from a macro-theoretic perspective. As the title suggests, the scope is limited to the examining of implications regarding changes in State functioning with the advent of neoliberalism, and the part remittances play in it.