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Remittances: The New Development Mantra?

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  • Devesh KAPUR

Abstract

Remittances have emerged as an important source of external development finance for developing countries in recent years. This paper examines the causes and implications of remittance flows. It first highlights the severe limitations in remittance data, in sharp contrast to other sources of external finance. It then examines the key trends in remittance flows, and their importance relative to other sources of external finance. The paper subsequently analyses the many complex economic and political effects of remittances. It highlights the fact that remittances are the most stable source of external finance and play a critical social insurance role in many countries afflicted by economic and political crises. While remittances are generally pro-poor, their effects are greatest on transient poverty. However, the long-term effects on structural poverty are less clear, principally because the consequences of remittances on long-term economic development are not well understood. The paper then concludes with some policy options. It suggests a role for an international organization to intermediate these flows to lower transaction costs and increase transparency, which would both enhance these flows and maximize their benefits

Suggested Citation

  • Devesh KAPUR, 2004. "Remittances: The New Development Mantra?," G-24 Discussion Papers 29, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:g24pap:29
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    Cited by:

    1. Kosse, Anneke & Vermeulen, Robert, 2014. "Migrants’ Choice of Remittance Channel: Do General Payment Habits Play a Role?," World Development, Elsevier, vol. 62(C), pages 213-227.
    2. Farid MAKHLOUF & Adil NAAMANE, 2013. "The Impact of Remittances on Economic Growth: The Evidence from Morocco," Working Papers 2013-2014_3, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Sep 2013.
    3. Aysit Tansel & Pinar Yasar, 2010. "Macroeconomic impact of remittances on output growth: Evidence from Turkey," Migration Letters, Transnational Press London, UK, vol. 7(2), pages 132-143, October.
    4. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
    5. Farid MAKHLOUF, 2014. "Propriétés cycliques des transferts de fonds des migrants marocains," Working Papers 2013-2014_9, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Feb 2014.
    6. Yaw Nyarko & Kwabena Gyimah-Brempon, 2011. "Social Safety Nets: The Role of Education, Remittances and Migration," RSCAS Working Papers 2011/26, European University Institute.
    7. Bakewell Oliver, 2009. "Migration, Diasporas and Development: Some Critical Perspectives," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 787-802, December.
    8. Sylvain Dessy & Tiana Rambeloma, 2009. "Immigration Policy, Remittances, and Growth in the Migrant-Sending Country," Cahiers de recherche 0915, CIRPEE.
    9. Eckstein, Susan, 2010. "Remittances and Their Unintended Consequences in Cuba," World Development, Elsevier, vol. 38(7), pages 1047-1055, July.
    10. Prachi Mishra, 2006. "Emigration and Brain Drain; Evidence From the Caribbean," IMF Working Papers 06/25, International Monetary Fund.
    11. Hulya Ulku, 2012. "Remitting Behaviour of Turkish Migrants: Evidence from Household Data in Germany," Urban Studies, Urban Studies Journal Limited, vol. 49(14), pages 3139-3158, November.
    12. Dahlberg , Elisabet, 2005. "Insights into migration and spending patterns based on a small-scale study of garment workers in Phnom Penh," EIJS Working Paper Series 220, Stockholm School of Economics, The European Institute of Japanese Studies.
    13. de Haan, Arjan, 2006. "Migration in the Development Studies Literature: Has It Come Out of Its Marginality?," WIDER Working Paper Series 019, World Institute for Development Economic Research (UNU-WIDER).
    14. Puja Guha, 2014. "Economics of Migration and Remittances: A Review Article," Working Papers id:5618, eSocialSciences.
    15. Dahlberg, Elisabet, 2005. "Insights Into Migration And Spending Patterns Based On A Small-Scale Study Of Garment Workers In Phnom Penh," EIJS Working Paper Series 221, Stockholm School of Economics, The European Institute of Japanese Studies.
    16. Chinmay, Tumbe, 2011. "Remittances in India: Facts and Issues," MPRA Paper 29983, University Library of Munich, Germany.

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