Global Poverty Research Group

Impact of Remittances on Poverty

Overview

Much research work has concerned the role of remittance income and processes of economic informalisation more generally on the well-being of those, both receivers and non-receivers, left behind. Empirical evidence about the impact of migrant remittances on poverty and well-being in developing countries has been developed mostly by economists, and generally concludes that remittances are beneficial to development. However, this remains a scant literature, with no generic body of theory that encapsulates assessment of such impacts. Because of the multi-disciplinary nature of remittance studies, and the multifarious nature of the impacts, methodological pluralism is a key feature of the empirical work investigating remittances. In spite of this, most empirical studies on the impact of remittances on poverty have tended to narrowly define it in terms of formally transmitted pecuniary (monetary) assets rather than physical and social assets (Gammeltoft, 2002). There is increasing evidence to show that remittances are much more than pecuniary assets (Rodriguez, 1996; Clark and Drinkwater, 2001; Ballard, 2002; Orozco, 2002) and that official remittances comprise less than half of the total transfers (Choucri, 1986; Russell, 1996; Puri and Ritzema, 1999; Bracking; 2003). The implication of this for researching the impact of remittances on poverty is that additional attention still needs to be paid to these often neglected areas of remittances i.e. the informal, and other non-monetary forms of remittance transfers that also impact on wellbeing. Bracking (2003), explores socio-political analysis to better understand who and who does not benefit from remittance income. In relation primarily to Zimbabwe, the paper suggests that who sends money to who is of critical importance to the welfare of those left behind, and to the outcome of the current political crisis more generally. Remittance income here both contributes to the expansion of the informalised economy, while also underwriting patrimonialism, thus liquidating competing systems of social welfare distribution whose (re)integration is key to the future political dispensation.

Researchers to contact for this project

Sarah Bracking