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Title page for ETD etd-04112006-173057

Type of Document Master's Thesis
Author Agbegha, Vivian Ogbomienie
URN etd-04112006-173057
Title Does Political Instability Affect Remittance Flows?
Degree Master of Arts
Department Economic Development
Advisory Committee
Advisor Name Title
Ana Regina Vides de Andrade Committee Chair
  • coup d etat
  • panel estimation
  • economic development
  • political instability
  • remittances
Date of Defense 2005-12-11
Availability unrestricted
International remittances are an increasingly discussed topic for development economists; however, economists disagree about the motivations for remittance-sending. Additionally, there is divergence among economists about which variables determine remittance flows. This thesis examines the

motivations of remittance senders from Latin America and the Caribbean (LAC), as well as from Sub-Saharan Africa (SSA) through the introduction of a political instability variable. This thesis, representing 47 nations,

contains 2 panel estimations of the macroeconomic and political determinants

of remittances to LAC, and SSA. Annual remittances from 1970 to 2003 for the

nations in the two regions were regressed on per capita GDPs of the host and recipient nations, the real interest rate differential between the recipient and host nations, and a political instability index for the recipient nation.

The panel estimation for LAC revealed a statistically significant 5% decrease

in remittances per unit increase in the political instability index. The panel estimation for SSA showed 0 effect with a unit increase in the political instability index. This result was not statistically significant. The result for LAC indicated altruism as the motivation for remittance sending, while the

result for SSA was inconclusive. The evidence asserts that political instability affects remittance flows to LAC, while it does not impact remittance flows to SSA.

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