The Impact of Foreign Remittances on Poverty Alleviation : Global Evidence

• Autorzy: Muhammad Azam , Muhammad Haseeb , Shamzaeffa Samsudin
• Języki publikacji: EN

Abstrakty

EN

This study using an empirical analysis to examine the impact of foreign remittances along with some other variables (foreign aid, debt, human capital, inflation and income) on poverty alleviation in 39 countries including the lower middle, upper middle and high income countries. The study uses the data covering the period of 1990-2014 and the method of Panel fully modified OLS (FMOLS). The FMOLS estimates reveal that increase in income leads to decrease in poverty. Foreign remittances are found to have positive impact on poverty alleviation and statistically significant only for upper middle income countries. The impacts of aid and debt on poverty are found to be positive, indicating both factors contribute positively to poverty expansion. In the same vein, the results exhibit no visible evidence that foreign aid has an effective apparatus for the poverty mitigation. Thus, policy-makers need to devise an appropriate policy to rationalize dependency on foreign aid and mitigate poverty largely by encouraging remittances inflows. (original abstract)

Słowa kluczowe

EN

Poverty; Foreign aid; Combating poverty; Panel data

PL

Ubóstwo; Pomoc zagraniczna; Przeciwdziałanie ubóstwu; Dane panelowe

• Czasopismo: Economics & Sociology
• Rocznik: 2016
• Tom: 9
• Numer: nr 1
• Strony: 264--281

Twórcy

autor

Muhammad Azam

• Universiti Utara Malaysia, Sintok, Kedah, Malaysia

autor

Muhammad Haseeb

• Universiti Utara Malaysia, Sintok, Kedah, Malaysia

autor

Shamzaeffa Samsudin

• Universiti Utara Malaysia, Sintok, Kedah, Malaysia

Bibliografia

• Acosta, P., Calderon, C., Fajnzylber, P. and Lopez, H. (2006), Remittances and development in Latin America, The World Economy, 29, pp. 957-987.
• Adamu, P. A. (2013), The impact of foreign aid on economic growth in ECOWAS countries - A simultaneous-equation model, WIDER Working Paper No. 2013/143, UNU World Institute for Development Economics Research (UNU-WIDER).
• Adams, Jr. R. H. (2006), Remittances and poverty in Ghana, World Bank Policy Research Working Paper 3939, February.
• Adams, Jr. R. H., and Cuecuecha, A. (2010), The economic impact of international remittances on poverty and household consumption and investment in Indonesia. The World Bank East Asia and Pacific Region, Policy Research Working Paper 5433.
• Adams, Jr. R. and Page, J. (2005), Do international migration and remittances reduce poverty in developing countries? World Development, 33, pp. 1645-1669.
• Adams, Jr. R., Cuecuecha, A. and Page, J. (2008),The impact of remittances on poverty and inequality in Ghana,World Bank Policy Research Working Paper 4732.World Bank, Washington, DC.
• Alvi, E. and Senbeta, A. (2012), Does foreign aid reduce poverty? Journal of International Development, 24, pp. 955-976.
• Antwi, S., Mills, E. F. E. A., and Zhao, X. (2013), Remittances and the poverty nexus: evidence from Ghana, International Journal of Academic Research in Economics and Management Sciences, 2(1), pp. 206-223.
• Armah, S. and Nelson C. (2008), Is foreign aid beneficial for Sub-Saharan Africa? A panel data analysis. Paper (467246) prepared for presentation as a poster at the American Agricultural Economics Association Annual Meeting, Orlando, FL, July 27-29,2008.
• Arndt, C., Jonesm S. and Tarp, F. (2011), Aid effectiveness: opening the black box, Working Paper 2011/44, Helsinki: UNU-WIDER.
• Arvin, B. and Barillas, F. (2002), Foreign aid, poverty reduction, and democracy, Applied Economics, 34(17), pp. 2151-2156.
• Azam, M. and Khan, M. (2011), Workers' remittances and economic growth: evidence from Azerbaijan and Armenia, Global Journal of Human Social Science, XI (VII), pp. 41-46.
• Azam, M. (2014), Foreign Aid and Economic Growth: Lessons for Pakistan, Journal of Applied Economic Sciences, IX, 2(28), pp. 165-180.
• Azam, M. (2015), The role of migrant workers remittances in fostering economic growth: The four Asian developing country's experiences, International Journal of Social Economics, 42(8), pp. 690-705.
• Azam, M., Shahbaz, M., Kyophilavong, P. and Abbas, Q. (2015), External sources and economic growth-the role of foreign remittances: Evidence from Europe and Central Asia. Department of Management Sciences, COMSAT, Working Paper, 2015-014.
• Bahmani-Oskooee, M. and Oyolola, M. (2009), Poverty reduction and aid: cross-country evidence, International Journal of Sociology and Social Policy, 29 (5/6), pp. 264-273.
• Banga, R. and Sahu P. K. (2010), Impact of remittances on poverty in developing Countries. Working Papersid: 2872, eSocialSciences.
• Barai, M. K. (2012), Development dynamics of remittances in Bangladesh. SAGE Open, pp. 1-13, doi:10.1177/2158244012439073, available at:http://sgo.sagepub.com/content/2/1/2158244012439073
• Bertoli, S. and Marchetta, F (2014), Migration, remittances and poverty in Ecuador. Etudes et Documents n°07, CERDI, 2014, available athttp://www.cerdi.org/ed.
• Bhagwati, J. N., and Hamada, K. (1974), The brain drain, international integration of markets for professionals and unemployment, Journal of Development Economics, 1(1), pp. 19-42.
• Boone, P. (1996), Politics and the effectiveness of foreign aid, European Economic Review 40, pp. 289-329.
• Brown, R. P., Connell, J., and Jimenez-Soto, E. V. (2014), Migrants' remittances, poverty and social protection in the South Pacific: Fiji and Tonga, Population, Space and Place, 20(5), pp. 434-454.
• Chami, R., Fullenkamp, C. and Jahjah, S. (2005), Are immigrant remittance flows a source of capital for development, IMF Staff Papers, 52(1), pp. 55-81.
• Chong, A, Gradstein, M, Calderon, C. (2009), Can foreign aid reduce income inequality and poverty? Public Choice, 140 (1-2), pp. 59-84.
• Connors, J. (2012), Foreign aid and global poverty. Department of Economics Wake Forest University-Working Paper no. 17.
• Dalgaard, C. J., and H. Hansen (2001), On aid, growth and good policies, Journal of Development Studies 37(6), pp. 17-41.
• Deaton, A. (2013), The great escape: health, wealth and the origins of inequality, Princeton University Press, Princeton and Oxford, pp. 305-6, 312.
• Djankov, S., Montalvo, J. G. and Reynal-Querol, M. (2006), Does foreign aid help? Cato Journal, 26(1), pp. 1-28.
• Ekanayake, E. M., Halkides, and Mihalis (2008), Do remittances and foreign direct investment promote growth? Evidence from developing countries, Journal of International Business and Economics, 8(1), pp. 58-68.
• Goff, M. L. (2010), How Remittances contribute to poverty reduction: a stabilizing effect. CERDI, Etudes et Documents, E.2010.08, CERDI-CNRS University of Auvergne-FRANCE.
• Gustafsson, B. and Makonnen, N. (1993), Poverty and remittances in Lesotho, Journal of African Economies, 2 (1), pp. 49-73.
• Gupta, S., Pattillo, C. A., & Wagh, S. (2009), Effect of remittances on poverty and financial development in Sub-Saharan Africa, World Development, 37(1), pp. 104-115.
• Hansen, H. and Tarp, F. (2001), Aid and growth regressions, Journal of Development Economics, 64(2), pp. 547-570.
• Hatemi, J. and Sallahuddin, G. (2014), On the causal nexus of remittances and poverty reduction in Bangladesh, Applied Economics, 46(4), pp. 374-392.
• Haque, N. U., and Kim, S.-J. (1995), Human capital flight: impact of migration on income and growth, IMF Staff Papers, 42(3), pp. 577-607.
• Headey, D. (2008), Geopolitics and the effect of foreign aid on economic growth: 1970-2001, Journal of International Development, 20(2), pp. 161-180.
• Hildebrandt, N. and McKenzie, D. (2005), The effects of migration on the child health in Mexico, Economia, 6(1), pp. 257-89.
• Hossain, M. I. (2013), An empirical investigation of the impact of foreign remittances on poverty in developing countries. 9th Asian Business Research Conference, Bangladesh, 20 -21 December, 2013.
• Imai, K. S,.Gaiha, R., Ali, A., and Kaicker, N. (2013), Remittances, growth and poverty: New evidence from Asian countries, Discussion paper series 2013-18, RIEBA, Kobe University-Japan.
• Im, K. S., Pesaran, M. H., and Shin, Y. (2003), Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), pp. 53-74.
• International Monetary Fund (2005), Two current issues facing developing countries, World Economic Outlook.
• ITAD (2013), Joint evaluation of budget support to Tanzania: lessons learned and recommendations for the future, Final Report, Vol. 1, ITAD, Hove, UK.
• Iyoha, M. A. (2004), Foreign aid and economic development in Africa', In: Iyoha, M. A. Macroeconomic: Theory and Policy, Mindex Press, Benin City.
• Jongwanich, J. (2007), Workers' remittances, economic growth and poverty in developing Asia and the Pacific Countries, UNESCAP-Working Paper, WP/07/01.
• Kaya, O., Kaya, I., & Gunter, L. (2013), Foreign aid and the quest for poverty reduction: Is aid to agriculture effective? Journal of Agricultural Economics, 64(3), pp. 583-596.
• Kosack S. (2003), Effective aid: how democracy allows development aid to improve the quality oflife, World Development, 31(1), pp. 1-22.
• Krueger, A. B. (2005), The U.N. aims to cut poverty in half as experts wonder how to measure it, New York Times, February 3.
• Lokshin, M., Bontch-Osmolovski, M., and Glinskaya, E. (2010), Work-related migration and poverty reduction in Nepal, Review of Development Economics, 14, pp. 323-332.
• Levin, A., Lin, C.-F., & James Chu, C.-S. (2002), Unit root tests in panel data: asymptotic and finite-sample properties, Journal of econometrics, 108(1), pp. 1-24.
• McGillivray, M, Fielding, D., Torres, S., and Knowles, S., (2011), Does aid work for the poor? Economic Discussion Paper 114, School of Business Studies, University of Otago, Dunedin.
• McGillivray, M., Pankhurst, A., and Carpenter, D. (2012), Long-term Swedish development co-operation with Sri Lanka, Vietnam and Laos: synthesis of evaluation study findings, Sida Evaluation No.4, Stockholm.
• Moser, G. G. and Ichida, T. (2001), Economic growth and poverty reduction in Sub-Saharan Africa, International Monetary Working Paper-WP/01/112.
• Masud, N. and Yontcheva, B. (2005), Does foreign aid reduce poverty? empirical evidence from nongovernmental and bilateral aid, IMF Working Paper-WP/05/100.
• Maddala, G. S., and Wu, S. (1999), A comparative study of unit root tests with panel data and a new simple test, Oxford Bulletin of Economics and statistics, 61(S1), pp. 631-652.
• Nakamura, T. and McPherson, M. F. (2005), Is foreign aid effective in reducing poverty? World 2005, pp. 1-25.
• OECD (2014), Aid to developing countries rebounds in 2013 to reach an all-time high, Retrieved from http://www.oecd.org/newsroom/aid-to-developing-countries-reboundsin-2013-to-reach-an-all-time-high.htm
• OECD (1985), Twenty five years of development cooperation: a review, OECD, Paris, p. 18.
• Oduor, J. and Khainga, D. (2009), Effectiveness of foreign aid on poverty reduction in Kenya, GDN Working Paper Series, Working Paper No. 34.
• Page, J. and Shimeles, A. (2014), Aid, employment, and poverty reduction in Africa, UNUWIDER, Working Paper 2014/043.
• Petreski, M. and Jovanovic, B. (2013), Remittances and development in the Western Balkans: the cases of Macedonia, Kosovo and Bosnia-Herzegovina. Paper prepared in the framework of the Regional Research Promotion Program in the Western Balkans.
• Pedroni, P. (2000), Fully Modified OLS for Heterogeneous Cointegrated Panels: Department of Economics, Williams College.
• Qayyum, U., Din, M. and Haider, A. (2014), Foreign aid, external debt and governance, Economic Modelling, 37 (February 2014), pp. 41-52.
• Rajan, R. G., and Subramanian, A. (2008), Aid and growth: what does the cross-country evidence really show? The Review of Economics and Statistics, 90 (4), pp. 643-665.
• Rapoport, H. and Docquier, F. (2005), The economics of migrants' remittances, Discussion Paper No. 153, IZA, Bonn-Germany.
• Ratha, D. (2013), The Impact of remittances on economic growth and poverty reduction, Migration Policy Institute. Policy Brief, No. 8 September.
• Riddell, R. C. (2014), Does foreign aid really work? an updated assessment (March 1, 2014), Development Policy Centre Discussion Paper No. 33.
• Rosser, E. (2008), Immigrant remittances, Connecticut Law Review, 41(2008), pp. 1-62.
• Sachs, J. D. and McArthur, W. J. (2001), Institutions and Geography: Comment on Acemoglu, Johnson and Robinson (2000), NBER working paper 8114.
• Serino, M. N. V and Kim, D. (2011), How do international remittances affect poverty in developing countries? A quantile regression analysis, Journal of Economic Development, 36(4), pp. 17-40.
• Sen, A. K. (1999), Development as freedom, Oxford University Press.
• Taylor, J. E., Mora, J., Adams, R. and Lopez-Feldman, A. (2005), Remittances, inequality, and poverty: evidence from rural Mexico' (Chap 6-Mimeo, University of California, Davis).
• The World Bank (2014), Remittances to developing countries to stay robust this year, despite increased deportations of migrant workers, says WB. Retrieved from http://www.worldbank.org/en/news/press-release/2014/04/11/remittances-developingcountries-deportations-migrant-workers-wb
• The World Bank (2013), Migration and remittance flows in Europe and Central Asia: Recent Trends and Outlook, 2013-2016, The World Bank Group.
• The World Bank (2000), World Development Report 2000/2001: Attacking Poverty, World Bank, Washington DC.
• The World Bank (2014), Poverty. Retrieved from http://www.worldbank.org/en/topic/poverty/overview.
• Uruçi, E. and Gedeshi, I. (2003), Remittances management in Albania, Working Papers No 05. Rome: Centro Studi di PoliticaInternazionale.
• United Nations (2011), Impact of remittances on poverty in developing countries, UNCTAD, New York and Geneva.
• UNCTAD (2008), UNCTAD XII: Accra Accord and the Accra Declaration, United Nation publication, UNCTAD/IAOS/2008/2.
• United Nation Information Service (UNIS/INF/488).11 September 2013, From http://www.unis.unvienna.org/unis/en/pressrels/2013/unisinf488.html
• UNDP (2006), What is poverty? Concepts and measures. International Poverty Centre Poverty in Focus, Retrieved from http://www.ipcundp.org/pub/IPCPovertyInFocus9.pdf
• Vargas-Silva, C., Jha, S., and Sugiyarto, G. (2009), Remittances in Asia: implications for the fight against poverty and the pursuit of economic growth, ADB Economics Working Paper Series No. 182.
• Waheed, O. O., Timothy, A. T., Adebayo, S. M. and Ayodele, O. O. (2013), Effects of remittances on poverty among rural households in Nigeria, European Journal of Sustainable Development, 2(4), pp. 263-284.
• Wells, J. (2015), Foreign aid and its importance in relieving poverty, Geodate, 28(3), pp. 5-8.
• World Development Indicators (2015), The World Bank database.

Identyfikatory

DOI

10.14254/2071-789X.2016/9-1/18