Migrant Remittances and Corruption: An Empirical Analysis


This study revisits the sources of corruption using a panel data for 122 countries. It contributes to the literature by analyzing the relationship between remittance and corruption with particular focus on analysis of distribution of dependent variable (corruption). In cross sectional and panel settings, it is found that ‘one standard deviation’ increases the remittance variable in association with an increase in corruption of 0.33 points, or 25 per cent of a standard deviation in the corruption index. It is also investigated whether greater remittances consistently increase corruption, among the most and least corrupt countries. Result of this shows that among the least corrupt countries, remittances do not appear to increase corruption but, among most corrupt countries, it significantly promotes corruption. Findings of this study are robust to different samples specifications, to regional effects and to the alternative econometric techniques.

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