Remittances - A Tool for Democratization? A Global Study on Protests and Remittance Flows

Detta är en C-uppsats från Handelshögskolan i Stockholm/Institutionen för nationalekonomi

Sammanfattning: Can remittances function as a tool to overthrow political regimes? This paper aims to answer that question while performing an in-depth analysis of the relation between protests and remittances. Remittances refer to the international money flows from emigrants to their relatives in the country of origin. The paper uses global remittance data in conjunction with protest data the last 30 years to make inferences on this relation. The working hypothesis is that emigrants will support political endeavors such as major protest events by means of their remittance flows, and furthermore that this effect will be the greatest for autocratic regimes. A fixed effects model is utilized in a panel data regression with over 90 countries and 6000 datapoints. In addition, the paper builds upon previous literature on the topic by thoroughly investigating the previously neglected reverse causality issue. What is found is that there is an increase in remittance activity prior to and after a large protest event, therefore a relation between these variables can be confirmed. However, a reverse causality issue is identified and consequently this paper fails to specify a causal direction in the relation between protests and remittances. Furthermore, the paper notes that this increase in remittance activity is not sustained over time.

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