Remittances and Corruption

Abstract

Abstract The chapter extends the main focus of the book, which emphasizes the income effect of remittances and its political consequences, to argue that remitted income from abroad may lower the cost of corruption for recipients’ pocketbooks. It proposes that the pocketbook cost of corruption, which decreases when remittances increase, and increases when remittances decline, shapes recipients’ concerns about corrupt behaviour. The evidence suggests that changes in remittances shape these concerns among only certain groups of recipients: those who are older in age. Empirical insights have implications for the literatures on corruption, remittances, and migration. They also shift the focus of the existing, largely macro-based literature on corruption, to the individual level.