Curse or Cure? Migrant Remittances and Corruption

This article examines the potential for remittances to aggravate or mitigate corruption in recipient states. Unlike previous research that posits unidirectional effects, I emphasize how governments' and migrants' incentives interact in the domestic political environment and argue that both outcomes are possible. Aggravating effects are most likely in closed regimes because governments require smaller winning coalitions and may be more likely to view remittances as an opportunity to increase political patronage. Moreover, the costs of political activity are higher for remittance recipients in authoritarian regimes, and their probability of influencing corruption is lower. Mitigating effects are most likely in open regimes. Democratic institutions require larger coalitions while lowering the costs of participation. Since remittances' effects vary with political institutions, I test whether other less observable characteristics also influence how remittances influence corruption. Empirical analyses of panel data from 127 developing states between 2000 and 2010 generally support both expectations.