Political Investment: Remittances and Elections

Angela O’Mahony

University of British Columbia

Migrants as Economic and Political Actors

Migration: 190 million migrants worldwide

Migrants maintain ties with home countries• Economic Engagement: Remittances ($167 bn)• Political Engagement:

– Persists over time– Actively courted by home country politicians

Migrants’ economic influence political influence?

How might remittances reflect a political logic?

H1: Remittances increase in election years

H2: Remittances increase more when the incumbent does not run

H3: Election effect is negatively correlated with home country economic wealth

H4: Election effect is negatively correlated with incidence of natural disasters

H5: Election effect is positively correlated with home country economic growth

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged

Migrant Stock, ln

GDP per capita, ln

GDP Growth

Natural Disasters per capita

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln

GDP per capita, ln

GDP Growth

Natural Disasters per capita

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln

GDP Growth

Natural Disasters per capita

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth

Natural Disasters per capita

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita 0.26 (0.14) ^

High Income Country GDP Growth

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita 0.26 (0.14) ^

High Income Country GDP Growth -0.12 (0.10)

Migrant Stock GDP per capita

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita 0.26 (0.14) ^

High Income Country GDP Growth -0.12 (0.10)

Migrant Stock GDP per capita 0.21 (0.04) **

Migrant Stock GDP Growth

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita 0.26 (0.14) ^

High Income Country GDP Growth -0.12 (0.10)

Migrant Stock GDP per capita 0.21 (0.04) **

Migrant Stock GDP Growth 0.04 (0.03)

Constant

R2 0.93

Observations 1424

DV: Remittances as a % of GDPSample: 109 countries, 1990-2005

Model 1

Remittances as a % of GDP, lagged 0.92 (0.02) **

Migrant Stock, ln 0.03 (0.02) *

GDP per capita, ln -0.23 (0.04) **

GDP Growth -0.03 (0.01) **

Natural Disasters per capita 0.26 (0.14) ^

High Income Country GDP Growth -0.12 (0.10)

Migrant Stock GDP per capita 0.21 (0.04) **

Migrant Stock GDP Growth 0.04 (0.03)

Constant 0.11 (0.30)

R2 0.93

Observations 1424

Model: 2 3 4 5 6

Election 0.20*

(0.11)

Incumbent Runs

Incumbent

Does not Run

Election x

GDP per capita

Election x

Natural Disasters

Election x

GDP Growth

Model: 2 3 4 5 6

Election 0.20*

(0.11)

Incumbent Runs 0.09

(0.13)

Incumbent 0.30*

Does not Run (0.15)

Election x

GDP per capita

Election x

Natural Disasters

Election x

GDP Growth

Model: 2 3 4 5 6

Election 0.20* 0.86^

(0.11) (0.60)

Incumbent Runs 0.09

(0.13)

Incumbent 0.30*

Does not Run (0.15)

Election x -0.09

GDP per capita (0.08)

Election x

Natural Disasters

Election x

GDP Growth

Figure 1Marginal Effect of an Election as GDP per capita Varies

-0.5

0

0.5

1

GDP per capita

Rem

ittan

ces

as a

% o

f GD

P

100 200 400 800 1600 3200 6400 1280

__ Remittances as a % of GDP- - - 90% Confidence Intervals

Model: 2 3 4 5 6

Election 0.20* 0.86^ 0.30**

(0.11) (0.60) (0.12)

Incumbent Runs 0.09

(0.13)

Incumbent 0.30*

Does not Run (0.15)

Election x -0.09

GDP per capita (0.08)

Election x -0.59^

Natural Disasters (0.43)

Election x

GDP Growth

Figure 2Marginal Effect of an Election as Natural Disasters per capita varies

-1

-0.5

0

0.5

0.0 0.2 0.4 0.6 0.8

Natural Disasters per capita

Rem

ittan

ces

as a

% o

f GD

P

__ Remittances as a % of GDP- - - 90% Confidence Intervals

Model: 2 3 4 5 6

Election 0.20* 0.86^ 0.30** 0.05

(0.11) (0.60) (0.12) (0.16)

Incumbent Runs 0.09

(0.13)

Incumbent 0.30*

Does not Run (0.15)

Election x -0.09

GDP per capita (0.08)

Election x -0.59^

Natural Disasters (0.43)

Election x 0.04

GDP Growth (0.03)

Figure 3Marginal Effect of an Election as GDP Growth varies

-0.5

0

0.5

1

GDP Growth

Rem

ittan

ces

as a

% o

f GD

P

__ Remittances as a % of GDP- - - 90% Confidence Intervals

-3.0 9.03.0 6.00.0

Conclusion

• Migrants remit more in election years• But political remittances are context-specific

Future Work

• Sub-national elections• State response