Remittances and Social Development

Abstract

This paper reviews the empirical literature on the relationship between remittances and various dimensions of social development in the developing world within a broader conceptual framework of migration and development theory. Migration and remittances are generally part of risk-spreading and co-insurance livelihood strategies pursued by households and families. Migration and remittances also have the potential to improve well-being, stimulate economic growth and reduce poverty directly and indirectly, while their effects on inequality are much more ambiguous. The significant empirical and theoretical advances that have been made over the past several decades highlight the fundamentally heterogeneous nature of migration-remittance-development interactions, as well as their contingency on spatial and temporal scales of analysis, which should forestall any blanket assertions on this issue. Notwithstanding their often considerable blessings for individuals, households and communities, migration and remittances are no panacea for solving more structural development problems. If states fail to implement general social and economic reform, migration and remittances are unlikely to contribute to nationwide sustainable development. Migrants and remittances can neither be blamed for a lack of development nor be expected to trigger takeoff development in generally unattractive investment environments. Therefore, policies aimed at increasing people’s welfare, creating functioning markets, improving social security and public services such as health and education are also likely to enhance the contribution that migration and remittances can make to social development.