01988cas a2200277 a 4500 AALejournalIMF009804 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451868913 1018-5941 BD-DhAAL BD-DhAAL Dagher, Jihad. Remittances and Institutions : Are Remittances a Curse? / Jihad Dagher, Ralph Chami, Peter Montiel, Yasser Abdih. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper addresses the complex and overlooked relationship between the receipt of workers' remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality - specifically, to an increase in the share of funds diverted by the government for its own purposes. Empirical testing of this proposition is complicated by the likelihood of reverse causality. In a cross section of 111 countries we document a negative impact of the ratio of remittance inflows to GDP on domestic institutional quality, even after controlling for potential reverse causality. We find that a higher ratio of remittances to GDP is associated with lower indices of control of corruption, government effectiveness, and rule of law. Mode of access: Internet Abdih, Yasser. Chami, Ralph. Montiel, Peter. IMF Working Papers; Working Paper ; No. 2008/029 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/029/001.2008.issue-029-en.xml IMF e-Library