Remittances, Institutions, and Economic Growth

There is considerable debate regarding the relative contribution of international migrants' remittances to sustainable economic development. While officially recorded remittances to developing countries have increased over the last decade. research has not come to a consensus over whether remittances, have a positive or negative impact on long-run growth. This paper argues that contradictory findings have emerged when looking at the remittances-growth link because of an omitted variable bias: specifically, remittances will be more likely to contribute to longer-term growth ill countries with higher quality political and economic policies and institutions. (C) 2008 Elsevier Ltd. All rights reserved