Skip to main content
    • Aa
    • Aa
  • Get access
    Check if you have access via personal or institutional login
  • Cited by 29
  • Cited by
    This article has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Mosley, Layna and Singer, David A. 2015. Migration, Labor, and the International Political Economy. Annual Review of Political Science, Vol. 18, Issue. 1, p. 283.

    Peters, Margaret E. 2015. Emerging Trends in the Social and Behavioral Sciences.

    Solingen, Etel 2012. Of Dominoes and Firewalls: The Domestic, Regional, and Global Politics of International Diffusion1. International Studies Quarterly, Vol. 56, Issue. 4, p. 631.

    Pfutze, Tobias 2014. Clientelism Versus Social Learning: The Electoral Effects of International Migration. International Studies Quarterly, Vol. 58, Issue. 2, p. 295.

    KARCHER, SEBASTIAN and Steinberg, David A. 2013. Assessing the Causes of Capital Account Liberalization: How Measurement Matters1. International Studies Quarterly, Vol. 57, Issue. 1, p. 128.

    Ezeoha, Abel Ebeh 2013. Financial Determinants of International Remittance Flows to the Sub-Saharan African Region. International Migration, Vol. 51, p. e84.

    Tyburski, Michael D. 2012. The Resource Curse Reversed? Remittances and Corruption in Mexico1. International Studies Quarterly, Vol. 56, Issue. 2, p. 339.

    Hassan, Gazi M. and Holmes, Mark J. 2015. Do Remittances Facilitate a Sustainable Current Account?. The World Economy, p. n/a.

    Steinberg, David A. 2016. Developmental states and undervalued exchange rates in the developing world. Review of International Political Economy, Vol. 23, Issue. 3, p. 418.

    Peters, Margaret E. 2014. Trade, Foreign Direct Investment, and Immigration Policy Making in the United States. International Organization, Vol. 68, Issue. 04, p. 811.

    Deonanan, Regan and Williams, Kevin 2016. The effect of remittances on democratic institutions. Applied Economics, p. 1.

    Martin, Lisa L. 2013. Polanyi's Revenge. Perspectives on Politics, Vol. 11, Issue. 01, p. 177.

    Copelovitch, Mark S. and Pevehouse, Jon C.W. 2013. Ties that Bind? Preferential Trade Agreements and Exchange Rate Policy Choice. International Studies Quarterly, Vol. 57, Issue. 2, p. 385.

    AHMED, FAISAL Z. 2012. The Perils of Unearned Foreign Income: Aid, Remittances, and Government Survival. American Political Science Review, Vol. 106, Issue. 01, p. 146.

    Issahaku, Haruna Harvey, Simon K. and Abor, Joshua Y. 2016. Does development finance pose an additional risk to monetary policy?. Review of Development Finance,

    Ebeke, Christian Loko, Boileau and Viseth, Arina 2014. Credit Quality in Developing Economies: Remittances to the Rescue?. IMF Working Papers, Vol. 14, Issue. 144, p. 1.

    Meseguer, Covadonga Lavezzolo, Sebastián and Aparicio, Javier 2016. Financial remittances, trans-border conversations, and the state. Comparative Migration Studies, Vol. 4, Issue. 1,

    Chnaina, Khaled and Makhlouf, Farid 2015. Impact des Transferts de Fonds sur le Taux de Change Réel Effectif en Tunisie. African Development Review, Vol. 27, Issue. 2, p. 145.

    O'Mahony, Angela 2013. Political Investment: Remittances and Elections. British Journal of Political Science, Vol. 43, Issue. 04, p. 799.

    DOYLE, DAVID 2015. Remittances and Social Spending. American Political Science Review, Vol. 109, Issue. 04, p. 785.


Migrant Remittances and Exchange Rate Regimes in the Developing World

  • DOI:
  • Published online: 11 May 2010

This article argues that the international financial consequences of immigration exert a substantial influence on the choice of exchange rate regimes in the developing world. Over the past two decades, migrant remittances have emerged as a significant source of external finance for developing countries, often exceeding conventional sources of capital such as foreign direct investment and bank lending. Remittances are unlike nearly all other capital flows in that they are stable and move countercyclically relative to the recipient country's economy. As a result, they mitigate the costs of forgone domestic monetary policy autonomy and also serve as an international risk-sharing mechanism for developing countries. The observable implication of these arguments is that remittances increase the likelihood that policy makers adopt fixed exchange rates. An analysis of data on de facto exchange rate regimes and a newly available data set on remittances for up to 74 developing countries from 1982 to 2006 provides strong support for these arguments. The results are robust to instrumental variable analysis and the inclusion of multiple economic and political variables.

Corresponding author
David Andrew Singer is Assistant Professor, Department of Political Science, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA 02139 (
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Pablo A. Acosta , Pablo Fajnzylber , and J. Humberto Lopez . 2008. “Remittances and Household Behavior: Evidence for Latin America.” In Remittances and Development: Lessons from Latin America, eds. Pablo Fajnzylber and J. Humberto Lopez . Washington, DC: The World Bank, 133–70.

John S. Ahlquist 2006. “Economic Policy, Institutions, and Capital Flows: Portfolio and Direct Investment Flows in Developing Countries.” International Studies Quarterly 50 (3): 687710.

James Andreoni . 1989. “Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence.” Journal of Political Economy 97 (6): 1447–58.

David M. Andrews 1994. “Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations.” International Studies Quarterly 38: 193218.

David H. Bearce 2007. Monetary Divergence: Domestic Policy Autonomy in the Post-Bretton Woods Era. Ann Arbor: University of Michigan Press.

Thorsten Beck , George Clarke , Alberto Groff , Philip Keefer , and Patrick Walsh . 2001. “New Tools in Comparative Political Economy: The Database of Political Institutions.” World Bank Economic Review 15 (1): 165–76.

William Bernhard , and David Leblang . 2002. “Democratic Processes and Political Risk: Evidence from Foreign Exchange Markets.” American Journal of Political Science 46: 316–33.

Stuart Brown . 2006. “Can Remittances Spur Development? A Critical Survey.” International Studies Review 8: 5575.

Guillermo A. Calvo , and Carmen M. Reinhart . 2002. “Fear of Floating.” Quarterly Journal of Economics 117 (2): 379408.

Chris Canavan , and Mariano Tommasi . 1997. “On the Credibility of Alternative Exchange Rate Regimes.” Journal of Development Economics 54 (1): 101–22.

Menzie Chinn , and Hiro Ito . 2006. “What Matters for Financial Development: Capital Controls, Institutions, and Interactions.” Journal of Development Economics 81 (1): 163–92.

Nazli Choucri . 1986. “The Hidden Economy: A New View of Remittances in the Arab World.” World Development 14 (6): 697712.

Susan M. Collins 1996. “On Becoming More Flexible: Exchange Rate Regimes in Latin America and the Caribbean.” Journal of Development Economics 51 (1): 117–38.

Jorge Durand , Emilio A. Parrado , and Douglas Massey . 1996. “Migradollars and Development: A Reconsideration of the Mexican Case.” International Migration Review 30 (2): 423–44.

Marcus Fleming . 1962. “Domestic Financial Policies under Fixed and under Floating Exchange Rates.” IMF Staff Papers 9: 369–80.

John R. Freeman , Jude C. Hays , and Helmut Stix . 2000. “Democracy and Markets: The Case of Exchange Rates.” American Journal of Political Science 44 (3): 449–68.

Francesco Giavazzi , and Marco Pagano . 1988. “The Advantage of Tying One's Hands.” European Economic Review 32 (5): 1055–82.

Nicholas P. Glytsos 1993. “Measuring the Income Effects of Migrant Remittances: A Methodological Approach Applied to Greece.” Economic Development and Cultural Change 42 (1): 131–68.

Witold Henisz . 2002. “The Institutional Environment for Infrastructure Investment.” Industrial and Corporate Change 11 (2): 355–89.

Michael W. Klein , and Jay C. Shambaugh . 2008. “The Dynamics of Exchange Rate Regimes: Fixes, Floats, and Flips.” Journal of International Economics 75 (1): 7092.

David Leblang . 1997. “Domestic and Systemic Determinants of Capital Controls in the Developed and Developing World.” International Studies Quarterly 41 (3): 435–54.

David Leblang . 1999. “Domestic Political Institutions and Exchange Rate Commitments in the Developing World.” International Studies Quarterly 43 (4): 599620.

Will H. Moore , and Bumba Mukherjee . 2006. “Coalition Government Formation and Foreign Exchange Markets: Theory and Evidence from Europe.” International Studies Quarterly 50 (1): 93118.

Layna Mosley , and David Andrew Singer . 2008. “Taking Stock Seriously: Equity Market Performance, Government Policy, and Financial Globalization.” International Studies Quarterly 52 (2): 405–25.

Robert Mundell . 1960. “The Monetary Dynamics of International Adjustment under Fixed and Flexible Exchange Rates.” Quarterly Journal of Economics 74: 227–50.

Thomas Oatley . 1999. “How Constraining Is Capital Mobility? The Partisan Hypothesis in an Open Economy.” American Journal of Political Science 43 (4): 1003–27.

Maurice Obstfeld , and Kenneth Rogoff . 1995. “The Mirage of Fixed Exchange Rates.” Journal of Economic Perspectives 9 (4): 7396.

Angela O'Mahony . 2007. “Escaping the Ties That Bind: Exchange Rate Choice under Central Bank Independence.” Comparative Political Studies 40 (7): 808–31.

Thomas Plümper , and Vera E. Troeger . 2008. “Fear of Floating and the External Effects of Currency Unions.” American Journal of Political Science 52 (3): 656–76.

Simone Polillo , and Mauro F. Guillén , 2005. “Globalization Pressures and the State: The Global Spread of Central Bank Independence.” American Journal of Sociology 110 (6): 1764–802.

Carmen Reinhart , and Kenneth Rogoff . 2004. “The Modern History of Exchange Rate Arrangements: A Reinterpretation.” Quarterly Journal of Economics 119 (1): 148.

Dani Rodrik . 1998. “Why Do More Open Economies Have Bigger Governments?Journal of Political Economy 106 (5): 9971032.

Kenneth Scheve , and Matthew J. Slaughter . 2004. “Economic Insecurity and the Globalization of Production.” American Journal of Political Science 48 (4): 662–74.

George Shambaugh . 2004. “The Power of Money: Global Capital and Policy Choices in Developing Countries.” American Journal of Political Science 48 (2): 281–95.

Andrew C. Sobel 1999. State Institutions, Private Incentives, Global Capital. Ann Arbor: University of Michigan Press.

David Stasavage . 1997. “The CFA Franc Zone and Fiscal Discipline.” Journal of African Economies 6 (1): 132–67.

Dean Yang . 2008. “Coping with Disaster: The Impact of Hurricanes on International Financial Flows, 1970–2002.” B.E. Journal of Economic Analysis and Policy 8 (1): 143.

Dean Yang , and Hwajung Choi . 2007. “Are Remittances Insurance? Evidence from Rainfall Shocks in the Philippines.” The World Bank Economic Review 21 (2): 219–48.

German Zarate-Hoyos . 2004. “Consumption and Remittances in Migrant Households: Toward a Productive Use of Remittances.” Contemporary Economic Policy 22 (4): 555–65.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *