Do Remittances Help the Receiving Country?

"If there is any political issue that could use a dose of scientific rigor, it is migration. U.S. immigration policy is widely regarded as a total mess, the European melting pot produces pelting mobs, and all over the world tall fences have been constructed to keep facts from entering the debate. One of the most far-reaching aspects of migration often gets ignored altogether: remittances--the money and gifts that migrants send back to families and friends," says Scientific American. "To be showered with money seems like a happy arrangement for the receiving country. Yet in the 1980s remittances acquired a reputation among social scientists as "easy money" that, like an oil windfall, can rot out an economy. Case studies have found that recipients invest little of the money in farm equipment or business start-ups, preferring instead to go on shopping sprees . . . Today the debate has settled into a 'both sides are right' mode. Some towns achieve prosperity aided by remittances; others get trapped in a cycle of dependency."

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