This paper uses 5-year non-overlapping panel data for the period 1970-2013 to study the effect that remittances have on financial development in sub-Saharan Africa (SSA). The paper further examines whether and how democratic institutions mediate the effect that remittances have on financial development. The panel estimates yield that remittances are significantly positively associated with financial development. The baseline estimates indicate that a 10 percent increase in remittances increases domestic private credit by 0.43 percent and the cumulative effect is around 1.84 percent. Democratic institutions do not significantly mediate the effect that remittances have on financial development in SSA. These results inform debates over remittances' role as an important source of development finance in SSA and suggest that policymakers can exploit the advantages of remittances by pursuing measures to ease the flows of remittances to the region.

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Competition for foreign direct investment (FDI) among developing countries has intensified in recent years. Using a sample of 68 developing countries across dif ferent regions, with data from 1975-2005, this paper investigates whether Latin America and the Caribbean (LAC) dif fers from non-LAC regions in regard to determinants of FDI; the evidence suggests that there are dif ferences. In particular, the stock of infrastructure attracts FDI to LAC and constraints on the executive and high debt discourage FDI to non-LAC. These findings are robust to sample size, dif ferent estimators, endogeneity, and country fixed ef fects.

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