The Resource Curse Reversed? Remittances and Corruption in Mexico1

Abstract

Tyburski, Michael D. (2012) The Resource Curse Reversed? Remittances and Corruption in Mexico. International Studies Quarterly, doi: 0.1111/j.1468‐2478.2012.00721.x © 2012 International Studies Association Do remittances increase corruption in recipient states? Previous research suggests that remittances allow governments to maintain policies that create corrupt state–society relations. In contrast, this paper argues that remittances mitigate corruption by increasing government accountability and providing other incentives to reform. Using data from Mexico in 2001–2007, this study shows that corruption trended downward in states receiving larger remittance sums, after controlling for political competition, divided government, and market openness. The results are robust to instrumental variable analysis testing for potential endogeneity between corruption and migration. These findings bring attention to remittances as an exogenous resource for reform‐minded groups and suggest that they may operate as the converse of the resource curse.

Financial remittances, trans-border conversations, and the state

“…Research so far has focused on the impact of remittances on electoral vs. non-electoral political behavior (Careja & Emmenegger, 2012;Germano, 2013;Goodman & Hiskey, 2008;Nyblade & O'Mahony, 2014;O'Mahony, 2013;Pérez-Armendáriz & Crow, 2010;Dionne, Inman & Montinola, 2014), as well as on the impact of remittances on the survival of autocrats and the likelihood of democratization (Ahmed, 2012;Escribà-Folch, Meseguer, & Wright, 2015;Moses, 2011;Pfutze, 2012Pfutze, , 2013. Whether remittances constitute yet another resource curse that may feed government corruption is another subject on the research agenda (Tyburski, 2012(Tyburski, , 2014. Surprisingly, the impact that remittances may have on governments' policy choices has been less researched (Ketkar & Ratha, 2010;Leblang, 2010;Singer, 2010).…”

Does emigration reduce corruption?

“…A similar conclusion is obtained by Berdiev et al (2013), who study country-level effects of monetary remittances on corruption in a panel of 111 countries. Contrasting evidence is provided by Tyburski (2012), who finds that, in 2001-2007, the Mexican states receiving relatively more remittances witnessed downward corruption trends. Among the possible reasons, Tyburski mentions the power of remittances to reduce households' dependence on state programs and clientelism, which encourages voting for opposition parties and increases government accountability.…”

“…2 While a few studies have provided evidence at the country or region level (Abdih et al 2012;Beine and Sekkat 2013;Berdiev et al 2013;Tyburski 2012), to the best of our knowledge only one study has provided household-level evidence on this question: Höckel et al (2015) find that migrant households are less likely to make informal payments to teachers in Moldova. While our conclusions are in congruence with Höckel et al (2015), we expand the exploration of the corruption-migration link at the household 1 See, for example, Bologna and Ross (2015), Johnson et al (2011) and (Méon and Sekkat 2005) for the detrimental effects of corruption on entrepreneurship and economic growth.…”

Migrant Remittances and Electoral Accountability

“…In lieu of political voice ... remittances either fuel further exit or empower political voice by making available resources to new groups" (2007,353). Remittance recipients may thus become more independent of clientelistic pressures and develop into interest groups that effectively demand corruption cleanups (Tyburski 2012;. Additionally, Pfutze (2012) claims that the non-taxability of remittances reduces the ability of incumbent governments to maintain political patronage systems, and that this feature of remittances contributed to the electoral success of the opposition party in Mexico's 2000 presidential election.…”