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Remittances’ side effects on economy: comparative approach of the Republic of Moldova and other ex-socialist countries

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  • Elina BENEA-POPUȘOI
  • Polina ARIVONICI

Abstract

The purpose of our research has been to ascertain and elaborate on why some countries could not take advantage of migrants’ remittances or even are experiencing some adverse side effects due to them. Moreover, the paper aims to identify an adequate set of policy recommendations for the remittances dependent countries. In order to elucidate the multiple implications of remittances, apart from introduction, literature review, and conclusions, we have structured the research into 3 sub-chapters, examining the connection between remittances and some macroeconomic issues, investment climate in remittances recipient countries, and drawing some policy recommendations. To generate and analyse data we have relied on both qualitative and quantitative secondary data analyses. For quantitative data, we used statistical analysis of relevant indexes elaborated by the World Bank and the Heritage Foundation. While for the qualitative approach, we used thematic analysis of the bibliographic sources. A major finding of our research is that there is a thin line between remittances’ pros and cons, since in fact almost every short-run advantage can turn out into a long-run side effect, primarily as a result of mismanagement and conspicuous consumption of these financial inflows, due to unfavorable business climate and decreased marginal propensity to investment of the population. Therefore, the benefits and adverse side effects of remittances are interdependent.

Suggested Citation

  • Elina BENEA-POPUȘOI & Polina ARIVONICI, 2021. "Remittances’ side effects on economy: comparative approach of the Republic of Moldova and other ex-socialist countries," CSIE Working Papers, Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), issue 17, pages 26-33, June.
  • Handle: RePEc:aem:wpaper:y:2021:i:17:p:26-33
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    References listed on IDEAS

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    1. Catalina Amuedo-Dorantes, 2014. "The good and the bad in remittance flows," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-97, November.
    2. repec:iza:izawol:journl:y:2014:p:97 is not listed on IDEAS
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    1. Elina BENEA-POPUȘOI & Polina ARIVONICI, 2021. "Remittance trap: comparative approach of the Republic of Moldova and other ex-socialist countries," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 7(2), pages 59-76, December.
    2. Alexandru VLADOI & Lara-Greta MERLING & Kevin CASHMAN, 2023. "Drivers And Impacts Of Inflation: A Look At Energy Prices, Exchange Rate Volatility, And Stock Markets," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 9(2), pages 41-52, December.

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