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Impact of remittances on economic growth and poverty reduction amongst CIS countries

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  • Mubinzhon Abduvaliev
  • Ricardo Bustillo

Abstract

The main goal of this paper is to assess the effect of remittances on economic growth and poverty reduction amongst the post-Soviet states, compared with other external sources of capital, such as foreign aid and foreign direct investment. In this paper we use a panel data set on economic growth and poverty estimates (poverty headcount, poverty gap and poverty severity) in 10 selected former post-Soviet republics i.e. Commonwealth of Independent States (CIS). We found that, on average, a 1% increase in remittance flows provokes around a 0.25% rise in per capita GDP and a 2% decline in poverty severity. Remittances seem to have produced a significant reduction on poverty through increasing income and smoothing consumption levels.

Suggested Citation

  • Mubinzhon Abduvaliev & Ricardo Bustillo, 2020. "Impact of remittances on economic growth and poverty reduction amongst CIS countries," Post-Communist Economies, Taylor & Francis Journals, vol. 32(4), pages 525-546, May.
    • Handle: RePEc:taf:pocoec:v:32:y:2020:i:4:p:525-546
    DOI: 10.1080/14631377.2019.1678094
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    Cited by:

    1. Ololade Periola & Monsurat Foluke Salami, 2024. "Remittance outflow, financial development and macroeconomic indicators: evidence from the UK," Future Business Journal, Springer, vol. 10(1), pages 1-12, December.
    2. Christiana Afriyie Manu & Peter Arhenful & Mathew Owusu-Mensah, 2023. "Does Financial Development in Relation to Remittances influence Economic Growth in Sub-Saharan Africa?," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(6), pages 1-17.
    3. Farrukh Nawaz Kayani, 2022. "Analyzing the Impact of Foreign Remittances uponPoverty: A Case of Uzbekistan from Central Asia," International Journal of Economics and Financial Issues, Econjournals, vol. 12(1), pages 1-6.
    4. Alsamara, Mouyad & Mrabet, Zouhair, 2023. "Investigating the impact of remittance outflows and oil price on economic growth in Gulf Cooperation Council countries," Resources Policy, Elsevier, vol. 82(C).
    5. Zakia Batool & Muhammad Haroon & Sajjad Ali & Rashid Ahmad, 2022. "Remittances and Economic Growth: Exploring the Role of Financial Development," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 127-134, March.
    6. Md. Zobayer Bin Amir & Md. Khaled Bin Amir, 2024. "Impact of Remittances on Economic Growth in Africa: An Econometric Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 14(1), pages 64-72, January.
    7. Isaac K. Ofori & Emmanuel Gbolonyo & Marcel A. T. Dossou & Richard K. Nkrumah, 2022. "Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy," Working Papers 22/035, European Xtramile Centre of African Studies (EXCAS).
    8. Titus Ayobami Ojeyinka & Cleopatra Oluseye Ibukun, 2024. "Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-28, June.
    9. Iordache Mihaela & Matei Mihaela & Țiţan Emilia, 2023. "Global Connections: Examining the Role of Remittances in Economic development," Journal of Social and Economic Statistics, Sciendo, vol. 12(2), pages 53-71, December.
    10. Zeynep Gizem Can & Hakki Ciftci, 2022. "International Remittances and Poverty: Blessing or Curse?," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(6), pages 544-561, June.
    11. Abdullah Mohammed Al-Malki & Mehboob-Ul Hassan & Jabbar Ul-Haq, 2023. "Nexus between remittance outflows and economic growth in GCC countries: the mediating role of financial development," Applied Economics, Taylor & Francis Journals, vol. 55(46), pages 5451-5463, October.
    12. Su, Chi-Wei & Sun, Tiezhu & Ahmad, Shabbir & Mirza, Nawazish, 2021. "Does institutional quality and remittances inflow crowd-in private investment to avoid Dutch Disease? A case for emerging seven (E7) economies," Resources Policy, Elsevier, vol. 72(C).
    13. Basharat Rehman & Ahmad Raza & Mehreen Fatima & Zhen Wang & Saba Javed & Usman Aslam, 2023. "Investigating The Relationship Between Migration And Economic Development," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(2), pages 133-141.
    14. Anam Alamdar & Munazza Ahmed & Atif Khan Jadoon, 2022. "Do Migrant Remittances Promote Corruption in Pakistan?," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 88-97, March.
    15. Akhtar Gul & Fatima Zahra & Anum Iqbal & Tanbila Ghafoor & Musaddiq Hussain, 2020. "Linkage Between Poverty, Inequality, and Income Distribution: A Case on Bannu District, Pakistan," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(4), pages 330-339, December.
    16. Abbas, Syed Ali & Selvanathan, Eliyathamby A. & Selvanathan, Saroja & Bandaralage, Jayatilleke S., 2021. "Are remittances and foreign aid interlinked? Evidence from least developed and developing countries," Economic Modelling, Elsevier, vol. 94(C), pages 265-275.
    17. Daniel Lim & Michael Groschek, 2021. "Public Debt and Economic Growth in Switzerland," Journal of Contemporary Research in Business, Economics and Finance, Learning Gate, vol. 3(2), pages 39-47.
    18. Waliu O. Shittu & Gazi M. Hassan & Frank G. Scrimgeour, 2023. "COVID-19 and the Role of Remittances on Sustainable Development: Insights from Sub-Saharan Africa," Working Papers in Economics 23/05, University of Waikato.
    19. Mesbah Fathy Sharaf & Abdelhalem Mahmoud Shahen, 2022. "The Threshold Impact of Remittances on Financial Development: New Evidence from Egypt," Working Papers 1545, Economic Research Forum, revised 20 Apr 2022.
    20. James Temitope Dada & Taiwo Akinlo, 2023. "Remittances-Finance-Growth Trilogy: Do Remittance And Financial Development Complement Or Substitute Each Other To Affect Growth In Nigeria?," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(236), pages 105-138, January –.
    21. Wen Wu & Leow Hon-Wei & Siyao Yang & Iskandar Muda & Zhaoyi Xu, 2023. "Nexus between financial inclusion, workers’ remittances, and unemployment rate in Asian economies," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    22. Moukpè Gniniguè & Essossinam Ali, 2022. "Migrant Remittances and Economic Growth in ECOWAS Countries: Does Digitalization Matter?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2517-2542, October.
    23. Boburmirzo Ibrokhimov & Rashid Javed & Mazhar Mughal, 2023. "Migrants remittances and fertility in the Post-Soviet states," Post-Communist Economies, Taylor & Francis Journals, vol. 35(6), pages 574-596, August.
    24. Abbas, Syed Ali & Selvanathan, Saroja & Selvanathan, Eliyathamby A., 2023. "Structural transformation, urbanization, and remittances in developing countries: A panel VAR analysis," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 55-69.
    25. Ayaz Ahmed & Nasir Iqbal & Ghulam Mustafa, 2020. "Measuring the Impact of Remittances on Housing Demand: Evidence from Large Cities in Pakistan," PIDE-Working Papers 2020:10, Pakistan Institute of Development Economics.

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