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The Decision to Remit: Is it a Matter of Interpersonal Trust?

Author

Listed:
  • Kasmaoui Kamal

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

  • Makhlouf Farid

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

  • Refk Selmi

    (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)

Abstract

This article seeks to assess the role of the level of interpersonal trust in a country in the remittance landscape. Using historical data from the 2010-2014 wave of the World Value Survey (WVS) for interpersonal trust, our findings underline the substitution role played by interpersonal trust with remittances. More accurately, remittances tend to drop when the rate of interpersonal trust in the country of origin is high. Overall, a rise in trust is likely to underpin social cohesion, limiting therefore the need for remittances. Potential elements including human capital, cultural factors, the quality of institutions, the financial development and the inequality have been advanced to explain the obtained findings.

Suggested Citation

  • Kasmaoui Kamal & Makhlouf Farid & Refk Selmi, 2023. "The Decision to Remit: Is it a Matter of Interpersonal Trust?," Post-Print hal-04075078, HAL.
    • Handle: RePEc:hal:journl:hal-04075078
    Note: View the original document on HAL open archive server: https://hal.science/hal-04075078
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    References listed on IDEAS

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    1. Christian Bjørnskov, 2003. "The Happy Few: Cross–Country Evidence on Social Capital and Life Satisfaction," Kyklos, Wiley Blackwell, vol. 56(1), pages 3-16, February.
    2. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    3. Farid Makhlouf & Kamal Kasmaoui & Johanna Edelbloude, 2019. "Voting With The Wallet: The Response of Remittances to Political Systems," Economics Bulletin, AccessEcon, vol. 39(2), pages 1639-1650.
    4. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    5. Kamal Kasmaoui & Mazhar Mughal & Jamal Bouoiyour, 2018. "Does Trust Influence Economic Growth? Evidence from the Arab World," Economics Bulletin, AccessEcon, vol. 38(2), pages 880-891.
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    8. Abdih, Yasser & Chami, Ralph & Dagher, Jihad & Montiel, Peter, 2012. "Remittances and Institutions: Are Remittances a Curse?," World Development, Elsevier, vol. 40(4), pages 657-666.
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    11. Tertytchnaya, Katerina & De Vries, Catherine E. & Solaz, Hector & Doyle, David, 2018. "When the Money Stops: Fluctuations in Financial Remittances and Incumbent Approval in Central Eastern Europe, the Caucasus and Central Asia," American Political Science Review, Cambridge University Press, vol. 112(4), pages 758-774, November.
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    Cited by:

    1. Farid Makhlouf & Refk Selmi, 2023. ""From Aspirations for Climate Action to the Reality of Climate Disasters": Can Migrants Play Key Role in Disaster Response?," Working Papers hal-04137400, HAL.

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    More about this item

    Keywords

    Interpersonal trust; Remittances; Social capital;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Z0 - Other Special Topics - - General

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