Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation
Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation
This article tests the hypothesis that in a context of ‘bad governance’, remittance inflows strongly reduce public spending on education and health in receiving countries; a phenomenon called the ‘public moral hazard problem’. Using a large sample of 86 developing countries over the period 1996–2007, and after factoring in the endogeneity of remittances, the results suggest a negative impact of remittances on public spending on education and health, when governance is bad in remittance-dependent economies.
CITATION: Ebeke, Christian Hubert. Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation . : Taylor & Francis , 2012. The Journal of Development Studies, Vol. 48, Issue 8, August 2012, pp. 1009-1025 - Available at: https://library.au.int/do-remittances-lead-public-moral-hazard-developing-countries-empirical-investigation-7