Remittances—the money or goods that migrants send home to support their families and friends—have become increasingly important in developing countries. In nations like Haiti, Honduras, and Tajikistan, remittances account for more than 20% of their respective GDPs. Interestingly, many of these top recipient countries also rank among the most corrupt in the world, at least according to Transparency International’s Corruption Perceptions Index. While that correlation does not by itself establish causation, it does invite the question of whether large flows of remittances have any meaningful impact on corruption within the recipient country.
Surprisingly, this question has been “virtually ignored” in academic literature. Only a few studies investigate the connection between remittances and corruption, and the handful of papers on this topic come to quite different conclusions.