Migrant Remittances and Exchange Rate Regimes in the Developing World

摘要

This article argues that the international financial consequences of immigration exert a substan-ntial influence on the choice of exchange rate regimes in the developing world. Over the pastntwo decades, migrant remittances have emerged as a significant source of external finance forndeveloping countries, often exceeding conventional sources of capital such as foreign direct investmentnand bank lending. Remittances are unlike nearly all other capital flows in that they are stable andnmove countercyclically relative to the recipient country’s economy. As a result, they mitigate the costs ofnforgone domestic monetary policy autonomy and also serve as an international risk-sharing mechanismnfor developing countries. The observable implication of these arguments is that remittances increase thenlikelihood that policy makers adopt fixed exchange rates. An analysis of data on de facto exchange ratenregimes and a newly available data set on remittances for up to 74 developing countries from 1982 ton2006 provides strong support for these arguments. The results are robust to instrumental variable analysisnand the inclusion of multiple economic and political variables.