Do migrant remittances improve the quality of government? Evidence from the Philippines

Abstract

Migrant remittances have been linked to improving the quality of government and political accountability in the developing world. The argument is that migrants have the capacity to withhold remittances to their families when they deem that their local governments are blighted with corruption and bureaucratic inefficiency. Relatedly, migrants also empower citizens in sub-national regions by providing funds to family members who become less beholden to clientistic ties with political parties which concomitantly foster state-level corruption. Thus, relatives of migrants also become social agents who will increasingly expect better governmental performance and demand higher levels of political accountability at the sub-national level. Using data provided by the Philippine National Statistics Office and the National Statistical Coordinating Board of the Philippines (NSCB hereafter), the study provides empirical evidence that the number of migrants (by province) and the amount of remittances sent by migrants are positively associated with governmental effectiveness and higher levels of human development at the provincial level. It is also found that opportunistic shirking on the part of the sub-national governments is also not occurring, as remittances also induce provincial governments to spend more on their citizens, which will likely lead to better public goods provision. The overall findings imply that just like their counterparts from other developing countries, Filipino migrants are agents of democratic accountability.