Lessons learned from monitoring the costs of international remittances and global efforts to lower costs

Abstract

International remittances constitute an important source of income in many developing economies. However, the cost of a remittance transaction can be high, especially relative to the amount sent and the incomes of migrants and receiving families. As such, reducing the cost of remittances has been a part of the international development agenda. This paper provides an account of the development of targets for remittance cost reduction in the international fora, and the ongoing efforts for monitoring remittance costs. In doing so, the paper describes the World Bank-managed Remittance Prices Worldwide database, which has become the primary tool for measuring progress towards the remittances targets, along with the lessons the World Bank has learned from developing and managing this database. The paper also discusses specific country-level actions that have been effective in improving the remittances market and services, with a focus on small states where remittance costs remain higher than the global average.