Migrant remittances and the onset of civil war

Abstract

Civil wars reflect, in part, internal contestation over the provision of resources. A government’s ability to “buy off” rebellion by providing social welfare payments is one mechanism to help ensure social stability. In times of economic distress, however, the government becomes increasingly constrained in its ability to provide social welfare and, absent some form of financial relief, will be subject to increasing pressure from potential rebel groups. Migrant remittances can serve as a smoothing mechanism that provides for social welfare needs outside the formal mechanisms of the state, and therefore acts to reduce the incentive for rebellion. We develop a model of migrant remittances as a vehicle that provides domestic stability in times of economic constraints. We test hypotheses from this model on World Bank remittance data to 152 countries from 1980 to 2005. Our results suggest that a significant increase in migrant remittances during crises can lower the risk of civil war.