The Institutional Quality Impact on Remittances in the ECOWAS Sub‐Region

Abstract

AbstractThe paper seeks to examine the impactful role of institutions in attracting remittances inflow to ECOWAS region for the period 1996–2013. In a bid to achieve this key objective, a system generalized method of moment (GMM) is adopted on a panel dataset in which insightful outcomes emanate. The results reveal an appreciable impact of institutional infrastructures on the migrants’ remittances in the region. More specifically, institutional measures of governance appear to act as a spur on remittances, but other institutional decompositions like economic and political governance structures constitute avoidable drags, judging by theoretical priors and statistical levels of significance. These results remain valid to the exclusion of the francophone countries from the original dataset. On the policy front, the overall target is for government to formulate policies that seek to address the symptomatic causes of low inflow of remittances into the region, with special focus on the institutional dimension of the governance framework. Among the auxiliary policy targets include those that would address the problems of dysfunctional institutions, as well as those that would deepen financial systems and engender improved growth of GDP per capita. The study also makes some suggestions for future enquiries.