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1 CERDI - Centre d-Études et de Recherches sur le Développement International 2 CES - Centre d-économie de la Sorbonne

Abstract : This paper focuses on the relationships between remittances, elections, and government consumption as a percentage of GDP. We combine data from the National Elections across Democracy and Autocracy NELDA dataset compiled and discussed in Hyde and Marinov 2012 and the World Development Indicators dataset. We focus on 70 young democracies in the developing world. The period under investigation is 1990-2010. The main objective of the paper is to assess whether remittances have an influence on the political manipulation, which may occur prior to an election, through in increase in the government consumption-to-GDP-ratio. It appears that remittances dampen the political business cycle PBC. Furthermore, the PBC is reduced up to the point where it is fully cancelled out at a remittance threshold of 10.7 percent of GDP. Those findings are robust to different econometric strategies and robustness checks.

Keywords : Political Business Cycles Remittances

Author: Jean-Louis Combes - Christian Hubert Ebeke - Mathilde Maurel -



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