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Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation

Abstract : This article tests the hypothesis that in a context of 'bad governance', remittance inflows strongly reduce public spending on education and health in receiving countries; a phenomenon called the 'public moral hazard problem'. Using a large sample of 86 developing countries over the period 1996-2007, and after factoring in the endogeneity of remittances, the results suggest a negative impact of remittances on public spending on education and health, when governance is bad in remittance-dependent economies.
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https://halshs.archives-ouvertes.fr/halshs-00728792
Contributor : Cerdi Etudes & Documents - Publications <>
Submitted on : Thursday, September 6, 2012 - 4:15:26 PM
Last modification on : Tuesday, April 20, 2021 - 10:48:06 AM

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Christian Hubert Ebeke. Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation. The Journal of Development Studies, Taylor & Francis (Routledge), 2012, 48 (8), pp.1009-1025. ⟨halshs-00728792⟩

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