When the Money Stops: Fluctuations in Financial Remittances and Incumbent Approval in Central Eastern Europe, the Caucasus and Central Asia
by Katerina Tertytchnaya, University of Oxford, Catherine E. De Vries, Vrije Universiteit, Hector Solaz, Vrije Universiteit and David Doyle, University of Oxford
For households across the developing world, remittances, money sent by migrants to family members back in the country they left, are a crucial economic lifeline. Economists have long hailed the personal welfare and insurance benefit of remittances for recipient households. In this paper however, we explore the political effect of remittances, which may not always come with positive implications. Relying on a unique four-wave panel study of Kyrgyz citizens between 2010-2013 and a cross-sectional sample of 28 countries in Central Eastern Europe, the Caucasus and Central Asia, we show that when people experience a decrease (increase) in remittances, they become less (more) satisfied about their household economic situation and misattribute responsibility for this change in their economic fortune to the incumbent at home. Although punishing or rewarding incumbents for fluctuations in remittances might be a rational strategy for voters in contexts where the party system is weak, such misattribution could also compromise rudimentary accountability mechanisms in the developing world. Remittance payments, far from exclusively being the international risk-sharing mechanism acclaimed by economists, might produce a form of political dependency, where economic events abroad shape political outcomes at home.