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The Political Economy of Collective Remittances: The Mexican 3x1 Program for Migrants

Thursday April 16, 2009, at 14:00
Aula 4 - IBEI
Research seminar
Covadonga Meseguer (CIDE / ICREA-IBEI)
The 3x1 Program for Migrants is a matching grant scheme that seeks to direct the money sent by migrant organizations abroad (hometown associations) to the provision of public and social infrastructure, and to productive projects in migrants’ communities of origin. The municipal, state, and federal administrations multiply by three the amount sent by these organizations. This opens the door to the political manipulation of the program. We explore the impact of a particular facet of Mexican political life on the operation of the 3x1: its recent democratization and the increasing political competition at the municipal level. Relying on the literature on redistributive politics, we posit that an increasing number of effective parties in elections may have had two different effects. On the one hand, the need to cater to more heterogeneous constituencies may have increased the provision of collective goods. On the other hand, smaller coalitions needed to win elections under tighter competition may have caused the allocation of less collective goods and more private (clientelistic) transfers. Using a unique dataset on the 3x1 Program for Migrants for over 2,400 municipalities in the period 2002 through 2007, we find less provision of public goods in competed jurisdictions. Thus, at least in Mexico and in line with other studies, we remain sceptical about an alleged positive effect of migration and political competition in the provision of public goods.