When the Money Stops: Declines in Financial Remittances and Incumbent Approval in Central-Eastern Europe, the Caucasus and Central Asia
Surges and collapses in the volume and value of financial remittances affect the livelihood of households in developing countries around the world. Yet, political scientists have little to say about how fluctuations in remitted income affect recipients’ political attitudes and behaviour. We argue that when people experience a decline in remittances, they become less satisfied about their household economic situation, and because they are unable to punish the incumbent in the country where the remittances originate from for this economic deterioration, they hold the incumbent in their home economy to account. We empirically test our argument in two ways. First, we rely on a unique four-wave panel study of Kyrgyz citizens between 2010-2013 that allows us to carefully identify the effects of a decline in remitted income on incumbent approval in Kyrgyzstan, as well as on household economic satisfaction. Second, we bolster the external validity of these findings and delve deeper into the blame attribution mechanism by relying on cross-national data from 27 countries covered in the 2010 Life in Transition surveys. Our evidence suggests that declines in remittances decrease incumbent approval and this effect is robust against different ways of measuring remitted income decline. We show that the individual level mechanism linking declines in remittances to a deterioration of incumbent approval is rooted in economic voting. Those who experience a decline in remitted income are less satisfied with their household economic situation and more likely to blame the national incumbent for changes in economic conditions. Our findings speak to an influential literature on how transnational movements of labour influence politics in immigrants’ home economies. Our main contribution is to show that far from exclusively being an ‘international risk-sharing mechanism’ for the developing world, remittances can also increase political volatility in recipient countries.
Catherine de Vries is Professor of Politics in the Department of Government at the University of Essex. She is also an associate member of Nuffield College at the University of Oxford. Together with Bernard Steunenberg, Erik Voeten, Kristian Gleditsh and Scott McClurg she launched and edit a new open source journal in politics science, Research & Politics, dedicated to publishing short and accessible articles in an open source format. She is currently completing a book on Euroscepticism. Currently, she is conducting several research projects that focus on the conditions under which voters reward or punish incumbents for past performance such as austerity (with a special focus on informational asymmetries) as well as public support for and party positioning towards the deepening of European integration.
Hector Solaz is Senior Research Officer at ESSEXLab and the Department of Government of the University of Essex. Prior to assuming this position he was a lecturer in Experimental Economics at the Economics Department of the University of Birmingham, and a fellow of BEEL, and before that a postdoctoral fellow at Nuffield College, University of Oxford. In addition he has held visiting positions at CREED (Universiteit van Amsterdam) and the Universitat Autònoma de Barcelona. His major research and teaching interests are in the areas of behavioural science, political economy, public economics, economic voting and organizational behavior.
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