The political economy of remittances : emigration, social insurance provision, and political behavior in Mexico

Why do international migrants send money home? What are the implications of these monetary flows for developing countries? Long debated by economists and sociologists, these questions have received very little attention in the political science literature. This dissertation argues, however, that remittances—money sent home or “remitted” by international migrants—have significant implications for the study of politics.

My main contention is that international migrants assume a more significant welfare burden when their home government’s commitment to social insurance provision is in decline. Remittances, in other words, flow to compensate non-emigrating citizens for state retrenchment and the absence of a robust welfare state. I argue that this “transnational safety net” makes remittance recipients (RRs) less vulnerable to economic instability than neighbors who do not receive this money. All else equal, RRs should be more contented with their economic circumstances and have fewer economic grievances with which to politicize. The income-stabilizing and insurance effect of remittances, then, should reduce public pressure on the state, leaving RRs less motivated to mobilize against and punish incumbents for a poor economy when public safety nets are weak.

Evidence comes from an original survey of 768 Mexican households, field interviews, and time-series data published by the Bank of Mexico. Statistical tests reveal that Mexicans abroad remit more to families that do not receive social benefits and send roughly $2.5 million more home for every $10 million reduction in spending on social programs by the Mexican government. Analyses furthermore reveal that despite being very poor on average, RRs tend to enjoy higher levels of income stability, are less likely to identify an economic matter as “the most important problem facing Mexico,” and make more positive and optimistic assessments of the national economy and their own financial circumstances. In the 2006 Mexican presidential election, I find that RRs were up to 15 percent more likely to stay home on election day at the expense of the primary opposition party and significantly less likely to punish the incumbent party with a vote for either of the major opposition parties if they did vote.