Harnessing remittances for the poor: the role of institutions

Abstract

This paper investigates the direct effect of institutions on poverty and explores whether the remittances and poverty link can be strengthened by institutions in Sub-Saharan Africa. The results suggest that a country characterized by sound financial development and good and stable government with systems to control corruption and attracting investment will provide the enabling environment to reduce the rate, depth and severity of poverty. Such quality institutional attributes reinforce the effectiveness of international remittances in reducing poverty.