Search

This paper reconsiders the proposition that remittances act as a political curse by reducing the poor's demand for economic redistribution. With a newer democratization model focused on the demand for income protection from the rising groups in society, remittances may instead function as a political blessing. Since remittances increase income not only for the middle-class citizens that receive most of them, but also for the merchant and working classes that do not receive them per the multiplier effect, remittances should increase the demand for political rights to protect the economic assets of these societal groups. Using an error correction model with both country and year fixed effects, it reports a significant positive relationship between the change in democracy and net remittance inflows as a share of GDP using three different operational measures for democracy. It also reports results consistent with the underlying causal argument, showing how remittances increase national income and societal economic freedom. [ABSTRACT FROM AUTHOR]

This paper explores the relationship between a country's political regime type and its de facto exchange rate fixity. It argues that more democratic regimes should be associated with less de facto fixity because the median voter is likely to be a domestically oriented producer with a monetary preference for domestic policy autonomy, requiring more a more flexible exchange rate regime. Focusing on a broad sample of country-years in the post-Bretton Woods era defined by international capital mobility, the statistical results show that not only are more democratic regimes negatively associated with de facto fixity using three different operational measures for this dependent variable, but that this negative relationship gets stronger as the median voter is more likely to be a domestically oriented producer and as societal groups are more able to influence public policy. [ABSTRACT FROM AUTHOR]