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This paper analyzes political effects of remittances. The research question I propose asks - what are the effects of remittances on political participation in the recipient countries? I intend to answer the question by testing two opposing hypotheses. The first hypothesis argues that just as dependence on remittances can lead to 'moral hazard' problem on the economic side, it can result in a passive citizenship and decline in political involvement. The theory behind this hypothesis is that voters are rational; they measure the costs and benefits of political participation. When the costs of political participation are higher than the benefits voters are likely to receive from the state they choose to withdraw their participation. Another hypothesis argues that dependence on remittances has the opposite effect, it results in an increase in political participation. The argument for this hypothesis is embedded in the modernization thesis. Since remittance funds represent an increase in income and are often invested in education, we would expect an increase in political participation due to the increase in the socioeconomic status of the recipients. The results of the regression analyses provide support for the first hypothesis. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]