Abstract
Elections in developing countries have increasingly become international events. Previous scholarship identifies many examples in which migrants from developing countries have played a role in financing elections in their home countries and provides cross-national evidence that migrants increase remittances in election years. However, previous cross-national analyses have been limited by their reliance on annual national-level data. This article provides statistical analyses of quarterly subnational data of remittance inflows to Mexican states and new monthly national-level data on remittance inflows for nine countries. These analyses demonstrate that political remittance cycles appear in the quarter prior to an election, can exist both for national and subnational elections, and are influenced by both economic conditions in migrants’ host countries and political conditions in their home countries.
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Notes
Remittance flows are also countercyclical to home country economic performance and increase when natural disasters or other crises strike a home country (Yang 2008), an effect particularly strong for flows to very poor countries. Given our time period and sample of countries we do not highlight this economic conditioning factor further, although it may be important to consider in broader cross-national analyses.
In fact, the political activation effect of competitive elections on new cohorts of voters has been found to extend throughout their lifetime (e.g., Franklin 2004).
The outlier institutionally is Jamaica, which is the sole country in the sample that is parliamentary, and the sole country that during this period was rated a 9 on the POLITY scale. Each of the other eight countries in our sample were rated 7 or 8 on polity and had presidential systems during this time period.
As we expect that, all else equal, states with more migrants abroad receive more remittances than states with fewer migrants, we use a population normalized construction rather than the absolute amount of remittances. The logic underlying this variable construction is that the number of migrants abroad provides a metric for the potential supply of remittance dollars for each state, and this controls for the skewed pattern of absolute remittance flows in this data, due to the size differences in the remittance-receiving countries.
World Bank migration and remittance flow data are available online at the following permanent URL: http://go.worldbank.org/092X1CHHD0 (2012).
See Appendix. We primarily rely on employment data here primarily because measures of US GDP growth are typically quarterly or annually and, thus, not as well-suited for this monthly data.
We use the actual, rather than seasonally corrected, employment-population ratio, for Hispanics and Latinos, which the BLS generates from the Current Population Survey (Series ID: LNU02300009). The data can be accessed online http://www.bls.gov/data/#employment. We use the series for Hispanics and Latinos as the numbers are likely to include a greater proportion of migrants than the other available series.
This was also our practice for two-round presidential elections.
There are a variety of additional reasons one might expect that political remittance cycles might not exist, or at least be as apparent, for the Honduran and Colombian cases. However, as we do not have the means to systematically test such arguments in this data, we leave those issues aside and merely note that remittances to Honduras and Colombia do not exhibit the same pattern of pre-electoral increases shortly before elections, a pattern we see for the other seven countries in our sample.
Whether migrants are more likely to follow local or national elections is not something we pursue in this paper, but theoretically should be directly related to migrants’ motivations for being politically involved. For example, a migrant with a noninstrumental motivation to be a part of Mexico’s democratization, spurred to participate through news coverage in the USA, might know more about and be more interested in a federal election. In contrast, a migrant wishing instrumentally to influence political outcomes based on a desire to create a more favorable business climate in their home state might be more interested in state elections.
Población nacida en México residente en Estados Unidos, 2005, from CONAPO—Table 1.2 in data appendix for Migration 2005 (anexo_2005 in Papers) http://www.conapo.gob.mx/index.php?option=com_content&view=article&id=333&Itemid=15
We also include controls for two and three quarters prior to elections in other models. The effect remains in the preceding quarter. This one quarter effect is comparable to the effects found in the cross-national monthly data reported in the previous section.
It is possible that the increase in remittances found in the lead-up to the 2006 presidential election was also influenced by the relatively good economic conditions in the USA at the time. However, given that we have only one presidential election in this dataset, we cannot gain leverage on the degree to which the increase in remittances above and beyond expected in Q2 of 2006 immediately prior to the presidential election was influenced by the relatively good economic conditions in the USA at the time.
For ease of presentation, we drop the insignificant election variable, including only the one quarter prior to the election. Inclusion of variables capturing the quarter of the election itself (and interacting that with US GDP growth) does not alter the results.
We report the full model in an online appendix, along with other models and robustness checks referenced in our discussion, for reasons of space.
In panel c, we show the expected effect of a gubernatorial election in the subsequent quarter on remittance flows when the gap between the top two parties in the previous federal elections is low (margin held at 1 %) and economic performance varies. The confidence intervals for the marginal effect of a gubernatorial election when US GDP growth is low (−1 %) and high (4 %) do not overlap. Similarly, as can be seen in panel d, when US GDP growth is high (US GDP growth held at 4 %), the confidence intervals for the marginal effect of an election when top two-party margin is low (1 %) and high (30 %) do not overlap.
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Acknowledgments
The authors wish to thank the editors and reviewers in particular for their comments on this article, as well as the participants at conferences and presentations at Centro de Investigación y Docencia Económica, the Southern California Comparative Political Institutions Conference, the University of Southern California, and the Canadian Institute for Advanced Research Institutions, Organizations and Growth Program.
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Nyblade, B., O’Mahony, A. Migrants’ Remittances and Home Country Elections: Cross-National and Subnational Evidence. St Comp Int Dev 49, 44–66 (2014). https://doi.org/10.1007/s12116-014-9148-0
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DOI: https://doi.org/10.1007/s12116-014-9148-0