DOES REMITTANCE HELP IN REDUCING POVERTY Literature review

DOES REMITTANCE HELP IN REDUCING POVERTY - Literature review Example However, it is generally recognised that altruism is the most potent motivator for remittance-sending, fulfilling a sense of responsibility and motivated out of legitimate affection for family members (Maimbo and Ratha 2005). Remittances have been applauded for improving the lifestyles of family member recipients, improving development for local capital markets, contributing toward infrastructure development, and even serving as a catalyst for improving demand of regional goods and services produced within a community or nation. Remittances may also alleviate some dimensions of poverty within a country or community. This section explores the statistics on remittances, investigates various case studies of remittances on economic growth or individual lifestyle improvement, and focuses on whether remittances can, as supported by empirical data, serve as a predictor for poverty reduction. In 2012, global remittances totalled a whopping $529 billion USD (World Bank 2013). Remittances are theorised to have an instrumental role in the economies of developing countries, with remittances represented a marked contributor to a nation’s economic growth and improvement of the lifestyles of less-affluent citizens. In 2009, $316 billion USD was transferred to developing nations, representing transfer activity of 192 million migrant labourers (World Bank 2011a). Remittances are typically delivered through conventional channels such as Western Union, Xpress Money and MoneyGram, however a marginal percentage of remittances do occur through formal banking infrastructure. There is substantial evidence that higher inflows of remittances are linked with decreased poverty (Gupta et al. 2009; Acosta et al. 2008; Adams 2006; Fajnzylber and Lopez 2005). Remittances have been linked to improvement in a nation’s economic growth (Fayissa 2008; Loxley and Sackey 2008), which is a global predictor of poverty reduction. There