How the Money Immigrants Send Home Contributes to Stability in Developing Countries
Forthcoming from Oxford University Press – May 1, 2018
Rising food prices, climate change, and the ravages of global capitalism have made the poor increasingly vulnerable to economic crises. At the same time, the governments of many developing countries have adopted austerity measures that leave their citizens without a safety net in times of need. This combination poses a potent threat to social and political stability throughout the developing world. How do the poor cope with economic crises when their governments fail to guarantee social welfare? How do societies keep from fracturing under the weight of economic grievances and civil unrest?
Outsourcing Welfare argues that the answers to these questions lie with remittances, the hundreds of billions of dollars that international migrants send to their home countries. Remittances are a leading source of income in dozens of developing economies and a critical lifeline that millions of families use to pay for food, healthcare, clothing, and other basics. In the absence of adequate government social protections, remittances insulate poor families from the full pain of economic crises, and in doing so, reduce the severity of grievances that fuel populist anger, civil unrest, and political instability.
Through stories from his fieldwork in Mexico and Central America and analyses of data from Africa, Latin America, the Caribbean, and the Middle East, Roy Germano shows how remittances buffer economic shocks, contribute to economic optimism, and dampen the threat of popular discontent during economic crises. Germano argues that remittances perform a social, economic, and political function that is strikingly similar to social spending, and that counting on people to migrate and send money home has become a de facto social welfare policy in many developing countries.
Praise for Outsourcing Welfare
“In this important book, Germano draws on data from four regions of the Global South to explore whether households that receive remittances are better protected from economic shocks and hardship and therefore less likely to engage in destabilizing political behavior in the context of global market integration and shrinking welfare states. The book’s substantive contribution to the growing literature on the political economy of remittances is matched by its methodological sophistication and crisp writing style. Germano knows how to tell compelling stories, which he weaves very nicely into the narrative, but he also knows how to run regressions, which he uses to generate very interesting results explained in clear and accessible language.”
-Katrina Burgess, Associate Professor of Political Economy, Fletcher School, Tufts University
“Outsourcing Welfare is a major contribution to the field. Work on the relationship between the receipt of remittances and political preferences is in its infancy and this book, through its detailed and nuanced examination of the political effect that remittances exert across four very different geographical areas, is the first comprehensive study on the relationship between remittances and political behavior. It very neatly synthesizes work on remittances and work on the economic vote and significantly advances the existing literature.”
-David Doyle, Associate Professor of Politics, Fellow of the Latin American Center, University of Oxford
“In Outsourcing Welfare, Roy Germano convincingly argues that the financial remittances sent home by international migrants play a critical role in closing gaping holes in the social safety nets of poor nations, thus defusing populist anger and promoting political stability throughout the developing world, an underappreciated benefit of immigration that citizens in rich countries would do well to bear in mind. Germano is masterful in making us see immigration ‘from the other side.'”
-Douglas S. Massey, Henry G. Bryant Professor of Sociology and Public Affairs, Princeton University