Part 4-II Section Outline

Remittances and Development

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1. What are Remittances and Why Are They Important?
1. Generally, remittances are monies transferred from one individual to another.
2. Remittances Have Increased Significantly and Become a Major Source of Income for Developing Countries.
2. Remittances to Latin America from the United States Illustrate the Extent of the Phenomenon.
3. Remittances Mechanisms and Their Costs
   1. Remittances Occur Through Formal and Informal Channels.
   2. Remittance Fees and Costs Can Be Significant.
   3. Improving the Efficiency and Cost-Savings of Formal Remittance Systems Will Have Multiple Beneficial Effects
4. Effects of Remittances on Developing Countries
1. On balance, remittances benefit developing countries.
   1. Remittances may help developing countries cope with economic crises, improve their credit ratings, and help raise external financing
2. Remittances can nevertheless pose problems.
   1. Significant reductions in remittances can collapse economies:  the “ghost-town” phenomenon.
   2. Remittances may be “easy money” that negatively affects economic development, but the use of remittances will vary from country to country and even among regions within countries.
   3. Poverty-Reduction: Inequality Between Remittance-Haves and Have-Nots
3. Growth

[Part Four Bibliography]

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