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How do migrant remittances influence patterns of national social spending and to what extent does their influence vary across different political regimes? Previous research finds remittances are a political curse to social spending. Research argues autocracies spend more on corruption thereby diverting resources from other spending categories in the presence of remittances. Other research contends remittances produce a similar spending decline in democracies because household recipients demand less redistribution and elect right-leaning political parties with conservative spending agendas. Using an original panel data set containing migrant remittances and disaggregated data on social spending including patronage, education, health, and social protection, the authors find compelling evidence that remittance produce different spending patterns conditional on regime type across the developing world. These results are robust to using a geographic instrumental variable approach and a case study of subnational variation in Mexico. Findings suggest "hard" authoritarian regimes spend more on education, but less on health and social protections to finance corruption with increasing remittances, while intermediate political regimes behave more like democracies. [ABSTRACT FROM AUTHOR]

Remittances have become an important source of income for many people in the developing world. How do governments respond to the increasing inflow of remittances from abroad? Previous studies have argued formally and empirically that remittances incentivize governments to distribute less and consume more. As governments see that households receive additional income from family abroad, then there may be no perceived benefit in distributing transfers and subsides or spending on public goods. The aim of this paper is to test the hypothesis that remittances decrease the probability a municipality participates in a conditional cash transfer program in El Salvador. I will use municipal-level Salvadoran data to investigate the political influence of remittances. Furthermore, to get around potential endogeneity, data from the American Community Surveys and the geographic distribution of Salvadoran migrants in the United States will be used to instrument for remittances. The use of American data will take into account the exposure a Salvadoran municipality has to migration and remittances. Using both American and Salvadoran data, a municipalitys emigrant population and estimated income abroad can only affect the likelihood that a municipality is selected for the poverty-reduction program through remittances. This study on distributive politics will account for the transnational dynamic that plays a vital role in Salvadoran society as it does in other countries around the world. [ABSTRACT FROM AUTHOR]