Workers’ Remittances and the Dutch‐Disease Argument: Investigating the Relationship in Sub‐Saharan Africa

Abstract

Based on the Salter-Swan-Corden-Dornbusch framework, which argues that capital inflows may appreciate the official exchange rate by aggravating the effects of any previously existing domestic distortions, this paper examines the claim that workers' remittances cause the Dutch disease in sub-Saharan Africa (SSA). Specifically, the study investigates whether remittances cause financial overheating and spending effects. The study adopts the dynamic panel instrumental variable system generalized method of moment (IVSGMM). This study finds that although workers' remittances cause financial overheating, they neither increase general spending nor appreciate the real exchange rate, thereby implying that workers' remittances do not cause the Dutch disease in SSA from 1996 to 2013. These findings suggest that governments should establish diaspora incentive schemes so as to encourage remitters and recipient households' to invest productively. Government efforts should be integral at improving the financial education for remitters and the recipient households so as to avoiding channelling overheating effects to spending effects and to the Dutch disease.

Uzun Dönemde İşçi Döviz Havalelerinin İhracat Üzerindeki Etkisi: Hollanda Hastalığı Geçerli Mi?

“…Bazı çalışmalarda ise Hollanda Hastalığı durumu tespit edilememiştir Ojapinwa ve Nwokoma (2018). ileIto (2019b)'nun çalışmaları bu çalışmalara örnek olarak gösterilebilir Ojapinwa ve Nwokoma (2018),.…”

“…Bazı çalışmalarda ise Hollanda Hastalığı durumu tespit edilememiştir Ojapinwa ve Nwokoma (2018). ileIto (2019b)'nun çalışmaları bu çalışmalara örnek olarak gösterilebilir Ojapinwa ve Nwokoma (2018),. sermaye girişlerinin, yatırım girişlerini tetikleyebileceğini savunan görüşler çerçevesinde Sahra-altı Afrika'da işçi döviz havalelerinin Hollanda Hastalığına neden olup olmadığını 1996-2003 dönemi için araştırmışlardır.…”