5 - Origin Statecraft

Summary

Migrants not only foster investment capital flows toward their home countries; they also invest in their families by sending remittances back to their households. We begin this chapter with a review of the literature on the reasons why migrants remit, as well as the economic and political benefits of their remittances. Our primary contribution focuses on how migrant-sending countries can encourage greater remittance inflows. Over the past several decades, countries have increasingly built political institutions, such as dual citizenship and diaspora-specific government ministries, that attempt to engage their diasporas. We argue, and empirically find, that some of these institutions do incentivize greater remittance inflows, suggesting that origin countries have a significant opportunity to attract this form of external capital. This chapter also includes a new theoretical and empirical perspective on the origin of these institutions – why some countries have quickly adopted diaspora-centric institutions, while others have been slow to do so. We argue and find that countries are quicker to adopt these institutions when their diaspora holds political rights in economically and politically powerful destination countries.