Remittances and Institutions: What Effects on Economic Growth in Sub-Saharan Africa?

Migrant remittances are a major and stable source of finance for many developing countries. This study re-examines the relationship between migrant remittances and economic growth in Sub-Saharan Africa (SSA) over the period 2005-2020, taking into account the role of institutional governance. The results obtained by the FMOLS and DOLS estimators suggest that remittances have a negative effect on economic growth in sub-Saharan Africa. However, when the quality of institutions is taken into account, this effect is reduced. Consequently, governments and public decision-makers should implement transparent regulatory frameworks to effectively manage remittances and develop programs to raise awareness among remittance recipients of the need to invest in economic activities.