David Andrew Singer is associate professor of political science at MIT. He studies international political economy, with a focus on international financial regulation, the influence of global capital flows on government policymaking, international institutions and governance, and the political economy of central banking.
He is author of Regulating Capital: Setting Standards for the International Financial System (Cornell University Press, 2007) as well as articles in American Journal of Political Science, American Political Science Review, International Organization, Journal of Politics, International Studies Quarterly, and other journals.
Before joining the MIT faculty, he was assistant professor of political science at University of Notre Dame (2004-06), and also worked in corporate finance and technology venture development. He was a visiting scholar at the American Academy of Arts and Sciences in 2008-09.
Singer is a graduate of the University of Michigan and Harvard University, where he received his PhD in 2004.
Abstract
This paper argues that migrant remittances can ease government access to capital, generate tax revenue through household consumption, and ultimately allow governments to expand their size. The paper offers three empirical tests. First, using data for 76 developing countries from 1980 to 2007, I find that remittance inflows are associated with greater total government expenditures, whereas other forms of economic integration — especially trade—reflect the conventional view of the constraining influence of global markets. I then explore the possible causal mechanisms behind these results. In the second analysis, I find that remittances are associated with greater tax revenue due to the link between remittances, household consumption, and consumption taxes. These results are robust to using an instrumental variable approach based on exogenous variation in the wealth of migrant host countries. The third test explores the determinants of sovereign borrowing costs in emerging markets and finds that remittances are associated with lower sovereign spreads. The results suggest that private household financial flows can provide financial resources and ease access to credit to governments in developing countries.
