The GNI is often regarded as the best indicator of a country’s living standards, but it does not record unilateral transfers – most importantly remittances – which are amongst the largest types of income inflows to developing countries. For many developing countries GNDI is significantly larger than GNI, from 3% for India to 75% for Liberia. This column argues that GNDI is preferable, since GNI masks heterogeneity in purchasing power.
Clara Capelli, Gianni Vaggi, 06 March 2014
Giulia Bettin, Andrea Presbitero, Nikola Spatafora, 10 February 2014
Remittances are one of the most important financial flows to developing countries – more than three times the level of official development assistance. This column presents recent research on remittance flows from Italy. Their limited volatility and countercyclical behaviour with respect to macroeconomic conditions in the recipient country help mitigate developing countries’ vulnerability to external shocks. Better access to financial services for migrants can foster remittance flows.
Thorsten Beck, Maria Soledad Martinez Peria, 28 September 2009
Remittances impact development along a number of dimensions including poverty alleviation, education, and entrepreneurship. However, such transactions are expensive. This column shows that a bigger stock of migrants and more competition are associated with lower transaction costs. It says policymakers should focus on improving competition in the remittance market, as regulations have only a limited effect.