Stephen Cecchetti, Kim Schoenholtz, 08 June 2018

Global remittances total $600 billion annually - equivalent to about four times the value of development assistance. Yet despite huge innovations in the underlying technology, the cost of remittances remains persistently high, at around 7% on average. Stephen Cecchetti and Kim Schoenholtz discuss the causes of this, and suggest some options available to policymakers to lower costs. The G8, G20 and Sustainable Development Goals targetting lower remittance costs could be realised by a two-pronged approach of educating consumers on the one hand and fostering competition among providers on the other.

Stephen Cecchetti, Kim Schoenholtz, 27 March 2018

Despite recent technological advances, the costs for migrants to send money across borders to their families remain extremely expensive, with fees often surpassing 5%. This column explores the various factors shaping remittance prices and identifies two key avenues for cost reduction: consumer education and competition. In particular, expanding mobile technology is helping to displace banks and squeeze remittance costs.

Clara Capelli, Gianni Vaggi, 06 March 2014

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.

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.

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