The Korean Journal of Economic Studies
Study on the Correlation between Corruption Level and Remittances
Junghwan Cho(Myongji University), Taehwang Kim(Myongji University)Year 2013Vol. 61No. 2
Abstract
The paper analysed an effect of the corruption level on the remittances byusing 154 countries’ data from 1996 to 2010. By means of the corruptionindices drawn from the two sources(CPI, Control of Corruption Index), wefound out that the higher corruption level is, the more remittances of theemigrants are increasing. This result supports that the corruption level shouldbe included in the consideration of the factors influencing into the remittancesof the emigrants. These consequences demonstrate also that the remittancesby so many emigrants in the developing countries are characterized by thealtruistic motivation. Meanwhile the income level and the financial marketdevelopment level are in a positive correlation with the remittances of theemigrants. And we analyse that the amount of the remittances is increasing tothe higher real economic growth rate and lower unemployment rate of therecipient countries. For the developing countries which have a great policyconcerns for the remittances, even though the inflow has a positive effect onthe economic development, the substantial effect should be limited for thecountries of high corruption. Therefore we suggest that, in order to maximizethe economic utility of the inflow of remittances, it needs institutionalconditions precedent to control and to monitor the corruption.