wise Breakdown—Summary of Each Chapter
This section offers a chapter wise breakdown of what we attempted and how this book is laid out.
In Chapter 2, we examine the motivations to send and receive money. We ask simple questions: Why do people send money to their friends, families, or other relatives, in the country of their origin? How long do they send this money for, and under what conditions do they stop doing this? This set of questions yielded some interesting and surprising answers. As scholars and observers of the phenomenon of remittances, we were pleasantly surprised by the range of answers we found—both in scholarly literature as well as the empirical data that is produced by organizations such as the World Bank, among others.
As Lucas and Stark point out in their seminal paper, the most important motive for people to send remittances is pure altruism (1985, p. 903). Lucas and Stark test three theories of possible motivations in the context of a single country and suggest that there is either pure altruism or self-interest or perhaps a need to return to the country in dignity, which is also motivated by self-interest. What this implies is that there could be more than one motivation at play as a family unit manages this process of remittances.
Chapter 3, titled “Growth of Money Transfers: Theorizing Technology, Distance, and Money,” deals with the ongoing technological changes and how they impact the sending and receiving of remittances. With the rise of firms such as MoneyGram, Western Union, and others that are based in Western nations and act as conduits of the transfer of money, we seek to examine how these firms act as bridges of connection. What role do they play, besides being pure agents of money transfer? Do they lobby the government for fairer and better regulations or do they seek to just profit from this basic need of millions, around the world, to send money to their loved ones? We seek to offer a theoretical perspective of this important component of the remittance landscape, in this chapter. Based on an in-depth analysis and interviews with individuals from the remittances sector, we offer a critical perspective that delves deep into relationship between technology, policy, and governance. Our goal is not to map the historical development of technology, but to offer a nuanced and sophisticated analysis of how technology, policy, and people come together to shape this field.
We offer insights from some of the leading practitioners and thinkers in this space and suggest that based on a close examination of the sector, there is reason to be optimistic. The technology-remittances space is one characterized by high innovation with policy catching up with the demand for greater regulation from all ends: from money transfer companies to banks. Even end-users are asking for some form of regulation when it comes to crypto remittances, as it would make it easier and safer for people to transfer money.
There are cases when unregulated forms of money transfer are the lifeline of the economy. Edwina A. Thompson, a researcher who has studied issues of trust extensively in the realm of hawala, arguably the oldest ‘technology’ of transfer of money, argues that trust is the backbone of any transfer of money. Thompson, whose research covers much of the ungoverned parts of the world, points to the widespread use of hawala in Iraq and refugee or internally displaced settlements across Africa and South Asia. She writes,
In early 2005, after the tsunami wave hit Aceh, for example, money dealers reportedly established an emergency communications system using the flexsi local mobile network to help migrants locate their families and arrange for the delivery of funds through bank accounts or directly to the IDP camps themselves.
(2011, p. 1)
This anecdote illustrates the manner in which trust, combined with existing technologies, saved the day for millions of people who would have remained stranded, without money, if not for this structure in place.
Chapter 4, titled “Remittances by the Numbers: How Much Is Sent and Where,” provides a quantitative understanding of money transfers. This chapter offers the number lens from a purely hard data driven definition. We focus on inflows of money for Mexico and India while being cognizant of outflows from the U.S.
It is common knowledge among economists and those who study remittances that money transfers are at an all-time high (2019) and they total roughly three times more than International Development Aid, while also being the largest source of funding for many nations. But what are the regional and country-specific differences of sending money? This chapter seeks to paint a quantitative, data-driven landscape of remittances. We continue our focus on Mexico and India as receivers while creating a funnel-like journey through remittance data, beginning on a global scale, moving to a regional, and then discussing the individual nations. It is our hope that by offering this layout, you will be able to see the complexities and nuanced differences in remittance. And gain an understanding of the changes, impacts, and casualties of remittance giving.
The quantity of remittances varies across time and location; there are certain trends and policy angles that have shaped and continue to emerge. This chapter contextualizes these occurrences and provides a numbers-based answer to how remittances have evolved or devolved.
Data and discussion is derived heavily from the World Bank and the latest (2019) The Global Knowledge Partnership on Migration and Development (KNOMAD) report; data points are made available in an open-access format from the World Bank. We also utilized many reports from CEMLA and sought out data discussion from academic articles to further shape this chapter and the information included.
Chapter 5, titled “Policy and Remittances: Human Needs and the Shaping of Practice With Policy,” focuses on the policies around remittances and giving. This chapter pays close and specific attention to Mexico and India, offering the two different lenses as a juxtaposition to understanding the complexities of remittances giving. We venture into the realm of governmental imposed policies and how humanitarian aid is policed, discussing the frameworks that have led to the current state of remittances while also outlining the impact that regulations have on remittances and delving into how policy shapes practice. Our aim for this chapter is to explore how remittances can play a critical role in public policy, attempt to deduce trends, and further the conversation of what changes need to take place.
Policy frameworks vary from country to country and at times from state to state, but the mere fact that remittances are a huge source of funding for many LMICs (low- to middle-income countries) spurs that conversation that there needs to be a useable, viable, and sustainable framework around money transfers. The age old debate of whether practice should develop policy or whether policy has the right to shape practice is echoed in this chapter’s lensing. Furthermore, we delve into the delivery and methods of sending money with the differences in associated costs and in some areas that lack of competition resulting in inflated costs of sending. Coupled with this discussion is the overarching Sustainable Development Goals 2030 that aim for a more favorable global cost of sending money (aims are slated for 3%).
While a full policy analysis with situational awareness, alternatives, proposed solutions, and a final recommendation is not designed within this chapter, the next steps and a wonderful graduate project would be to dissect the trends in policy on a country-to-country basis, tracking similarities and divergences, seeking to offer a conceptualized internationalization strategy-based framework. However, for the purposes of this chapter we provide a foundational understanding of the policies present in Mexico and India while discussing the merits and implications.
In Chapter 6, titled “Discourse of Remittances: How It Shapes Praxis in India, U.S.A., and Mexico,” we look at purely the discourses of remittances and how it shapes practices of migration. Do migrants influence the remittances behavior of others? How does the discourse of remittance shape the lives of those who are dependent on the money sent? We examine this as well as the sustainability of continued remittances— both the giving and receiving, using a meta-analytic review of published government policy documents and reports. This chapter delves into the social paradigm that is created through the remittance relationship. We also pay attention to the policy discourses of remittances and how it impacts practice.
We look at how the governments of India, Mexico, U.S., and Saudi Arabia have shaped the discourses around remittances in the recent past and how this is shaping the field as a whole. We suggest that given the key role of government in regulating this largely unregulated market, it is imperative that governments keep up with the ongoing rapid pace of innovation.
Discourses shape practices. This insight from various theorists guides our analysis of what each of the governments is going, as it grapples with this phenomenon of remittances, which has existed for centuries now. Will governments frame this as an ‘unregulated’ and ‘illegal’ market that needs taming or will the policies in each nation-state adapt to the needs of each of these societies? This remains an open question.
Chapter 7, titled “Case Study: India as a Receiver,” examines one of the most significant sending-receiving pairs of U.S.-India. Using India and the U.S. respectively as paradigmatic examples of the largest recipient and sender respectively, we take a close look at the dynamics of how remittances came to be. This includes historical and sociological examination of this phenomenon. We look at the forces that shaped remittance behavior and future implications of policies. Through review of documents, interviews, this chapter relies heavily on the individual experiences of those sending remittances, while offering a ‘big picture’ of the phenomenon of remittances. The main questions answered here in this paper are: What factors shape remittances behavior in the U.S. and what specific policies by the U.S. government hinder/facilitate remittances? What factors make the U.S. the biggest sender of recipients and India the largest recipient of remittances? Also, how is the culture around remittances being shaped by recent changes in migration policy and attitudes towards migration, both in India and in the U.S.?
Chapter 8 deals with the remittances from Gulf nations to India. This remittance corridor is one of the most significant ones. The Gulf nations are oil rich but are facing a challenge that may alter the dynamics of migration (from South Asia) as well remittances. With changes in the economy and various strategic initiatives such as Vision 2030 in Saudi Arabia, we are likely to see a significant shift in labor demands in the years to come. Given how intimately migration is tied to remittances, any change in migration patterns is likely to impact remittances flow as well.
The 1960s and ’70s saw the rise of oil- and natural gas-rich Persian Gulf nations, which acted as magnets for migrant workers seeking employment. The phenomenon of the guest worker has boomed since the late 1970s. With this, we have also seen the rise of remittances to South and Southeast Asia, where a majority of migrant workers are from. However, with falling oil prices and shifts in geopolitical significance, we are witnessing a potential realignment of the remittances landscape.
We offer an up-to-date analysis of how the changing economy in states such as Qatar and the Kingdom of Saudi Arabia, with the ongoing political and economic upheavals, might impact the remittances landscape and what it might mean for the recipient states. It is also worthwhile to examine how their own economies might change. As the resource-rich Gulf nations shift their positioning in the global landscape from being a magnet for fortune seekers and seek to become hubs of innovation, we are interested in understanding how this shift may impact the millions of people working there. This specifically implies those who are the primary remittance senders. We also examine whether nation-states have a role to play in this phenomenon?
Chapter 9—“Remittances as Subaltern Giving: The Case of Mexico”— offers a theoretical perspective of remittances.
Given that much of the writing and discourse of remittances is conducted from a policy or government lens, we have argued in this paper that there is a need for looking at remittances as a ‘subaltern’ phenomenon. We frame remittances as ‘subaltern giving’ or giving by the poor and marginalized towards other marginalized populations. Even though remittances are typically given to an ‘in group,’ there are instances when it exhibits philanthropic characteristics such as addressing the ‘common good.’ We critically examine how remittances can be seen as a new form of solidarity among people who are marginalized.
This new perspective which moves beyond economic rationality and seeks to examine this behavior in terms of‘community of practice’ (Page, 2012) has not been explored and examined in much depth. We frame the theory of remittances as a theory of praxis and offer a mid-range theory, using a Grounded Theory approach.
We argue that this perspective of examining remittances dispels many stereotypes and brings greater clarity to why people send money to their relatives or friends in the country of their origins. With this theorizing, based on ‘mid-range theory’ principles, using data is helpful in understanding what exactly is going on in these situations.
Chapter 10, titled “Remittances as a ‘Soft Power’?: Examining the Power of Money-Flows Between Communities and Nation-States,” seeks to understand the impact of remittances on nation-states. Remittances are flows of money that migrants send to their country of origin, from their country of residence. This phenomenon often is examined with the individual as the unit of analysis. In this paper, we take a different point of view—examining the countries of sending and receiving as the units of analysis. The objective of this exercise is twofold—to turn the focus on nation-states and to use concepts such as diplomacy and soft power to examine whether this lens can be used to understand remittances and its manifestations as a tool of diplomacy.
Given the rise of nationalistic rhetoric such as ‘America first’ and the ‘Saudization’ policy, whereby expatriates are being replaced by local Saudi nationals, the idea of immigration itself has come under attack. We seek to understand how remittances play in this mix, and what impact— if any—they have, on the way that national policies are impacted, as a result of remittances. We use the theoretical contributions of Joseph Nye (2010) and other international relations theorists to understand these concepts.
Chapter 11 concludes the book and offers some insights into future research and some of the limitations of the book. We offer some ideas on how these ideas can be implemented.
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