Formalizing the Informal or Informalizing the Formal? Integrating Remittance Systems for Post-Conflict Development

Posted: 14 Apr 2013  

John R. Harris

Boston University

Daivi Rodima-Taylor

Boston University

Date Written: April 14, 2013

Abstract

Remittance flows in fragile post-conflict environments are primarily transferred through informal channels and draw upon existing social institutions and solidarity networks. The informality of post-conflict remittance transfers poses challenges to their integration into rehabilitation and development efforts. Populations in conflict-affected countries are limited in their access to financial services due to the lack of legal frameworks and payment infrastructures. Attempts to capture informal remittances by formalizing their delivery systems have therefore not had much success in this context. This draws attention to the need for a broader approach to post-conflict remittance systems and the possibility of their institutional integration. Contemporary informal remittance systems form increasingly complex global financial networks that are still very poorly understood. The paper examines the modern informal remittance sectors in Somalia, Liberia and Sierra Leone with their social embeddedness and global connections, exploring the contributions and challenges of informal remittances to post-conflict development. The conflict-induced remittance systems in these countries have proven to be highly entrepreneurial in character, encouraging local adaptations that facilitate linkages between multilevel financial institutions. The paper suggests a broader approach to remittance institutions in Africa that accounts for local adaptive potentials and wider institutional connectivities in the era of growing displacement and expanding transnational remittance flows.

Suggested Citation

Harris, John R. and Rodima-Taylor, Daivi, Formalizing the Informal or Informalizing the Formal? Integrating Remittance Systems for Post-Conflict Development (April 14, 2013). Available at SSRN: https://ssrn.com/abstract=2250739

John R. Harris (Contact Author)

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Daivi Rodima-Taylor

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

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