Remittances and FDI as Privately Provided International Aid
Nicoara O., Burns S.A. (2019) Remittances and FDI As Privately Provided International Aid. In: Dutta N., Williamson C. (eds) Lessons on Foreign Aid and Economic Development. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-22121-8_12
37 Pages Posted: 7 Nov 2020
Date Written: December 1, 2018
This article elaborates on the role of personal remittances and Foreign Direct Investment (FDI) as the forms of international private aid most compatible with sustainable economic growth and development. We argue that remittances and FDIs are not only the most prevalent forms of private aid, but also the most effective forms for improving standards of living, market complexity, and the institutional prospects in poor nations. Globalization has led to increased flows of remittances and FDI from developed to developing economies. The increased flow of funds across borders helped stimulate the emergence of alternative payment technologies and microfinance institutions. These private initiatives are better suited to address the specific needs of local communities than foreign aid and other top-downstate-led measures. We also argue that remittances may positively interact with the existing policies and economic and political institutions in the recipient nations over time.
Keywords: Foreign Aid; Private Aid; Remittances; Foreign Direct Investment; Globalization; Institutions; Entrepreneurship
JEL Classification: F24, F35, F63, G2, J6, L26
Suggested Citation: Suggested Citation