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What causes developing countries to receive different levels of international remittances? This paper addresses this question by using new data on such variables as the skill composition of migrants, poverty, and interest and exchange rates to examine the determinants of remittances. The paper finds that the skill composition of migrants does matter in remittance determination. Countries which export a larger share of high-skilled (educated) migrants receive less per capita remittances than countries which export a larger proportion of low-skilled migrants. It also finds that the level of poverty in a labor-sending country does not have a positive impact on the level of remittances received.

Debt Markets --- Developing Countries --- Finance and Financial Sector Development --- Health, Nutrition and Population --- Level of poverty --- Macroeconomics and Economic Growth --- Migrant --- Migrants --- Migration --- Policy Research --- Policy Research Working Paper --- Population Policies --- Progress --- Remittance --- Remittances

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This paper examines the economic impact of international remittances on countries and households in the developing world. To analyze the country-level impact of remittances, the paper estimates an econometric model based on a new data set of 115 developing countries. Results suggest that countries located close to a major remittance-sending region (like the United States, OECD-Europe) are more likely to receive international remittances, and that while the level of poverty in a country has no statistical effect on the amount of remittances received, for those countries which are fortunate enough to receive remittances, these resource flows do tend to reduce the level and depth of poverty. At the household level, a review of findings from recent research suggest that households receiving international remittances spend less at the margin on consumption goods-like food-and more on investment goods-like education and housing. Households receiving international remittances also tend to invest more in entrepreneurial activities.

Citizens --- Debt Markets --- Developing Countries --- Finance and Financial Sector Development --- Global Development --- Global Development Finance --- Health, Nutrition and Population --- Household Income --- Household Level --- International Migrants --- International Migration --- Level of Poverty --- Macroeconomics and Economic Growth --- Migrant --- Migrant Workers --- Migrants --- Policy --- Policy Research --- Policy Research Working Paper --- Population Policies --- Progress --- Remittance --- Remittances --- Resource Flows --- World Population

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In the efficient allocation of aid, aid is targeted disproportionately to countries with severe poverty and adequate policies. For a given level of poverty, aid tapers in with policy reform. In the actual allocation of aid, aid tapers out with reform. Aid now lifts about 30 million people a year out of absolute poverty. With a poverty-efficient allocation, the same amount of aid would lift about 80 million people out of poverty. Collier and Dollar derive a poverty-efficient allocation of aid and compare it with actual aid allocations. They build the poverty-efficient allocation in two stages. First they use new World Bank ratings of 20 different aspects of national policy to establish the current relationship between aid, policies, and growth. Onto that, they add a mapping from growth to poverty reduction, which reflects the level and distribution of income. They compare the effects of using headcount and poverty-gap measures of poverty. They find the actual allocation of aid to be radically different from the poverty-efficient allocation. In the efficient allocation, for a given level of poverty, aid tapers in with policy reform. In the actual allocation, aid tapers out with reform. In the efficient allocation, aid is targeted disproportionately to countries with severe poverty and adequate policies - the type of country where 74 percent of the world's poor live. In the actual allocation, such countries receive a much smaller share of aid (56 percent) than their share of the world's poor. With the present allocation, aid is effective in sustainably lifting about 30 million people a year out of absolute poverty. With a poverty-efficient allocation, this would increase to about 80 million people. Even with political constraints introduced to keep allocations for India and China constant, poverty reduction would increase to about 60 million. Reallocating aid is politically difficult, but it may be considerably less difficult than quadrupling aid budgets, which is what the authors estimate would be necessary to achieve the same impact on poverty reduction with existing aid allocations. This paper - a joint product of the Office of the Director, and Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to examine aid effectiveness. The authors may be contacted at pcollier@worldbank.org or ddollar@worldbank.org.

Development Efforts --- Domestic Poverty --- Economic Growth --- Elimination Of Poverty --- Emergencies --- Health, Nutrition and Population --- Level Of Poverty --- Living Standards --- National Policy --- Policies --- Policy Level --- Poor People --- Population Policies --- Poverty --- Poverty Reduction --- Pro-Poor Growth --- Quantitative Measures --- Recipient Countries --- Respect --- Rule Of Law --- Rural Development --- Rural Poverty Reduction --- Sectoral Policies --- Services and Transfers to Poor --- Sustainable Growth --- War

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May 2000 - Existing methods for assessing latent country or institutional performance can yield deceptive results. There have been many attempts to infer latent performance attributes of governments (or other institutions) from conditional comparisons that control for observed variables. Success in doing so could greatly improve government performance. Ravallion critically reviews the econometric foundations of the methods used. He argues that latent heterogeneity remains a fundamental but unresolved problem. Locating a benchmark for measuring performance adds a further problem. Current methods do not yield a consistent estimate of even the mean latent performance attribute. An assessment of country performance by these methods could well be wildly wrong. This paper - a product of Poverty and Human Resources, Development Research Group - is part of a larger effort in the group to assess and improve methods for monitoring and assessing country performance. The study was funded by the Bank's Research Support Budget under the research project Policies for Poor Areas (RPO 681-39). The author may be contacted at mravallion@worldbank.org.

Crime and Society --- Developing Countries --- Development Assistance --- Development Policy --- Dissemination --- Finance and Financial Sector Development --- Financial Literacy --- Health Care --- Health Systems Development and Reform --- Health, Nutrition and Population --- Household Income --- Human Development --- Income Inequality --- Inequality --- Infant --- Infant Mortality --- Knowledge --- Level Of Poverty --- Life Expectancy --- Policy Discussions --- Policy Implications --- Population --- Population Policies --- Poverty --- Poverty Reduction --- Practitioners --- Pro-Poor Growth --- Services and Transfers to Poor --- Social Development --- Social Policies --- Social Services