INTRODUCTION: REMITTANCE FLOWS AND PRACTICES DURING THE CRISIS
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international migration. Massey and Taylor (2004: 157) argue that “the vast majority of research on migrant remittances and savings ignores their indirect effects on migrantsending economies. As a result, many studies paint a negative picture of remittances and savings for development.” According to their assessment, the problem lies in the fact that many studies fail to recognize the effects of nonremittance income and the link between migrants and nonmigrants. Remittances remain one of the less volatile sources of foreign exchange earnings for developing countries. The literature has indicated for some time that migrant remittances tend to be stable or even countercyclical in response to economic hardship— be it a financial crisis, natural disaster, or political conflict—in a remittance-recipient country (Ratha 2003; World Bank 2006a). This time the crisis began in the United States and Europe, remittance-source countries. Some early literature (for example, Swamy 1981) argued that source country factors are a major determinant of remittance flows. The economic crisis in a major migrant destination country was expected to adversely affect migrants’ income and employment opportunities and hence the willingness and ability of migrants to stay in their host countries and continue to remit funds. To an extent, this expectation was realized as remittance flows registered a decline in 2009 for the first time in recent memory. Nevertheless, it was also remarkable that remittance flows to developing countries fell only 5.2 percent in 2009, proving to be significantly more resilient than private capital flows, which declined precipitously (Ratha and Sirkeci 2010: 126). Remittance receipts at the global level significantly exceed the aid from advanced economies to developing countries. The debate over the impact of remittances on social and economic inequalities is ongoing. Although some observers argue that remittance patterns are dependent on the motivations that drive migration (these are not economic in all cases), others argue that remittances reduce poverty. Seddon, Adhikari, and Gurung (2002) argue that redressing inequalities is beyond the concern of migrant remittances. An abundance of evidence is provided by a multitude of studies that confidently argue that remittances are often used for household maintenance and for purchase of consumer goods. Remittances are particularly important for dependent members of households left behind. Orozco (2006), for example, argues that remittances are means to ensure social protection as well as capital accumulation (see also Cohen and Rodriguez 2005). Eckstein (2010) argues that remittances are linked to transnational family social capital and are building blocks for the reproduction of social networks and connections. Evidence is also found that migrant remittances are used to support local community projects and events (Cohen 2004). A separate literature focusing on the role of remittances in relation to conflicts and disasters has also grown in recent years (Fagen and Bump 2006; Justino and Shemyakina 2010; Mohapatra, Joseph, and Ratha forthcoming). Many of these studies focus on natural disasters such as the earthquake in Pakistan or tsunamis in the Pacific; others look at the implications of conflicts in African countries. In these examples, remittances appear as insurance for households as they cope with the shocks of conflict (Davies 2007). Fagen and