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IBRAHIM SIRKECI, JEFFREY H. COHEN, AND DILIP RATHA
The factors affecting remittance flows include the economic opportunities in the destination countries, development and growth trends in both sending and destination countries, influence of the crisis on migrants and their well-being, migrants’ attitudes toward consumption, cultural characteristics, migration experiences, currency fluctuations, and so on. Macroapproaches are largely interested in variation in national outcomes (Adams 2003; Glytsos 2002; Taylor and others 1996b), whereas microapproaches are interested in local effects (Binford 2003; Durand and others 1996; Massey and others 1994; Reichert 1981; Taylor and others 1996a). It is argued that microlevel interdisciplinary approaches with a household focus can offer an alternative view of remittance outcomes (Cohen 2005). In this introduction we tend to stick with macroapproaches and leave the examples to our contributors. However, it is important to understand that microprocesses shape the geography and outcomes of remittances at different levels (individual, household, community, regional, national, and global). Remittances, like migration, do not occur in a vacuum. They link migrants and nonmigrants as well as the destination and the origin in many ways that go beyond dependency or development. Remittance flows are expected to respond to changes in migration practices. Some relatively recent scholarship argues that transnational migration can facilitate longterm remittance flows (Levitt 2000), whereas other scholars argue that remittances decline as migration matures (Stark 1978). Our question here is how crises—the recent financial crisis in particular—influence remittance flows. Although many studies focus on the influence of remittances on overall accounts, as Massey and others (1998, 2006) have argued, the direct effects of remittances on sending communities are important (also see Cohen 2010). Finally, cash-strapped governments in remittance-receiving countries may have fiscal stimulus packages to ensure the maintenance of remittance flows (World Bank 2009f ). While the effects of remittances on outcomes can be direct for the sending household, wider indirect effects are seen for the sending communities, regions, and countries. This effect is felt through increasing consumption and household spending, but also via investments—albeit the small portions of remittances that are used for this purpose. It is equally important to see that remittances stimulate nonremittance income increases as well as investments. The impact of remittances on nonmigrant households via expenditure linkages indicates that during crises, sending households become more reliant on remittances (for Mexican examples, see Massey and Taylor 2004). These indirect effects alleviate or at least mediate the impact of the financial crisis even as that crisis reaches well beyond the migrant-sending household. Remittances also proved to be relatively resilient in comparison to private capital flows, and so many remittance-dependent countries became even more dependent on remittance inflows for meeting external financing needs. Indeed, many countries (such as Bangladesh and the Philippines) that obtained new sovereign ratings (with a view to raising bond financing from international markets) benefited from the fact that they had access to a large and relatively stable flow of remittances.