In this study we analyzed a dynamic cross-country panel dataset on 31 sampled developing countries involving 16 Latin America and the Caribbean and 15 Sub-Sahara African countries within the framework of Blundell-Bond Generalized Method of Moments (GMM). Present results show that generally the impact of remittance inflows on overall development differ across regions. Specifically, the study reveals that the positive role of international remittances in the development process of underdeveloped economies is more pronounced in Sub-Saharan Africa than in Latin America and the Caribbean sub-region where remittances actually retard socioeconomic development prospects. It would, therefore, be politically imprudent and economically suicidal, to over-depend on international remittances as the panacea for the underdevelopment of Sub-Saharan Africa, Latin America and the Caribbean. The contribution of this study is unique because it has examined the long-run impact of international remittances on overall socioeconomic development which takes into account real per capita income, income disparity and other socioeconomic equity factors incorporated into the construction of Human Development Index.
Deodat E. Adenutsi and C. R.K. Ahortor, 2010. International Remittances-The Panacea for Underdevelopment? A Comparative Panel Data Analysis of Sub-Sahara Africa and Latin America. Journal of Applied Sciences, 10: 235-247.