No Easy Solution: A Smorgasbord of Factors Drive Remittance Costs

July 30, 2021

Preview Citation

Format: Chicago

Tito Nícias Teixeira da Silva Filho. No Easy Solution: A Smorgasbord of Factors Drive Remittance Costs, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

There has been a global push to decrease the cost of remittances since at least 2009, which has culminated with its inclusion in the Sustainable Development Goals in 2015. Despite this effort and the emergence of new business models, remittance costs have been decreasing very slowly, disproving predictions that sharp declines would be just around the corner. In addition, remitting to poorer countries remains very expensive. Oddly, this situation has not been able to elicit academic interest on the drivers of remittance costs. This paper delved deeply into the remittances ecosystem and found a very complex, heterogenous and unequal environment, one in which costs are driven by a myriad of factors and where there are no easy and quick solutions available, which explains the disappointing outcome so far. Nonetheless, it also shows that while policymakers have limited room to act they still have a very important role to play.

Subject: Balance of payments, Medium taxpayer office, Remittances, Revenue administration

Keywords: Central America, Factors drive remittance, Global, Medium taxpayer office, North America, Receiving country, Remittance cost, Remittance price, Remittances, Remittances ecosystem

Publication Details

Pages:

62
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/199
Stock No:

WPIEA2021199
ISBN:

9781513592954
ISSN:

1018-5941

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