The Impacts of International Remittances on Economic Growth and Human Development of Haiti

Abstract

Haiti is a member of the Caribbean Community (CARICOM). According to the World Bank, Haiti is a low income country. The international remittance is the most important source of foreign earning of Haiti. The statistics from the World Bank in 2017 revealed that Haiti was the 4th country as a recipient of the remittances of the world. The remittance inflow accounted for 29 per cent of its GDP. Although, the international remittance is the most important source of foreign income in Haiti, its contribution to economic development has not been rigorously analyzed. Consequently, this study examines the impact of remittance on economic growth of Haiti using time-series data model over the period from 1970 to 2017. The empirical results from the autoregressive distributed lag (ARDL) model indicate the negative impact of remittance on economic growth. This finding is confirmed by the result from the Toda-Yamamoto Granger non-causality analysis. However, our findings show that the remittance contributes to the people’s wellbeing, which is represented by the Human Development Index (HDI).