NEXUS BETWEEN REMITTANCES, CORRUPTION AND POVERTY: A CASE OF PAKISTAN

Hira Mujahid, Afaq Ali Khan, Abdul Ghaffar

Abstract


Purpose: The study's primary objective is to explore the impact of remittances, corruption, and governance on the poverty of Pakistan. For this purpose, the study uses data period 1996-2019.

Methodology: The study applies the Autoregressive Distributed Lag (ARDL) approach for estimation. The error correction model (ECM) can be derived using a simple linear transformation that integrates short-term adjustments with long-run equilibrium without falling long-run association.

Findings: The results indicate that personal remittances, governance, and control of corruption have a significantly negative effect on poverty. The sign of a negative error correction term indicates that considered variables in the model have a long-run and stable relationship.

Implications: The results proposed that personal remittances, good governance, and corruption affect poverty. Therefore, the study recommends the policymakers encourage overseas Pakistanis to send their earnings to Pakistan through legal transfer. The government should strengthen the institutions to increase their effectiveness and control of corruption.


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References


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