Topic 9

Remittances and Migrant Associations

A relatively understudied issue within the remittance literature is the role of migrant associations.  One class of migrant associations that have received some attention is hometown associations (HTAs), which are formed by migrants from a specific region or town in the country of origin.  HTAs can facilitate the flow of collective remittances, the transfers that migrants and migrant organizations send to the origin country to benefit a specific group or community. Unlike family transfers, collective remittances tend to be targeted towards infrastructural and community-development projects as well as social purposes in the community of origin. Although collective remittances often represent a smaller share of overall remittances, they may have a significant impact in resource-poor communities of origin, with potentially large multiplier effects on the local economy.

Recent studies of migrants’ associations including HTAs, professional associations, and cultural groups, have been largely descriptive.  Levitt and Jaworksy (2005) outline several methodological challenges associated with studying migrant associations and collective remittances. Orozco and Rouse (2007) report that the percentage of remittance-sending migrants who belong to HTAs varies by country of origin group. For example, on average, only about 9 percent of remittance senders in the United States of Latin American origin belong to an HTA.  However, this fraction may be higher for other migrant groups and sending areas.   The extent of migrant participation in an HTA may depend on several factors including the dispersion of sending area migrants within the destination community.

A new strand of literature traces the evolution of HTAs as development agents in origin communities (Goldring, 2002: Orozco, 2005).  Origin country governments have increasingly shown interest in establishing partnerships with migrant associations.  Beginning in the 1990s, the Mexican government developed outreach policies targeted at Mexican migrants to the US, providing support for the formation of hometown associations (HTAs), as well as promoting the flow of remittances to communities of origin (Orozco, 2005). Specifically, local and municipal governments in Mexico have developed matching fund programs to encourage the flow of collective remittances.  In many cases, the government has combined collective remittances with government funds and expertise, and in some cases they have used private-sector contributions to finance infrastructure projects. Mexican state governments have also experimented with involving HTAs in private-sector investment opportunities.

Can migrant associations promote economic development in sending communities?  The evidence tends to be mixed (Alarcón, 2002). Fox and Bada (2008), summarizing much literature on Mexico, note that contextual factors such as the development potential of the community, and the degree of cooperation between the HTA, the local government, and the community at large (including non-migrants), can determine the effectiveness of collective remittances in stimulating economic development. In addition, Paul and Gamage (2004) discuss some limitations of HTAs in sending collective remittances using descriptive evidence from the US and El Salvador.  The lessons from their case study suggest that policy interventions that aim to increase the flow of collective remittances and to promote migrant associations and their commitment to development objectives may need to overcome organizational capacity and governance challenges in host and origin communities.  However, an important question is how to promote the impacts of HTAs and which specific policies (for example, through consulates in sending regions) can lower the transaction costs and facilitate information flows toward HTA development.

 

Topic 9 – Articles

Alarcón, Rafael. 2002. The Development of Home Town Associations in the United States and the Use of Social Remittances in Mexico. In Sending Money Home: Hispanic Remittances and Community Development, edited by R. O. de la Garza and B. L. Lowell. Lanham, MD: Rowman & Littlefield.

This paper examines the development of Mexican Hometown Associations (HTAs) in the United States and the use of their social remittances in Mexico. Money remittances sent by individuals, households, and HTAs may serve as an indirect engine of regional economic development and also function as a substitute for the lack of government welfare in Mexico.  The paper discusses the factors that led to the formation of HTAs as well as the uses of the collective remittances in Mexico by HTAs including the funding of public infrastructure, the financing of education and health infrastructure and social goods such as churches or buildings.  However, expenditures on projects that have the potential to create sustainable employment appear to be less prevalent.  Finally, the paper concludes with the suggestion that greater government involvement in welfare would free up some remittance funds for investment with productive implications and that governments and NGOs can play an important role in fostering the expenditure of collective remittances on employment creation ventures.

Fox, Jonathan, and Xochitl Bada.  2008. Migrant Organization and Hometown Impacts in Rural Mexico. Journal of Agrarian Change, 8 (2-3): 435–461. (Accessible via eScholarship)

This article presents a more cautious perspective on hometown associations. The authors pose a potential connection between collective remittances and community development, but one that is mediated by relationships between the different actors and the nature of the migrant community itself. They acknowledge that HTAs based in the USA may promote democratization of decision-making by throwing their support behind ongoing projects organized by stay-at-home community members, and by placing pressures on local governments for accountability and voice. However, just as frequently there are conflicts on how collective remittances should be spent: between migrants and non-migrants, between villages and the county seat, between the local government and the migrant association, and between what the town really needs and what elite actors want. Another issue altogether is that expenditures on “public goods” (e.g., sports fields, town plazas, or medical clinics) generally have less effect on community development than directly productive investments by households, such as in agriculture or family businesses. These productive investments, unfortunately, are relatively unpopular with HTAs and local governments alike because they are perceived as having disproportionate impacts on a small subset of the community. Finally, the authors find that some communities without a development track record or viable economic prospects may not respond to HTA investments at all.

Levitt, Peggy, and B. Nadya Jaworsky. 2007. Transnational Migration Studies: Past Developments and Future Trends. Annual Review of Sociology 33 (1):129.

This paper provides an overview of current research and future trends on transnational migration. Most scholars now recognize that many contemporary migrants and their predecessors maintain various kinds of ties to their homelands at the same time that they are incorporated into the countries that receive them. Transnational migration studies has emerged as an inherently interdisciplinary field. In this review, the authors provide a short history of theoretical developments, outlining the different ways in which scholars have defined and approached transnational migration. They also summarize what is known about migrant transnationalism in different arenas—economics, politics, the social, the cultural, and the religious. Finally, we discuss methodological implications for the study of international migration, present promising new scholarship, and highlight future research directions.

Goldring, Luin. 2004. Family and Collective Remittances to Mexico: A Multi-Dimensional Typology of Remittances. Development and Change 35:  799–840. (Publisher Link)

The development potential of remittances has gained significant attention due to dramatic increases in migration and amounts of money ‘sent home’, and also due to the growing interest and involvement by states and non-state actors in gaining leverage over remittances. The trend is indicative of an emerging remittance-based component of development and poverty reduction planning. This article uses the case of Mexico to make two broad arguments, one related to the importance of extra-economic dimensions of remittances, particularly the social and political meanings of remittances, and the other based on a disaggregation of remittances into family, collective or community-based, and investment remittances. Key dimensions of this typology include the constellation of remitters, receivers, and mediating institutions; the norms and logic(s) that regulate remittances; the uses of remittances (income versus savings); the social and political meanings of remittances; and the implications of such meanings for various interventions. The author concludes that policy and programme interventions need to recognize the specificity of each remittance type. Existing initiatives to bank the un-banked and reduce transfer costs, for example, are effective for family remittances, but attempts to expand the share of remittances allocated to savings, or to turn community donations into profitable ventures, or small investments into large businesses, are much more complex and require a range of other interventions.

Levitt, Peggy, and B. Nadya Jaworsky. 2007. Transnational Migration Studies: Past Developments and Future Trends. Annual Review of Sociology 33 (1): 129-156.

This paper provides an overview of current research and future trends on transnational migration. Most scholars now recognize that many contemporary migrants and their predecessors maintain various kinds of ties to their homelands at the same time that they are incorporated into the countries that receive them. Transnational migration studies has emerged as an inherently interdisciplinary field. In this review, the authors provide a short history of theoretical developments, outlining the different ways in which scholars have defined and approached transnational migration. They also summarize what is known about migrant transnationalism in different arenas—economics, politics, the social, the cultural, and the religious. Finally, they discuss methodological implications for the study of international migration, present promising new scholarship, and highlight future research directions.

Orozco, Manuel, and Katherine Welle. 2006. Hometown Associations and Development: Ownership, Correspondence, Sustainability and Replicability. In New Patterns for Mexico: Observations on Remittances, Philanthropic Giving, and Equitable Development, edited by B. J. Merz. Cambridge, MA: Global Equity Initiative, Harvard University.

This paper surveys what role that hometown associations are playing in transnational development, using evidence from Mexico.   The authors develop four criteria—ownership, correspondence, sustainability, and replicability—to study the role of hometown associations in development and they apply these criteria to their field research on Mexican HTA projects operating in rural communities within the municipality of Jerez, Zacatecas. The authors focus on Zacatecas because it is the Mexican state with the highest levels of migration and hometown association activity. The formation in the United States of several umbrella federations representing Zacatecan HTAs has facilitated a strong collaboration with the Mexican government through matching-grant programs to improve hometowns. However, the authors conclude that the influence of hometown associations in Zacatecas may be limited. To exert a greater positive effect, HTAs may require improved contact with community stakeholders in order to learn about development priorities.

Paul, Alison, and Sarah Gammage. 2005. Hometown Associations and Development: The Case of El Salvador. In Destination, D.C. Working Paper No. 3. Washington, DC: Women’s Studies Department, George Washington University and Center for Women and Work, Rutgers, The State University of New Jersey.

This paper explores the formation of HTAs and examines the factors that led to their emergence as possible actors in development in origin communities drawing upon work with five Salvadoran HTAs in the Greater Washington, DC area.   The paper studies how these organizations have engaged the interest of development agencies and practitioners and outlines their strengths and weaknesses as new actors in the private-public sphere.  The field research was undertaken between July 2003 and December 2004 and the authors conducted interviews with members of HTAs, participated in meetings, visited home town communities, and collected data on migration and remittance practices from 120 Salvadoran residents in Greater Washington, DC. The paper provides a brief case study of El Salvador’s experience with migration and HTAs, and concludes with some recommendations for further research and best practices for encouraging HTAs’ active and effective engagement in the development process.