Katerina Tertytchnaya et al. remittances,that is,the norms and ideas that migrants voter evaluations of economic performance:when eco- observe in their host country and transmit to family nomic performance is deemed to be good,incum- members in their country of origin,on individual level bents are rewarded and when economic performance political behavior and preferences (e.g.Levitt 2001) is deemed bad,incumbents are punished or sanctioned This work suggests that social remittances can lead (e.g.Kramer 1971;Fiorina 1981).This economic vot- to higher rates of non-electoral political participation ing model has more sophisticated variants:most no- and more critical evaluations of democracy (Perez- tably,competence models,which argue that voters go Armendariaz and Crow 2010).higher rates of politica beyond a reward-punishment calculus and instead seek activity and political interest (Cordova and Hiskey to select the most competent candidate,based on ex- 2015)and support for a more enhanced role for the pectations developed with the available economic data state(Meseguer,Lavezzolo,and Aparicio 2016). they have observed (e.g.Stigler 1973;for an overview, Less work studies the effect of financial remittances see Duch and Stevenson 2008,12-16).For this rea- on the political behavior and attitudes of those that son,economic voting comes with significant normative receive them.Given the scale of these transfers,in implications.It suggests that even in low-information some contexts they can be as large as the national environments with weak party systems,voters can as- median income,and given that they are generally un- sign responsibility for economic outcomes to the ac- taxed and go directly into the hands of the individ- tions of incumbents,thereby establishing a chain of uals that receive them,this would seem to be an democratic accountability(Stokes 2001).In fact,across oversight,particularly as we now know how important new democracies,evidence suggests that the economic 元 personal economic evaluations can be for electoral be- vote is prevalent from Latin America(Singer 2013)to havior (Kramer 1971:Fiorina 1981:Duch and Steven Africa (Posner and Simon 2002)to Eastern Europe son 2008).While Doyle (2015),Meseguer,Lavezzolo, (Roberts 2008). and Aparicio(2016)and Acevedo(2016)have exam- Voters however,are not always able to establish ined the effect of financial remittances on individual a coherent link between economic outcomes and in- attitudes towards taxation and the state,only three au- cumbent action.Existing research shows that in devel- thors have explicitly linked the receipt of financial re- oping democracies,support for incumbents is largely mittances with the economic vote. determined by economic and political developments In the first study of this kind,Germano (2010) abroad,such as commodity price shocks (e.g.Leigh demonstrated that remittance recipients in Mexican 2009;Monteiro and Ferraz 2012).Focusing on Latin municipalities,due to the transnational social safety net America for example,Campello and Zucco(2016)pro- effect of remittances,are less likely to identify the econ- vide evidence that voters misattribute responsibility omy as a pressing problem relative to non-recipients for economic outcomes to incumbents.They develop and to have fewer economic grievances.Consequently, a 'Good Economic Times'index based on commodity the more positive egocentric and sociotropic outlook prices and US interest rates,which are exogenous to the of remittance recipients means that they are less likely control of Latin American governments.They demon- to oppose incumbent politicians (e.g.Germano 2013) strate that this index can help explain the re-election In a similar vein,Bravo(2012)has demonstrated that of incumbents and presidential popularity.When times in Latin American countries,financial remittances pos- are good,incumbents are rewarded and when times are itively influence presidential approval amongst recip- bad,incumbents are punished. ients and that this effect operates through more fa- In many respects,remittances are an even better test vorable egocentric and sociotropic evaluations of the of attribution in economic voting.Remittances are the economic situation.Ahmed (2017),again for a Latin "epitome of private transfers"(Bravo 2012,6).They American sample,has demonstrated that at high lev- go straight into the hands of the individuals that re- els of dissatisfaction with the incumbent,a remittance ceive them,often get transferred outside of formal recipient is more likely to vote for that incumbent,rela- bank channels,and for many countries in the world, tive to a non-recipient.What is particularly interesting lie largely outside of the incumbent's control.For this about these studies is the fact that,as Bravo(2012)has reason,existing work considers remittances as an excel- suggested,remittances are an exogenous capital flow lent identification strategy to test whether voters hold over which the incumbent government,in most situa- incumbents accountable for events beyond their con- tions,has little control.In this work,remittances appear trol (Bravo 2012).While it is possible for governments to be operating through a mechanism consistent with to control the inflow of remittances,mainly through pocketbook voting effects.It is from these studies that some form of tax on remitted income,or schemes to we take our cue. encourage migrants to remit more,or through manipu- lation of the official exchange rate (e.g.O'Neill 2001) Remittances and Economic Voting the regulation of remittances does not come cheap. One of the largest bodies of work in political science L is concerned with the importance of the economic Examples of taxes on remittances include a five percent tax on re- vote.Beginning with Downs'(1957)classic assertion mittances in Vietnam (which was removed in 1997),a state cross- that individuals will choose parties to best maximize border tax on remittances in Tajikistan(removed in 2003),an over- seas document stamp tax in the Philippines (removed for work their personal utility,work in this vein has demon- ers in 1995)and the tax that the Indian government levies on fees strated that support for the incumbent is based on from money transfer agents,but not on actual remittance flows(e.g. 760Katerina Tertytchnaya et al. remittances, that is, the norms and ideas that migrants observe in their host country and transmit to family members in their country of origin, on individual level political behavior and preferences (e.g. Levitt 2001). This work suggests that social remittances can lead to higher rates of non-electoral political participation and more critical evaluations of democracy (Pérez￾Armendáriaz and Crow 2010), higher rates of political activity and political interest (Córdova and Hiskey 2015) and support for a more enhanced role for the state (Meseguer, Lavezzolo, and Aparicio 2016). Less work studies the effect of financial remittances on the political behavior and attitudes of those that receive them. Given the scale of these transfers, in some contexts they can be as large as the national median income, and given that they are generally un￾taxed and go directly into the hands of the individ￾uals that receive them, this would seem to be an oversight, particularly as we now know how important personal economic evaluations can be for electoral be￾havior (Kramer 1971; Fiorina 1981; Duch and Steven￾son 2008). While Doyle (2015), Meseguer, Lavezzolo, and Aparicio (2016) and Acevedo (2016) have exam￾ined the effect of financial remittances on individual attitudes towards taxation and the state, only three au￾thors have explicitly linked the receipt of financial re￾mittances with the economic vote. In the first study of this kind, Germano (2010) demonstrated that remittance recipients in Mexican municipalities, due to the transnational social safety net effect of remittances, are less likely to identify the econ￾omy as a pressing problem relative to non-recipients and to have fewer economic grievances. Consequently, the more positive egocentric and sociotropic outlook of remittance recipients means that they are less likely to oppose incumbent politicians (e.g. Germano 2013). In a similar vein, Bravo (2012) has demonstrated that in Latin American countries, financial remittances pos￾itively influence presidential approval amongst recip￾ients and that this effect operates through more fa￾vorable egocentric and sociotropic evaluations of the economic situation. Ahmed (2017), again for a Latin American sample, has demonstrated that at high lev￾els of dissatisfaction with the incumbent, a remittance recipient is more likely to vote for that incumbent, rela￾tive to a non-recipient. What is particularly interesting about these studies is the fact that, as Bravo (2012) has suggested, remittances are an exogenous capital flow, over which the incumbent government, in most situa￾tions, has little control. In this work, remittances appear to be operating through a mechanism consistent with pocketbook voting effects. It is from these studies that we take our cue. Remittances and Economic Voting One of the largest bodies of work in political science is concerned with the importance of the economic vote. Beginning with Downs’ (1957) classic assertion that individuals will choose parties to best maximize their personal utility, work in this vein has demon￾strated that support for the incumbent is based on voter evaluations of economic performance: when eco￾nomic performance is deemed to be good, incum￾bents are rewarded and when economic performance is deemed bad, incumbents are punished or sanctioned (e.g. Kramer 1971; Fiorina 1981). This economic vot￾ing model has more sophisticated variants; most no￾tably, competence models, which argue that voters go beyond a reward-punishment calculus and instead seek to select the most competent candidate, based on ex￾pectations developed with the available economic data they have observed (e.g. Stigler 1973; for an overview, see Duch and Stevenson 2008, 12–16). For this rea￾son, economic voting comes with significant normative implications. It suggests that even in low-information environments with weak party systems, voters can as￾sign responsibility for economic outcomes to the ac￾tions of incumbents, thereby establishing a chain of democratic accountability (Stokes 2001). In fact, across new democracies, evidence suggests that the economic vote is prevalent from Latin America (Singer 2013) to Africa (Posner and Simon 2002) to Eastern Europe (Roberts 2008). Voters however, are not always able to establish a coherent link between economic outcomes and in￾cumbent action. Existing research shows that in devel￾oping democracies, support for incumbents is largely determined by economic and political developments abroad, such as commodity price shocks (e.g. Leigh 2009; Monteiro and Ferraz 2012). Focusing on Latin America for example, Campello and Zucco (2016) pro￾vide evidence that voters misattribute responsibility for economic outcomes to incumbents. They develop a ‘Good Economic Times’ index based on commodity prices and US interest rates,which are exogenous to the control of Latin American governments. They demon￾strate that this index can help explain the re-election of incumbents and presidential popularity.When times are good, incumbents are rewarded and when times are bad, incumbents are punished. In many respects, remittances are an even better test of attribution in economic voting. Remittances are the “epitome of private transfers” (Bravo 2012, 6). They go straight into the hands of the individuals that re￾ceive them, often get transferred outside of formal bank channels, and for many countries in the world, lie largely outside of the incumbent’s control. For this reason, existing work considers remittances as an excel￾lent identification strategy to test whether voters hold incumbents accountable for events beyond their con￾trol (Bravo 2012). While it is possible for governments to control the inflow of remittances, mainly through some form of tax on remitted income, or schemes to encourage migrants to remit more, or through manipu￾lation of the official exchange rate (e.g. O’Neill 2001), the regulation of remittances does not come cheap.1 1 Examples of taxes on remittances include a five percent tax on re￾mittances in Vietnam (which was removed in 1997), a state cross￾border tax on remittances in Tajikistan (removed in 2003), an over￾seas document stamp tax in the Philippines (removed for work￾ers in 1995) and the tax that the Indian government levies on fees from money transfer agents, but not on actual remittance flows (e.g. 760 Downloaded from https://www.cambridge.org/core. Shanghai JiaoTong University, on 26 Oct 2018 at 03:53:04, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/S0003055418000485