Katerina Tertytchnaya et al. 26 countries in Central Eastern Europe.the Caucasus bents.but such effects could also dampen incumbent and Central Asia,drawn from the 2006 wave of the incentives to invest in welfare provisions(Doyle 2015) LiTS2(summary statistics are provided in Section A.2 and encourage governments to divert income into of the Supporting Information (SI)).With a simple di- patronage instead(Ahmed 2012).Declines in remit- chotomous measure of whether a respondent receives tances,caused by downturns in economies abroad,may remittances or not,two-level multilevel models pre- exacerbate economic grievances among the electorate sented in Table 1.demonstrate that,similar to Bravo's and lead to poor evaluations of the incumbent for (2012)results,financial remittances increase satisfac- events not necessarily under their control.In some tion with household (Model 1)and national (Model senses then,the flow of remittances to the developing 2)economic conditions.The effect of remittances on world would appear to be a political manifestation of trust towards the country's president in Model 3 is also economic dependency (e.g.Wibbels 2006). positive,and statistically significant.The effect of re- Moreover,while we agree with Bravo (2012)that mittances on political evaluations in Model 4 remains remittances are an excellent identification strategy to robust,even after we control for economic satisfaction test how individuals attribute responsibility for shocks at the household,and national level (for more infor- to their income and economic security,we think we mation see page 13 of the SI).Yet,what happens when can go one step further.Bravo(2012)argues that the remittance inflows change? bias introduced by unobserved household and individ- ual heterogeneity is likely to bias results downwards, given that those who migrate are most likely to come 元 CHANGES IN REMITTANCES AND INCUMBENT APPROVAL from households with more negative evaluations of the incumbent and status quo.3 Our panel data allows us to Remittances do not always reach recipient households overcome some of the potential sources of bias by em- at the same time and in the same amount,and changes ploying a within-subject design.By limiting our anal- in the frequency and value of remittances will affect ysis to remittance recipients alone,we are also able to the livelihood of households in developing economies address concerns regarding the unobserved differences across the world.During periods of economic contrac- between households that receive remittances and those tion in migrant host economies,remittance payments that do not. are likely to fall due to changing migration flows,cur- rency depreciation,or efforts by migrants to cut costs BACKGROUND AND CASE SELECTION (Mohapatra and Ratha 2010).In the midst of the global financial crisis for example,the World Bank estimated In the ensuing sections,we provide a detailed test of that remittance flows to developing countries declined whether and how fluctuations in remitted income af- by 6 percent between 2008 and 2009.What are the po- fect political attitudes.We first illustrate our argument litical effects of changes in remittance flows? with the case of Kyrgyzstan.Leveraging a unique four- We argue that recipients who experience a decline in wave panel study of Kyrgyz citizens between 2010- remittances become less satisfied with their economic 2013,the LiK surveys,we are able to carefully iden- situation,thereby undermining their support for the tify how changes in remittances affect variation inin- incumbent.Conversely,when remittances increase, cumbent approval.In a second step,we turn to cross- 5.5010 the economic evaluations of recipients will improve, sectional survey data from Central Eastern Europe,the resulting in an increase in incumbent support.In other Caucasus and Central Asia,collected in the aftermath words,remittance recipients are rewarding or punish- of the Great Recession in 2008-2010.Specifically,we ing incumbents for economic developments in migrant rely on the 2010 LiTS that includes survey data for 28 receiving economies that are largely outside of the countries in the region.4 control of politicians at home.While this may be a type Central Eastern Europe,Central Asia,and the Cau- of pocketbook voting,it also represents a form of mis casus provide a useful context for exploring how fluctu- attribution with normative implications for democratic ations in financial remittances affect political attitudes. accountability in remittance dependent states.Punish- For many of the countries in the region,remittances are ing or rewarding incumbents for events outside their one of the most important sources of external financ- control may distort the economic vote as an instrument ing after foreign direct investment.In the mid-2000s of accountability as it will undermine the direct link for example,financial remittances were equivalent to between government action,voters and electoral 20 percent of GDP in Moldova,Bosnia and Herzegov- sanctions (Campello and Zucco 2017).For remittance ina and over 10 percent in Albania and Armenia.Yet, receiving countries,incumbent approval will be subject to economic conditions in countries elsewhere.If coun tercyclical,remittances may'buffer'recipients from the Of course,it is possible that in a global or regional crisis,recipients may experience a decline in their remitted income and still blame vagaries of the economy and bolster support for incum- their government for their perceived role in the wider regional crisis above and beyond any changes in their remittances. The countries included in the analysis are:Albania,Armenia,Azer- 2 These countries are:Albania,Armenia,Azerbaijan,Bosnia- baijan,Belarus,Bosnia-Herzegovina,Bulgaria,Croatia,the Czech Herzegovina,Bulgaria,Croatia,the Czech Republic,Estonia Republic,Estonia,Georgia,Hungary,Kazakhstan,Kosovo,Kyr- Georgia,Hungary,Kazakhstan,Kyrgyzstan,Latvia,Lithuania gyzstan,Latvia,Lithuania,Moldova,Montenegro,FYR Macedo- Moldova,Montenegro,FYR Macedonia,Poland,Romania,Russia, nia.Poland,Romania,Russia.Serbia.Slovakia.Slovenia.Tajikistan Serbia,Slovakia,Slovenia,Tajikistan,Ukraine and Uzbekistan. Ukraine and Uzbekistan. 762Katerina Tertytchnaya et al. 26 countries in Central Eastern Europe, the Caucasus and Central Asia, drawn from the 2006 wave of the LiTS2 (summary statistics are provided in Section A.2 of the Supporting Information (SI)). With a simple di￾chotomous measure of whether a respondent receives remittances or not, two-level multilevel models pre￾sented in Table 1, demonstrate that, similar to Bravo’s (2012) results, financial remittances increase satisfac￾tion with household (Model 1) and national (Model 2) economic conditions. The effect of remittances on trust towards the country’s president in Model 3 is also positive, and statistically significant. The effect of re￾mittances on political evaluations in Model 4 remains robust, even after we control for economic satisfaction at the household, and national level (for more infor￾mation see page 13 of the SI). Yet, what happens when remittance inflows change? CHANGES IN REMITTANCES AND INCUMBENT APPROVAL Remittances do not always reach recipient households at the same time and in the same amount, and changes in the frequency and value of remittances will affect the livelihood of households in developing economies across the world. During periods of economic contrac￾tion in migrant host economies, remittance payments are likely to fall due to changing migration flows, cur￾rency depreciation, or efforts by migrants to cut costs (Mohapatra and Ratha 2010). In the midst of the global financial crisis for example, the World Bank estimated that remittance flows to developing countries declined by 6 percent between 2008 and 2009. What are the po￾litical effects of changes in remittance flows? We argue that recipients who experience a decline in remittances become less satisfied with their economic situation, thereby undermining their support for the incumbent. Conversely, when remittances increase, the economic evaluations of recipients will improve, resulting in an increase in incumbent support. In other words, remittance recipients are rewarding or punish￾ing incumbents for economic developments in migrant receiving economies that are largely outside of the control of politicians at home.While this may be a type of pocketbook voting, it also represents a form of mis￾attribution with normative implications for democratic accountability in remittance dependent states. Punish￾ing or rewarding incumbents for events outside their control may distort the economic vote as an instrument of accountability as it will undermine the direct link between government action, voters and electoral sanctions (Campello and Zucco 2017). For remittance receiving countries, incumbent approval will be subject to economic conditions in countries elsewhere. If coun￾tercyclical, remittances may ‘buffer’ recipients from the vagaries of the economy and bolster support for incum- 2 These countries are: Albania, Armenia, Azerbaijan, Bosnia￾Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Montenegro, FYR Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Ukraine and Uzbekistan. bents, but such effects could also dampen incumbent incentives to invest in welfare provisions (Doyle 2015) and encourage governments to divert income into patronage instead (Ahmed 2012). Declines in remit￾tances, caused by downturns in economies abroad, may exacerbate economic grievances among the electorate and lead to poor evaluations of the incumbent for events not necessarily under their control. In some senses then, the flow of remittances to the developing world would appear to be a political manifestation of economic dependency (e.g. Wibbels 2006). Moreover, while we agree with Bravo (2012) that remittances are an excellent identification strategy to test how individuals attribute responsibility for shocks to their income and economic security, we think we can go one step further. Bravo (2012) argues that the bias introduced by unobserved household and individ￾ual heterogeneity is likely to bias results downwards, given that those who migrate are most likely to come from households with more negative evaluations of the incumbent and status quo.3 Our panel data allows us to overcome some of the potential sources of bias by em￾ploying a within-subject design. By limiting our anal￾ysis to remittance recipients alone, we are also able to address concerns regarding the unobserved differences between households that receive remittances and those that do not. BACKGROUND AND CASE SELECTION In the ensuing sections, we provide a detailed test of whether and how fluctuations in remitted income af￾fect political attitudes. We first illustrate our argument with the case of Kyrgyzstan. Leveraging a unique four￾wave panel study of Kyrgyz citizens between 2010– 2013, the LiK surveys, we are able to carefully iden￾tify how changes in remittances affect variation in in￾cumbent approval. In a second step, we turn to cross￾sectional survey data from Central Eastern Europe, the Caucasus and Central Asia, collected in the aftermath of the Great Recession in 2008–2010. Specifically, we rely on the 2010 LiTS that includes survey data for 28 countries in the region.4 Central Eastern Europe, Central Asia, and the Cau￾casus provide a useful context for exploring how fluctu￾ations in financial remittances affect political attitudes. For many of the countries in the region, remittances are one of the most important sources of external financ￾ing after foreign direct investment. In the mid-2000s for example, financial remittances were equivalent to 20 percent of GDP in Moldova, Bosnia and Herzegov￾ina and over 10 percent in Albania and Armenia. Yet, 3 Of course, it is possible that in a global or regional crisis, recipients may experience a decline in their remitted income and still blame their government for their perceived role in the wider regional crisis, above and beyond any changes in their remittances. 4 The countries included in the analysis are:Albania,Armenia,Azer￾baijan, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kosovo, Kyr￾gyzstan, Latvia, Lithuania, Moldova, Montenegro, FYR Macedo￾nia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Ukraine and Uzbekistan. 762 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