From Potential to Productivity:  Remittances, Migrant Organizations, and Development in Mexico

By Dwight Dyer, PhD

For the last ten years, an average of 350,000 Mexicans per year have made their way across the northern border.  Persently,over 10 million make their living in the United States.  Migrants' remittances to Mexico reached over $18 billion in 2005, topping foreign direct investment as a source of income.  The study of migrant workers' individual remittances to Mexico has spurred a debate on thier developmental consequences.  On one hand, the "pessimistic" view contends that remittances are spent primarily on sustaining basic household consumption and do not find their way to savings and productive investments.  On the other hand, the "optimistic" perspective argues that these expenditures aid the household and have positive, if indirect, effects on development.  Dwight Dyer's paper documents broad trends in Mexican migration and remittance patterns, sketches the debate around their developmental effects, and suggests avenues for philanthropy to help increase the positivive developmental effects remittances can have.

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