Remittances and Economic Growth in the Maghreb Countries: The Role of Financial Development

Abstract

This study examines the conditional effects of remittances on economic growth in the Maghreb countries, namely, Tunisia, Morocco, and Algeria from 2000 to 2022. Using the system generalized method of moments (GMM) in a panel data analysis, we found strong evidence of a positive relationship between remittances and economic growth. We also found that financial development acted as a complement in the remittances-growth relationship. A clearer understanding of the channels through which remittance flows will enhance economic growth in the Maghreb countries may assist policymakers to formulate appropriate policies. In particular, a policy environment that promotes financial system development would serve to attract more remittances.