March 9, 2011

The Aid Workers Really Help Ukraine

The Economist had a very interesting piece about an impact of international remittances (e.g. MoneyGram, Western Union) on economic development. The main point of the article was that migrant workers send more money back home than their countries receive in foreing aid. Ukraine seems to be the case too. If you look at the following graph, you can see that the remittances (measured in current US dollars) reached almost $6 billion in 2008. FYI, the total amount of foreign aid that Ukraine received between 1991 and 1999 was only $4 billion (current US dollars). After adjusting for inflation, Ukraine received $5,2 billion in foreign aid between 1991 and 1999 (I used BLS's CPI data). An annual amount of international remittances still exceed an amount of foreing aid that Ukraine received in almost ten years!


  1. And I bet the money gets put to much better use too. Foreign aid just swells and prolongs Ukraine's unsustainable bureaucracy.

  2. Yes. It's not a secret that foreign aid is dissipated through rents to only few interest-groups.