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Sunday, 6 March 2011

Dual Citizens, Remittances and Investment

The debate on dual citizenship has been fairly frantic in recent times culminating in new provisions in the current Constitution of Zambia (Amendment) Bill 2010, albeit in an extremely limited way. At the heart of the pro-dual citizenship camp's argument was that the absence of the provision negated remittances and prevented legitimate Zambians abroad from getting involved in the economic life of the nation. What does international evidence tell us? A new paper finds some support from cross country evidence :
This paper examined the role of the recognition of the dual-citizenship on both the level of remittance inflows and the utilization of remittances in receiving economies of the developing world. It mobilizes a large cross-section of countries (103) observed over the period 2000-2009 and finds that countries which recognize a dual-citizenship status receive  more remittances than others. Moreover, the results also highlighted that remittances are strongly channelled into investment in these countries compared to the others.

The policy implications of these results are two-folds. First, the issue of the dual citizenship recognition would be taken into account among all the strategies designed domestically and internationally in favour of sustaining remittances. Second, the recognition of the dual citizenship also enters the debate on the ways to increase the benefits of remittance inflows by encouraging their reinvestment. The paper shows that countries which have already allowed getting a dual-citizenship perform better in terms of more investment motivated remittances.
The results make interesting observations, but unfortunately the paper does not deal sufficiently with some of the empirical challenges, particularly reversal causality issues. It appears the authors did not consider the possibility that remittances can also buy political influence. So is it that dual citizenship leads to remittances or does more remittances lead to the nation granting dual citizenship? Incidentally, the paper does not also control for things like conflict and culture. But it is still an interesting question. 


  1. I am not at all against dual citizenship, being someone who would benefit. It makes travel a lot easier and cheaper if I were to have an EU and a Zambian passport. In order to satisfy the two problems raised at the end it would make sense to institute a test to see if the applicant is acculturated enough (but then what is Zambian culture? I'm a Lusaka kid and am certainly different from an Angolan refugee who will have a very different version of Zambain culture) and second make people sign a document stating that in the event of war between the two states you will renounce your non-Zambian passport and gallantly take up arms; but then how likely is a war between Zambia and Ireland? There, nice and tidy, everyone gets to be Zambian and travel more easily and more easily get an education overseas and paranoid people don't have to check under their beds for subversives.
    The point is, generally, that those who wish to take out Zambian citizenship do so out of a love for Zambia or for business(a good thing); those Zambians who take out another nationality will also likely remain Zambian at heart so what is the big deal? The Europeans do it all the time, there are more Irish passport holders in the US than in Ireland and does anyone doubt the yanks' loyalty?

    And in response to the main thrust of the argument: it seems fairly logical to me as the ease of travel and foreign residency alluded to would make it easier to get jobs overseas and thus to send money home, and your secure status overseas allows you to devote more time to making money.

  2. Then there are the children of mixed marriages who have one Zambian parent. At present they have to choose citizenship by age 21 which is a bit young for such a decision. They may want to visit or study in the other parent's home country. They may need to try living in it before deciding. At present if such a one gives up Zambian citizenship in order to go to college elsewhere getting it back could be really difficult. This discourages their return as educated qualified people able to contribute to the economy. What are people afraid of with dual citizenship?


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