1 | P a g e
THE POLITICAL ECONOMY OF FINANCIAL REMITTANCES AND THEIR IMPACT ON
INCUMBENT APPROVAL AND POLITICAL STABILITY IN POST-COMMUNIST
COUNTRIES
1.0 Introduction
1.1 Approach to financial remittances
The financial remittances comprise an absolute staple of the economic scenery in the
Post-Communist countries, as they are practically the backbone of many families, and are widely
used in the development of the economy. According to the studies of Payasilan (2011), political
and economic related remittances are of crucial importance due to their profound effect on
income distribution, social welfare, poverty eradication levels and migration levels of the
affected communities around the world. Very often this money is coming from people employed
abroad and intended to their families in their mother lands. The function of remittances is crucial
for supporting families income, enabling higher consumption, and for prompting saving and
investment. According to the results presented by Pavletic (2010), remittances have a deep and
formative effect on totality of the economic indicators across post-communist economies so that
poverty is being reduced, household income is growing, and consumption patterns are being
stimulated, that bring in together with improved economic health and stability. Alongside
household income lift off, which is caused by remittance inflow into former communist
economies, the whole socio-economic sphere is getting stronger. Thanks to these remittances,
living conditions of citizens of host countries have improved, the rate of poverty has reduced and
the economy of the country has been strengthened (Pavletic, 2010). On the other hand, the
remittances also build the consumption and investment as these process allows the domestic
market to expand, increase the number of entrepreneur works and stimulate the national
2 | P a g e
economy. Through the process of providing operating conditions for the rise of private
businesses, national economies of post-communist countries gain macroeconomic impact which
helps them to be strong both in case of external shocks or uncertainty of economy (Pavletic,
2010). The study of the political economy of monetary remittances is very informative as it gives
a clear understanding of their consequences over incumbent approval and the stability of the
system in post-communist countries. The potential of remittances for promoting better lifestyles,
improving social welfare and stimulating economic growth can make people perceive more their
governments effective and can be a source of political stability (Payaslian, 2011). reliance of
households on remittance cash flows may determine the overall attitude of its inhabitants
towards the incumbent regime that might even play a role in the power dynamics and result of
elections in post-socialist societies.
1.2 Weight in the economic transition from communism to a market-driven country
Financial remittances show up to be a very strong factor in the process of the transition
from communism to market-oriented economies in the former communist countries. This process
is shown by Kuntz (2011). As a vast vehicle for foreign exchange and investment, remittances
are key in supplementing local revenues and are pivotal in the facilitation of economic growth. In
the context of weak social protections and instability of the institutional environment,
remittances form a critically important source of life support, enhancing household welfare,
providing social protection, and reducing income inequality. First of all, Purletic (2010) pointed
out that remittances are multifaceted and they cover different types of expenditures, such as
house costs, education, and health care services, and they also contribute to human capital
development and the fight against poverty. Remittances clearly show that the economies post-
communism experience structural problems and are exposed to vulnerabilities, therefore, policy
3 | P a g e
measures should be undertaken to make use of support from remittances in favor of sustainable
development and political stability. Since remittances are both main contributors to foreign
exchange and investments, they help to improve macroeconomic indicators, strengthen fiscal
buffers, and capitalize on the post-communist countries (Kuntz, 2011). Furtherer, remittances
contributing to the inflation of household budgets increase the consumer spending, expand the
domestic demand, and improve local businesses, thus driving economic activity and the
employment creation. The second is that remittances will provide social mobility and economic
prosperity in the long run by reducing healthcare and education costs and by increasing human
capital formation (Pavletic, 2010). And thus, the contribution of financial remittances in the post-
communist economies to economic transition and social-economic development, implies their
perennial role in supporting the process. Despite the fact that they are beacons of hope, their
dependence raises concerns regarding the vulnerability and systemic problems of those countries
which in turn calls for the enactment of policies to exploit the potential of these countries fully
for a peacetime and sustainable growth. Through the strengthening of institutions and the
promotion of an enabling environment for remittances utilization, policymakers will be able to
create a channel that channels these inflows to peback into inclusive development and resilient to
external shocks.
1.3 Effects on political processes
It should be noted that financial remittances do not only concern areas of the economy
but also substantially influence political processes and dynamics to a great extent according to
Payaslian (2011). The government’s popularity often rises due to increase in household welfare
through remittances. The remittances reduce poverty and serve as a safety net protecting families
against economic hardships. Governments especially at times of elections have the tendency to
4 | P a g e
capitalize on remittance inflows strategically to consolidate the popular vote, enhance social
harmony, and ensure peace and security. Nevertheless, according to Pavletic (2010), remittance
dependency could give rise to a range of difficulties, among these the emergence of Dutch
disease phenomenon, the fluctuations in the exchange rate and the accountability challenges. The
increase in the remittances received may permeate the corruption, rent-seeking attitudes and
clientelism as the result of which the democratic governance structures would be weakened
while the political accountability would be challenged. The delicate balance between financial
remittances and political processes requires to have a complex comprehension of their
consequences on party leaders' ratings and political stability in post-communist countries. At the
same time, remittances can be used to strengthen the populist movements and reinforce this
political system with the ruling party becoming more resistant to reform. There is a risk that
overreliance on remittances will create conditions where people have a feeling of a dependency
and difficulty in diversified and reform-oriented economic structure, which in the end reinforces
vulnerabilities in the political system (Payaslian, 2011; Pavletic, 2010). analysis of the complex
relationships between financial remittance and political processes becomes of vital importance to
the understanding of their impact on the job approval rating and political stability in the post-
communist countries. Though remittances have many positive social welfare and economic
development implications, the challenges to the concerned authorities need deep consideration
and possible resolutions. The remittance dependency of economies in post-communist contexts
can be mitigated and the stability of the democratic governance safeguarded by policymakers
through governance gaps addressing the lack of transparency and the promotion of economic
resilience.
5 | P a g e
2.0 Sources and the Disbursement Methods of Remittances
2.1 Migrant labor and diaspora communities.
The migrant workforce and diaspora communities remain the two largest players on the
playing field of financial remittances in the post-communist world and both of them contribute
towards not only the economic transfers but also the building of social connections across the
borders, as mentioned by Powell and Chacha (2016). Migrant labor is the main element of
remittances due to the tendency of youth leaving their homeland in search of work abroad that
enable them to send money to their families and home community. Along with this, the diaspora
communities tend to stay together and actively participate in remittances of funds to family
members and believers in local trade and investment into the community development initiatives.
Diaspora’s networking role in the promotion of economic integration and FDI is further
explained by Dorobantu (2010) who mentions their growing entrepreneurship and innovatory
role within the post-communist economies. Through the use of migrant workers and diaspora
communities remittances, USA can however create economic growth, social adhesion, and
political stability. Remittances inflows not only raise the level of personal income and the local
enterprises' prosperity, and they also lead to the expansion of economic activities as well as their
diversification, and enhancement human capital. Furthermore, guesswork of diaspora members
in development projects and entrepreneurial initiatives catalyzes innovation, causes employment
opportunities, and stirs economic vibrancy within post-communist economies (Dorobantu, 2010).
To summarize, workers and foreign communities associated with diaspora are the key players in
the fostering of remittances that build economic vigor and social connections which override
borders. In this way, former communist states can use this remittance inflow resources to refrain
from dependency, strengthen family ties and improve the sense of stability. But the key factor
6 | P a g e
that lays the foundation for the effective of policy interventions and institutional frameworks to
go ahead with the maximizing the positive effects of remittances and at the same time mitigating
the impact of dependency and governance issues.
2.2 Formal and informal transfer mechanisms for technological spillovers
Formal and non-formal mechanisms of transfers in the field of remittances play the role
of vehicles through which remittances are sending and a variety of techniques from conventional
bank transactions to innovative digital platforms can be used. Mucumoto and Sjoberg (2005)
reinforce the fact that formality of remittance channel is quite dominant with the capabilities to
equip banks, money transfer operator and other postal services with the security and
dependability of the transfer process. Such formal systems promote a convenience, speed and
transparency when it comes to remittances transactions, which eventually lead to the financial
inclusion and the belittling of the reservations for the receivers concerning access to banking. At
the same time, this is complemented by informal transfers that continue to thrive, such as hawala
networks and couriers, which are especially prevalent in areas characterized by limited banking
infrastructure and regulatory control. The paper by Dorobantu (2010) goes into the functional
bottlenecks experienced in informal remittance channels when it comes to overseeing and
enforcing robust measures to stop money laundering, cybercrimes, and illegal financial
transactions. The challenges of balancing the regulatory schemes between formal and informal
transfer mechanisms is a crucial issue that remains a necessity for optimal development outcome
and to evade risks like financial crime and instability. Attempts to regulate formal remittance
channels implicate mainly increasing transparency, drawing a line between money laundering
activities and tight coordination between the financial sector and financial authority (Muço &
Sjöberg, 2005). On the contrary, the remedy for informal transfer networks depends on solving
7 | P a g e
issues in depth and multi-faceted, such as reviewing regulations, providing capacity development
programs, and channeling informal financial actors (Dorobantu, 2010). Through designing a
balance between formal as well as non-formal remittance channels, policymakers can have a
multipurpose outcome of employing remittances towards economical development purposes
while building the foundation of strong financial ethics as well. as most remittances are sent
either through formal or informal channels of transfer, the latter working well for small amounts
of money or urgency, while the former is known to be often reliable but less competitive in terms
of transfer costs. Formal remittance channel regulation, coupled with appropriate oversight, must
aim to allow for the full harvesting of benefits and control of risks that informal channels are
probably associated with. In addition to enforcement mechanisms through which, regulators
empower the system with appropriate frameworks, policymakers can lay down the foundation
that enables the optimal positive impact of remittances without compromising the integrity of the
associated financial systems.
2.3 Effectiveness of remittance-seizing policies
The effectiveness of remittance-seizing policies in the post-communist countries is
determinable to several factors such as the regulatory environment, the existing strategies of
enforcement, and the internal political conditions of the country. Powell and Chacha (2016)
provide a deeper understanding of the role of economic relations and institutional stability on
remittance flows: the stronger the economic ties and the higher the institutional stability, the
weaker the exposure to state coup and political violence. Concurrently, Dorobantu (2010) is
oriented to the participation of foreign direct investment in post-communism states, and she
attaches great importance to the political competition in this process; therefore, she makes a new
adjustment on the investment policy and regulatory results. Besides, Muço and Sjöberg (2005)
8 | P a g e
analyze the role of political culture on the economic reform efforts of Albania, thus revealing
how historical legacies, social disputes, and political actors’ conflicts influence the making and
execution of policies. The success of remittance-seizing policies is determined to a great extent
by the quality , institutional capacity, and political will; hence, strong policy formats and
democratic governance structures become significant in the post-communist culture. Strong
regulation, good enforcement, and transparent governance are the sets of conditions that
countries need to do better in siphoning out remittances illicitly acquired or misused for illicit
purposes. Also, the political stability, namely, the strength of institutions and the rule of law,
governs the environment in which one can design and implement effective policies. Political
contests, history legacies and social segments may constitute barriers preventing implementation
of regulations well, especially in situation, which is characterized by low governance and elite
control. As a result, the authorities have to concentrate on the strengthening of institutional
capacity, more transparency, and more democratic accountability resulting in more effective
policies of remittance seizing and in providing the developmental impact of remittances in post-
communist countries in the long run. To sum up, through the creation of a favourable remittance
uptake space and by ensuring responsible government practices are at the core of any measures
and strategies, those post-communist societies can unlock the hidden potential of remittances for
the recovery and progress of their economies.
3.0 Economic Impact of Remittances
3.1 Households incomes contribution
Financial remittances are the foundation of the income increase in post-communist
countries that helps in supporting the consumption and the livelihood, which is the main message
of Bastiaens and Tirone article of the year 2019. The remittances constitute much-needed support
9 | P a g e
for the recipient families, giving them a chance to afford the basics and invest in education and
healthcare as well as search for potentially profitable ventures. And through the provision of
extra cash to individual households the remittances enable shopping power, activeness of local
businesses, and fueling entrepreneurship and creation of jobs. Additionally, Gast (2021)
highlights the fact that remittances can help the recipient households withstand or avert income
drops, translating into less vulnerability that leads to economic downturns and improves financial
resilience. The regular stream of remittances microeconomically insulates households against
factors that may have a negative influence on economic macrocondition, allowing families a
much-needed safety net in times of distress. Besides this, the remittances make possible poverty
alleviation and the building of social mobility, it drives economic empowerment which ends up
increasing the living standards of the receivers and also enabling them to be able to pursue
opportunities for upward mobility. To the core, financial remittances in fact make very
significant contribution to increase in income of families and national welfare in the post-
communist countries. It is through remittances that households have a source of revenue for
basic needs, goods and services, and even investments. Remittances act as the impetus for
poverty alleviation, economic empowerment, and social development. Since, then, the policies
can affect the remittances flows and enhance the extent to which development happens; there
will be significant growth and betterment of lives in post-communist societies.
3.2. Poverty reduction and economic growth
Remittances carry an irreplaceable role for poverty reduction and economic growth in
former communist countries, functioning as catalysts for consumption, investment and
productivity enhancement features. Ostensibly, Gast (2021) gets into details of remittances' role
in poverty reduction, highlighting the ability of this factor to bring millions of people out of
10 | P a g e
poverty and improve living standards in recipient communities. Marandici and Leșanu (2021)
represent the other side of the coin in their discussion of the economic importance of remittances
for de facto states in the post-Soviet region, pinpointing the pivotal role of remittances in
development and stability. Remittances play a vital role for families living below the poverty
line, which contributes toward meeting their basic needs including education, healthcare and
housing and it also helps the family to invest in income-generating activities. The injection of
remittance money into the local economy becomes the driving force for economic growth, that
pushes demand for local products and services, and consequently, stimulates business
development, creates jobs, and brings about economic diversification. Through provision of both
consumption and investment, remittances are the fuel propelling the economic growth, reduction
of poverty and sustainable development in post-communist countries. The multitude of economic
benefits of remittances include both direct as well as the indirect effects which, in their turn,
improve the livelihoods, standards of living and the prospects for further socioeconomic progress
within the recipient economies. Subsequently, policies geared towards ensuring smooth
remittance flows and their developmental impact, therefore, would decisively influence the
creation of inclusive growth, reduction of poverty and enhancement of resilience.
3.3 Social effects on income inequality
The role of remittances as a factor of income inequality in the post-communist countries
is very complex, despite the fact that scholars as Bastiaens and Tirone (2019) underline this
because of the studies of Marandici and Leșanu (2021). Bastiaens' and Tirone's findings show
remittances and democratization can have a great impact on lessening income inequality among
many low-income countries and in relation to living together peacefully. Also observing how
remittances are tied to socio-economic dynamics and state-building procedures in the case of the
11 | P a g e
post-Soviet area, it is seen that Marandici and Leșanu explain how their influence is felt in the
whole society. There is the possibility that remittances offer an aid to poverty alleviation in
social welfare and their effects on inequality are not straightforward, as scholars demonstrate.
The unbalanced flow of remittance funds among households and areas may aggravate existing
differences in the incomes, leading to a reinforcement of the social segregation and therefore
slowing down the processes toward inclusive growth and development of the country. The
remittance incomes could be very skewed across different sections of the society by contributing
to the pattern of privilege and making existing socio-economic gaps to widen. Overlooking
income inequality, or simply preventing it in post-communist contexts, requires a well-founded
articulation of complex policy approaches that account for the complex interplay of economic,
social and political factors. The implementation of fair-minded policies that increase remittances
gains access, create more economic opportunities and strengthen social aid nets are inevitable.
Governments can motivate many sectors of society to become part of remittance flows utilization
by increasing their financial awareness, providing credits and investment opportunities, and
promoting the growth of small businesses. Furthermore, initiatives to increase education and
healthcare equality, widen employment opportunities, and speed up economic growth that
include everyone are crucial for decreasing income inequalities and forging a social life. The role
of remittances cannot be overstated in the development of former communist countries.
4.0 Influence of It on Incumbent's Appraisal
4.1 The improvement of financial conditions and the feeling of gratitude
The inflows of remittances usually function as triggers for improvements in the monetary
situation of recipients' households which have been widely reviewed and highlighted by the
academic article published by Bogdani and Loughlin in 2007. Research by this organization
12 | P a g e
reveals how remittances improve the welfare of households and economic sustainability and in
the process, improve lives of the recipients and their families materially which also benefit the
society. Consequently, people recognise that the governments that are in power, are those due to
whom they and their families are in better living standards compared to the past because the
family through remittance is experiencing improvements. This opinion is sometimes referred to
as the feeling that government policies and facilitating remittances and also providing economic
opportunities are the main factors directly responsible for the improved financial situation they
are in. Norkus (2012) goes deeper into remittances and the influence on the general citizenry in
terms of ascertaining the closeness of remittances to political governance with positive output
linked to these political leadership. Remittances entrust incumbent leaders with a sense of
achievement as recipients believe they are enjoying improved economic conditions because of
policies that government has put in place to achieve the desired end, which is remittance inflows.
In sum, the redistribution of remittances causes an economic advancement which deepens the
level of support for the ruling system and contributes to a general peaceful political environment
in post-communist countries. The connection of remittances with household security, welfare,
and the public trust towards governance is the leading insight that the policymakers can use in an
effort to tap into the benefits of remittance inflows for socio-economic development and political
stability. Governments may utilize policies that help with remittances transfer, create economic
openings and generate an inclusive growth. It will not only improve the households’ wellbeing
but also evoke positive attitude towards governance thus creating stability and social unification.
4.2 Remittances income dependence is the major one
The ultimate review by e-citizens on post-communist regimes is the dependence on
remittance income, which is vividly addressed by Holmes (2016). The recurrent migration and
13 | P a g e
its continued effect of serving as primary liaison of households with remittance engenders
citizen’s expectations of incumbent governments to protect their uninterrupted transfer and
provide assistance to migrancy communities. Such a configuration generates a symbiotic
relationship between people and governments, whereby the workable policies on remittances
establishment becomes very important for the political acceptance. Governments that are
proficient at providing stability in currency rates, implementing appropriate financial regulations,
and providing environment that makes investments more favorable to migrant remittances are
destined to receive high level of gratitude from people whom remittances are directly responsible
for their living (Holmes, 2016). On the contrary, policies like those that interrupt remittance
flows and those that fail to address problems migrants go through may disappoint them and
result into negative perceptions of the incumbents, which at times pose a big challenge to their
legitimacy and governance. Uncertainties related to exchange rate risk, poor regulation of the
financial sector, and investment promotion may not be good for the stability and predictability of
remittances, which increases the anxiety level of the public and erodes the public confidence in
the national government. This, in turn, can lead to pro-government attitudes from remittances
dependent groups shifting, triggering various forms of political discontent as manifested in
electoral backlash or mass mobilization, which can threaten the stability of electoral regimes.
Appreciating the crucial role of remittance income accountability in the shaping of citizen
assessments, authorities in post-communist nations should make a priority in formulating and
implementing policies that aims at strengthening the remittance flows and supporting the
migrants in the migration communities. Nations can earn political legitimacy and maintain socio-
economic stability, while simultaneously avoiding the risk of disrupting the peace that can be
brought about by angry remittance-dependent citizens by their efforts in meeting the needs of
14 | P a g e
remittance-dependent citizens and creating an enabling environment for remittance-related
activities (Holmes, 2016).
4.3 Influence of emigration policies on human rights
Emigration policies exert an enormous impact on human rights and public attitudes to the
incumbent power among the former communist countries, matter which scholars analyzed,
including Bogdani and Loughlin in 2007, but also Norkus in 2012. The importance of emigration
policies in the process of European Union integration as highlighted in the examination of
Albania by Bogdani and Loughlin brings to the fore the critical role of emigration policy in
dealing with human rights issues and defending migrant rights. However, Norkus (2012) points
out the complicated nature of the path of post-communist emigration, with emigration rules
playing a formidable role in affecting the economic dynamics and political stability within these
countries. The governments that intend to take more open and rights-based immigration policies
will strengthen their legitimacy and get a reputation of a good player among the population, and
mainly among migrants. Through giving the prime role to migrant rights protection, holding safe
and lawful migration processes, and creating the integration initiatives, governments are able to
provide a background of respecting human rights and democratic values. Such inclusive policies
are not only beneficial for migrants regarding their welfare but also improve people's confidence
in government authorities and institutions of government. On the flip side, introducing confining
or discriminating emigration restrictions may lead to human rights abuses, social disturbances,
and negative perceptions of the governing governments. The occurrence of instances of
differential treatment, unnecessary detention, or deportation without any lawful basis may help to
diminish the people’s trust in government arm and also affect the legitimacy of political bodies.
Additionally, harsh penalties against migrants may inflame social conflicts and deepen
15 | P a g e
discontent for socially left-behind groups which puts in danger the country’s political stability
and social cohesion. The task for policymakers to construct emigration policies for post-
communist countries lies in ensuring that the strategies they use are not only inclusive and rights-
based, but as well respect human rights, provide political legitimacy, and eliminate social
inequalities.
5.0 Political instability is the consequence
5.1 Decreasing financial burdens for progress
The post-communist countries’ socioeconomic scenery is completely different because
financial remittances have the ability to both trigger transformations and destabilize at the same
time (Panagiotou, 2011; Sinha, 2004; Jones, 2018). Panagiotou's study on the European Union
integration direction of Albania makes it quite apparent that the Remittances play a crucial role
in alleviating economic problems and create a stable situation in the country. Remittances have
been this vital support to many families who could meet basic needs, be able to invest in
education and health, hence, pursue entrepreneurial opportunities (Panagiotou, 2011). But on the
other side, the ever-changing economic narrative of Indian federalism as discussed by Sinha
demonstrates the many dimensions such issues have in the relationship between the remittance
dependence, the growing economic disparities, and political instability. While the financial
remittances that are given relieve people from poverties, they may in the future complicate social
relations and political rivalry in post-communist countries. Sinha's views point toward the
undisputed fact that a myriad of economic factors can pervasively influence political dynamics
and conflict mitigation. Remittances can result in such vulnerabilities to both external shocks and
internal strife (Sinha, 2004). In the economies that depend heavily on remittances, the increasing
competition for the resources and the power will be more predominant among the different
16 | P a g e
fragmented societies in the society, thus leading to the social tension and the political unrest
(Jones, 2018). Not just that, the range of remittance influences goes beyond the economic
domain and also has wider sociopolitical effects. Economies that depend on remittance confront
the issues of achieving development and inclusiveness on a sustainable basis which can, in turn,
deepen the inequalities even further and create more dependence on external sources of income
(Panagiotou, 2011). Dealing with the complexity of remittances dependency necessitates policy
makers to take appropriate strategies which are exhaustive and combines the benefit of
remittances with the challenges of escalating conflict and the social tension. Through stimulation
of the inclusive economic growth, government’s slowing down corruption and decreasing social
inequalities, governments will have an opportunity to use remittances as a factor of sustainable
development and political stability in post-communist countries.
5.2 Risk of escalating conflicts
The face of the momentous remittance inflow in the post-communist states carries the
two-faced sword which has the double-edged cutting blade that is both for a relief and or socio-
political risks (Dillman, 2002). Dillman's research in the Deepening of the North African state in
the international market and economic reforms illustrates that liberalization may increase
political tensions bringing about social turmoil. Competition for resources can be intensified, and
the inequality is heightened in the economy that depends on remittance, among the marginalized
groups and there is escalation in social polarization, and that leads to increase in conflict
vulnerability. Besides, remittance and its secret inflow will strengthen the reign and authority of
government, which will increase the power of government in the destructive way and it will
make the democratic process weak (Dillman, 2002). Since opposing regimes become more and
more autocratic the last thing they do is to tolerate or engage in dialogue with those, who are
17 | P a g e
critical of their policies and strive for change. Therefore, revolutionary movements, which are
fighting for democracy and political freedom, are often repressed and persecuted by the regimes
they oppose (Dillman, 2002). The struggle and violence towards political dissidents and human
rights activists, symbolically represent the aimless hazard of defying the firmly installed
authoritarian regime in countries that are dependent on remittances. In addition, conditions of
power inequality resulting from remittances reinforce the struggle faced by the opposition
camps, by silencing their voices and, hence, engendering a cycle of resistance and repression.
The solutions to the remittance dependency problems presume all-rounded strategies, which
strive for inclusive economic growth, social harmony, and political reforms (Dillman, 2002). In
this regard, there should be close partnership among governments and relevant international
players to ensure transparent administration, proffer remedies to socioeconomic inequalities, and
check the risk of conflict escalation in the remittance relying states. Through enhancement of
deep democracy, defense of human rights and encouraging the dialogue that can be carried out
between ruling institutions and the opposition groups, the policymakers will be able to navigate
remittance dynamics complexity and contribute to sustainable development and stable political
systems in ex post communist societies.
5.3 As a consequence, the political opposition movements were also secondary victims
As a result opposed to political movements often gain the position of a secondary victim
of the economies which are dependent on remittances entering the resolution of the conflict
(Sinha, 2004; Panagiotou, 2011). Through her Albania's case study the integration process of
country in EU, Panagiotou evaluates the difficulties which opposition movements access in
reconciliation of economic reforms and political processes. Sinha's study of federalism
development process from the ancient time to the present day in India signifies that political
18 | P a g e
institutions play a significant role in resolving the conflicts and mitigating the needs of all types
of people. Post-communist political opposition movements may face repression, imposition, and
marginalization on their way up to the leadership in competition with the incumbent government,
that doesn't agree with it's reform ideas (Panagiotou, 2011; Sinha, 2004). In the combat zones,
the political areal decreases that leads to even more polarity, authoritarianism, and political
instability in post-communist countries. The silence of dissenting voices aggravates social unrest
and promotes the failed desire for democratically elected government, hence, sowing the seeds of
dictatorship of little or no public participation. To tackle these problems, the joint take of actions
is needed to protect basic freedoms, endorse democratic participation for all, and initiate talks
between authorities and political opponents. Enhancing democratic institutions, defending
citizens' rights, and preserving the rule of law are the policies that will help to decrease the risk
of conflicts escalation and create an enabling environment for a peaceful change of power in the
remittances-reliant economies.
6.0 The study of case studies from post-communist countries
6.1 A situation where households in high remittance-receiving countries (e.g. Moldova)
The analysis of the case of studies like Moldova where households struggle to survive
due to over-depending on remittances is an opportunity for gaining insights into various
scenarios (Kelemen, 2021; Jones, 2014). The study of Kelemen on the European Union,
highlighting the authoritarian balance, is very insightful about the politics in the post-communist
states, providing much-needed views concerning governance and political structures. In Moldova
which is one of those countries with a high proportion of remittances, households rely on the
financial assistance sent by their relatives who work abroad, mostly in Western Europe
(Kelemen, 2021). Jones explores the political economic aspects of the Myanmar transition,
19 | P a g e
focusing on the set of interactions between external influences and internal factors that define the
mentioned country's development pattern. Besides, the government domestic policy and external
relationships play major role in shaping political and economic environment in Moldova. In this
context, remittances are considered to be a vital source of income for many families (Jones,
2014). The work of comprehending the nuances of remittance-based economies is the integration
of the intricate interplay of all-the-economic, -the political, and -the social factors. Transfers of
money from home derived from Moldovan workers abroad not only reduce poverty and support
household expenditure but change politics and state governance. The exposure to remittances
emphasizes how unstable these economies are, and how important it is to promote diversity of
income sources and sustainable development through consequent. Case studies like Moldova
may assist policymakers to draw precious conclusions on rising the problems and prospects
having a remittance-dependent society and develop strategies for promotion inclusive growth,
increase the efficiency of governance, and create a decent society in post-communist countries.
6.2 Varied political and economic environments
Diverse political and economic backgrounds of postsocialist countries determine what
role remittances play in welfare of households and national economies, respectively (Golovnin,
Golovnina, & Saush, 2013). Golovnin and others' study on the financial and economic crisis of
2008-2009 ex post-Soviet states stresses the proximity of post-communist states to external risks
since the mentioned events. Forms of government in Moldova are rather complicatedly
interconnected being dependent on features like governance problems, economic weaknesses,
and geopolitical thorns. The path from the formerly communist economy to the market-driven
one in question has not been smooth at all. Granted, remittances have had profound positive
effects on poverty reduction and economic recovery (Golovnin et al., 2013). By learning how the
20 | P a g e
post-communist countries are different to one another is as critical for the assessment of how the
remittance-related policies and interventions can lead to inclusive growth and sustainable
development. The example of Moldova is a living proof that remittances are the principal vital
support for many homes keeping the flow of income intact and the spending high. Nevertheless,
a country that gets its main export revenue from abroad is prone to external risks such as
volatility of the global economy and the fashionable rhythm of immigration. Moreover, there is a
geopolitical factor that further makes Moldova's economic development more challenges, which
in one way or another puts investor confidence out of order and distorts policy decision. Through
exploring the situations of the countries that have transitioned from an ordinary communist to
post-communist era like Moldova, policymakers can garner valuable information on the
challenges and opportunities inherent in remittance dependency. Strategies developed to benefit
from remittance flows should be based on single-remittance specific contexts and social
governance models of every country, resulting in the achievement of resilience in addition to
inclusive growth in the light of uncertainty.
6.3 Relationships between effects
The interplay of the impact of remittances in countries with high remittance-receiving
levels such as Moldova is complicated because social-economic affairs and the political scales
are altered consequently (Kelemen, 2021). Kelemen associates the authoritariat equilibrium
within the EU by indicating the roadblocks that democratic government and institutional change
may encounter in the postcommunist environment. Social remittance facility not only work out
in alleviating the poverty and enhance household livings but also determine the stability of the
region, social resilience and the structure of governance as well. Jones (2014) points out the
difficulty of Myanmar's transition, stressing the necessity for development strategies that take
21 | P a g e
into account all sections of society and the needed reforms in the political realm. In the same
way, the experience of Moldova with remittances demonstrates that it is vital to tackle
governance loopholes, to develop a wide variety of sectors, and to strengthen the social
protection system to be able to derive the developmental power of remittances. In Moldova, the
strong position of remittances has been manifested not only in economic growth, but in the
society also. It, however, is integrated in political processes, predominantly, leading to the
weakening of political structures and disintegration of a society. Contrary to common belief, a
large remittance flow can either maintain or destabilize existing power structures. The way these
funds are deployed and accessed will dictate which case applies. Also, remittances will not only
enrich social aspects of the community as participants assess the performance of their
government but will as well shape their perception towards the political institutions.
Consequently, policymakers in Moldova should factor in the extended consequences of
remittances that outlive Moldova's economic growth and poverty reduction purposes and
incorporate them into national development plans that deal with governance problems and
promote political stability. Through facilitating the inclusive governance structures and utilizing
the contributions for sustainable development Moldova could manage competently the intricate
interactions between money-transfers, socio-economic situation and political processes, laying
the foundation for inclusive growth and a democratic stability.
7.0 Conclusion
At the end, the observation of financial remittances in the countries after the collapse of the
communism shows how innate and versatile they are for a socio-economic and political spheres.
Extensive research conducted by scholars like Milovanović (2020) and Maydom (2017) has
demonstrated some complex relations among the remittances, the electoral behavior, democracy
22 | P a g e
and economic development found in these nations. Their results are strongly in favor of
remittances as a driving force, for the political involvement, alleviation of poverty, and
institutional reform of transitional societies after communism. However, going forward policy
makers need to put greater emphasis on mechanisms that ensure transparency, accountability and
civic engagement in order to fully realize the potential of remittances for sustainable
development and better governance. Although remittances might be instrumental in electoral
outcomes in some ways, they generally have long-term and variable impacts on economic
diversification, social progress and political stability including different relationships between
state and society. The scientists are supposed to work on the above pitfalls and offer a
comprehensive outline concerning the processes that lie beneath the financial remittances within
the postcommunist countries. It thereby enables policy makers make informed decision to design
and implement those policies that are likely to yield high returns from remittances while at the
same time preventing the loopholes and challenges that come with it as a development tool.
When looking into the matter at hand, it will not do only academic activities the great favour, but
also will show the policymakers a way for remittances to change this society for the better.
23 | P a g e
8.0 References
Bastiaens, I., & Tirone, D. C. (2019). Remittances and varieties of democratization in developing
countries. Democratization, 26(7), 1132-1153.
Bogdani, M., & Loughlin, J. (2007). Albania and the European Union: the tumultuous journey
towards integration and accession. Bloomsbury Publishing.
Dillman, B. (2002). International markets and partial economic reforms in North Africa: what
impact on democratization?. Democratization, 9(1), 63-86.
Dorobantu, S. P. R. (2010). Political competition and the regulation of foreign direct
investment (Doctoral dissertation).
Gast, A. S. (2021). The Eurasian Economic Union–keeping up with the EU and China. Post-
Communist Economies, 33(2-3), 175-199.
Golovnin, M., Libman, A., Ushkalova, D., & Yakusheva, A. (2013). Is the USSR dead?
Experience from the financial and economic crisis of 2008–2009. Communist and Post-
Communist Studies, 46(1), 109-122.
Holmes, L. (2016). Comparative conclusions: Legitimacy and legitimation in Eurasian post-
communist states. In Politics and Legitimacy in Post-Soviet Eurasia (pp. 223-245).
London: Palgrave Macmillan UK.
Jones, L. (2014). The political economy of Myanmar’s transition. Journal of Contemporary
Asia, 44(1), 144-170.
Kelemen, R. D. (2021). The European Union’s authoritarian equilibrium. In Strategic Responses
to Domestic Contestation (pp. 153-171). Routledge.
24 | P a g e
Kuntz, J. (2011). (Re) Entering Europe: The Post-communist Transition of Croatian Political
Culture. Politička misao: časopis za politologiju, 48(5), 215-246.
Marandici, I., & Leșanu, A. (2021). The political economy of the post-Soviet de facto states: A
paired comparison of Transnistria and the Donetsk People’s Republic. Problems of Post-
Communism, 68(4), 339-351.
Maydom, B. (2017). Migrant remittances and democracy (Doctoral dissertation, University of
Oxford).
Milovanović, M. (2020). Financial remittances and election turnout in the municipalities of the
Republic of Serbia: the economy of voting. Demográfia English Edition, 63(5), 41-71.
Muço, M., & Sjöberg, Ö. (2005). 7 A chequered history Political culture and conflict in Albanian
economic reform. The Political Economy of Reform Failure, 44, 146.
Norkus, Z. (2012). On Baltic Slovenia and Adriatic Lithuania: A qualitative comparative
analysis of patterns in post-communist transformation. Central European University
Press.
Panagiotou, R. (2011). Albania and the EU: from isolation to integration. Journal of Balkan and
Near Eastern Studies, 13(3), 357-374.
Pavletic, I. (2010). Political competition, economic reform and growth: theory and evidence
from transition countries. vdf Hochschulverlag AG.
Payaslian, S. (2011). The political economy of human rights in Armenia. The Political Economy
of Human Rights in Armenia, 1-440.
25 | P a g e
Powell, J., & Chacha, M. (2016). Investing in stability: Economic interdependence, coups d’état,
and the capitalist peace. Journal of Peace Research, 53(4), 525-538.
Sinha, A. (2004). The changing political economy of federalism in India: A historical
institutionalist approach. India Review, 3(1), 25-63.
