The Effect of Remittances on Sorghum Production
The large increase in remittances from migrants has generated optimism about the potential development benefits of these capital flows in rural communities where capital market failures are prevalent. This paper examines the causal effect of remittances on sorghum production by using the 2014 Living Standards Measurement Study (LSMS) dataset on Burkina Faso. We use a Bayesian instrumental variables approach to explore several specific pathways. The results show that land size, the number of workers and the quantity of herbicide used are the factors that significantly improve sorghum production in Burkina Faso. We also find that a 1% increase in the amount of remittances leads to a 0.938% decrease in production of sorghum. We suggest that public policies aimed at improving agricultural productivity will be more effective if there is a remittance use scheme in place, along with the transparency of decision-making concerning land allocation.