ABSTRACT
In recent years, remittances, monies sent by immigrants in developed countries to relatives left behind in developing countries, have moved to the forefront in policy debates about foreign aid and development. A major foreign aid goal for donors, especially under International Monetary Fund (IMF) programs, is to establish propitious conditions for financial markets and foreign direct investment to operate within a country. Another foreign aid goal is to build government capacity in developing countries to provide basic services for their citizens, especially the poor. Remittances exacerbate the brain drain by attracting talented and highly educated individuals to the US market. Many policymakers are attracted to remittances as a major revenue stream for development, the primary goal of foreign aid. The term brain drain refers to the loss of human capital from a country due to emigration. The term has its critics and advocates, the latter citing superior earnings as evinced by remittances as proof that immigrants are more productive abroad.
