The Electoral Determinants of Collective Remittances: The Mexican 3x1 Program for Migrants

The 3x1 Program for Migrants is a matching grant scheme that seeks to direct the money sent by migrant organizations abroad to the provision of public and social infrastructure, and to productive projects in migrants’ communities of origin. To do so, the municipal, state, and federal administrations match the amount sent by hometown associations by 3 to 1. This opens the door to the political manipulation of the program. We explore the impact of a particular facet of Mexican political life on the operation of the 3x1: its recent democratization and the increasing political competition at the municipal level. Relying on the literature on redistributive politics, we posit that an increasing number of effective parties in elections may have two different effects. On the one hand, the need to cater to more heterogeneous constituencies may increase the provision of public projects. On the other hand, since smaller coalitions are needed to win elections under tighter competition, fewer public and more private (clientelistic) projects could be awarded. Using a unique dataset on the 3x1 Program for Migrants for over 2,400 municipalities in the period 2002 through 2007, we find a lower provision of public goods in electorally competitive jurisdictions. Thus, we remain sceptical about the program success in promoting public goods in politically competitive locations with high migration levels.