Ratha, Dilip

Person:
Ratha, Dilip

Development Prospects Group, World Bank

Fields of Specialization

migration and development; remittances

External Links

People Move
Global Knowledge Partnership on Migration and Development

Departments

Development Prospects Group, World Bank

Last updated: January 31, 2023

Biography

Dilip Ratha is Lead Economist and Manager, Migration and Remittances, and CEO, Global Knowledge Partnership on Migration and Development (KNOMAD) in the Development Prospects Group of the World Bank. He is the focal point for the World Bank’s Migration Working Group and the Diaspora Bond Task Force, and a co-coordinator of the (G8) Global Remittances Working Group. According to the New York Times, “No one has done more than Mr. Ratha to make migration and its potential rewards a top-of-the-agenda concern in the world’s development ministries.” Besides migration and remittances, Dilip’s research reflects a deep interest in innovative financing for poor countries: diaspora bonds, future-flow securitization, shadow sovereign ratings and South-South foreign direct investment. He is currently the chair of the Consortium Advisory Group (and previously the founding CEO) of the Migrating out of Poverty Research Consortium based in the University of Sussex. Prior to joining the World Bank, he worked as a regional economist for Asia at Credit Agricole Indosuez, Singapore; as an assistant professor of economics at the Indian Institute of Management, Ahmedabad; and as an economist at the Policy Group, New Delhi. He has a Ph.D. in economics from the Indian Statistical Institute, New Delhi where he also worked as a visiting lecturer and helped build a CGE model of the Indian economy. Dilip hosts People Move, a popular blog and can be followed on Twitter at @DilipRatha.

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Publication Search Results

Now showing 1 - 10 of 45

Sovereign Credit Ratings, Relative Risk Ratings, and Private Capital Flows
(World Bank, Washington, DC, 2020-09) De, Supriyo; Mohapatra, Sanket; Ratha, Dilip
This paper examines the influence of sovereign credit ratings and relative risk ratings on private capital flows to 26 emerging and frontier market economies, using quarterly data for 1998-2017. A dynamic panel regression model is used to estimate the relationship between ratings and capital flows after controlling for other factors that can influence capital flows, such as growth and interest rate differentials and global risk conditions. The analysis finds that while absolute ratings were an important determinant of net capital inflows prior to the global financial crisis in 2008, the influence of relative risk ratings increased in the post-crisis period, which was characterized by easy monetary policies and global liquidity, on the one hand, and greater caution and discretion on the part of investors on the other. The post-crisis effect of relative ratings appears to be driven mostly by portfolio flows. These findings imply that emerging and frontier markets need to pay greater attention to their relative economic performance and not just their sovereign ratings. Tracking changes in relative ratings could help predict macroeconomic disturbances resulting from volatile portfolio capital movements.
Remittances: Development Impact and Future Prospects
(Washington, DC: World Bank, 2005) Maimbo, Samuel Munzele; Ratha, Dilip; Maimbo, Samuel Munzele; Ratha, Dilip
Remittances explores policy options for enhancing the poverty alleviation impact of remittance money in recipient countries, and addressees concerns about increasing migration and inequality. It looks at new technologies that allow remittance service providers to reduce direct transaction costs and open new channels, enhancing convenience for remitters and improving levels of transparency and accountability for regulators and policy makers. Importantly, it also establishes a baseline for further research and collaborative effort, showing the areas where the international financial institutions, particularly the World Bank, can add value to enhance the positive impact of remittance flows and minimize less welcome effects.
Determinants of the Distance between Sovereign Credit Ratings and Sub-Sovereign Bond Ratings: Evidence from Emerging Markets and Developing Economies
(Taylor and Francis, 2017-07-05) Mohapatra, Sanket; Nose, Manabu; Ratha, Dilip
This article explores factors that affect the distance between sovereign credit ratings and the ratings assigned to new foreign-currency bonds issued by sub-sovereign entities (such as private non-financial corporations, financial firms, and public sector enterprises) in 47 emerging markets and developing economies. Censored and double-hurdle regression models are used to estimate the relative contributions of bond-level, issuer-level, and macroeconomic factors that determine this distance, separately for those rated at or below the sovereign rating and those rated above. For the three quarters or more of sub-sovereign bond ratings that are constrained by the sovereign rating ceiling, a Tobit regression model shows a smaller distance – suggesting stronger sovereign–corporate linkages – for public sector enterprises and financial firms relative to other firms. Riskier global financial conditions are also associated with sub-sovereign bonds being rated closer to the sovereign rating. For the small number of sub-sovereign bonds rated higher than the sovereign rating, a double-hurdle model shows that certain debt features – such as bonds backed by future-flow receivables or other collateral or structured as Special Purpose Vehicles (SPV) – significantly raise the likelihood of piercing the sovereign rating ceiling and also increase the distance above the sovereign ceiling.
Diaspora for Development in Africa
(World Bank, 2011-04-26) Plaza, Sonia; Ratha, Dilip
The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but also, importantly, through promotion of trade, investments, research, innovation, and knowledge and technology transfers. This book brings relevant experience from both developed and developing countries to bear on issues confronting today's governments in linking with their diaspora. The chapters present different approaches used by countries that have tried to maximize the possible gains from migration by engaging more comprehensively with different diaspora groups and individuals. Some African countries are pursuing policies to develop links with Africans abroad, either to encourage them to return or to use their skills, knowledge, or financial capital to foster African development. The book discusses concrete examples of diaspora initiatives that are being implemented in Africa. There are comprehensive reviews on how the diaspora can promote trade and investment linkages. Some developing countries are using dual citizenship to deepen ties with their diaspora. The book directly addresses the issues of remittances-linked financial instruments, investments by the diaspora, diaspora bonds, contributions of skilled and unskilled diaspora in transferring knowledge, analytical research on return migration, and concrete circular migration experiences. There is a need to have a better understanding of these initiatives and to see whether they can be scaled up or replicated in other countries worldwide.
Migration and Remittances during the Global Financial Crisis and Beyond
(Washington, DC: World Bank, 2012-06-01) Sirkeci, Ibrahim; Cohen, Jeffrey H.; Ratha, Dilip; Sirkeci, Ibrahim; Cohen, Jeffrey H.; Ratha, Dilip
Immigrants tend to be more negatively affected by economic crisis than natives, particularly when governments apply strict immigration controls. With the onset of the financial crisis in the latter half of 2008, there were widespread concerns: would migrants return to sending countries and communities in large numbers, adding further economic woes to countries already facing difficulties? Would remittance flows slow and potentially cease? The literature offers little guidance on these questions. It is always a challenge to collect data, analyze, interpret, and make recommendations as the phenomenon under study is still unfolding to reveal new turns and twists. The most recent financial crisis and its repercussions are yet to be completed, and scholars have only begun processing the event. This volume is an effort to bring together in one place fresh thinking and evidence from around the world on the outcomes of mobility in the context of global financial crisis. This book is perhaps the first comprehensive study of remittances during the financial crisis and is a timely addition to the literature. It comes at a time when countries are grappling with the global financial crisis and it's after effects. The resilience of remittances is good news for developing countries, but leveraging remittances for socioeconomic development remains a key challenge. The studies in this book identify and discuss key patterns observed in remittance practices across the world and possibilities for the future.
Migration and Remittances: Recent Developments and Outlook
(Washington, DC: World Bank, 2016-04-13) De, Supriyo; Ratha, Dilip; Plaza, Sonia; Schuettler, Kirsten; Shaw, William; Wyss, Hanspeter; Yi, Soonhwa
The April 2016 issue of the Brief provides an update of the detailed estimates of remittances for 2015 and new projections for 2016-18. A special topic for this brief is a discussion of how migration outflows, temporary return, and remittances help households and societies cope with natural disasters and epidemics.
Impacts of Sovereign Rating on Sub-Sovereign Bond Ratings in Emerging and Developing Economies
(World Bank, Washington, DC, 2016-03) Mohapatra, Sanket; Nose, Manabu; Ratha, Dilip
This paper explores bond-level, issuer-level, and macro-level conditions that affect the distance between sovereign credit rating and sub-sovereign debt ratings. Over three-quarters of rated foreign-currency sub-sovereign bonds issued during 1990–2013 in 47 emerging and developing countries were rated at or below the corresponding sovereign rating, thus confirming the prevalence of a sovereign ceiling. For bonds rated below the sovereign ceiling, a Tobit regression shows strong sovereign-corporate links for financial firms, publicly-owned firms, and local government entities. International bonds tend to be rated closer to the sovereign rating during riskier global financial conditions. Well-developed domestic financial markets also tend to be related to a smaller distance, likely because of stronger macro-financial links for financial issuers. About 11 to 26 percent of the bonds had ratings higher than the sovereign rating, which was achieved mainly through securitization structures. This observation is confirmed using a double-hurdle estimation that accounts for bond and firm characteristics and macroeconomic conditions. The sovereign-corporate rating relationship became significantly stronger at the peak period of the 2008-09 global financial crisis, and appears to have weakened in the subsequent years.
Does Governing Law Affect Bond Spreads?
(World Bank, Washington, DC, 2016-10) De, Supriyo; Ratha, Dilip; Kurlat, Sergio
Controlling for bond and issuer characteristics, bond spreads are expected to be equal across different legal jurisdictions, and differences are expected to disappear through arbitrage. However, an analysis of 435 U.S. dollar–denominated bonds issued by 53 emerging market sovereigns during 1990-2015 reveals that after the financial crisis of 2008, the launch spread of sovereign bonds issued under U.K. law has been higher than those issued under U.S. law, by 130 basis points for BB+ bonds and 175 basis points for B- bonds. This effect was not significant for investment grade bonds. On average, bonds issued under U.K. law had weaker ratings and shorter tenors post-crisis. The post-crisis impact of governing law on sovereign bond spreads is not explained by collective action clauses, or first-time bond issuances. Instead, the difference seems to be related to the perception that U.S. law offers stronger investor protection, and that the investor base for bonds issued under U.S. law is larger than that for bonds issued under U.K. law. The difference in spreads persists in the secondary market even after 180 days, perhaps because of the lack of liquidity, as investors tend to buy and hold these more attractive bonds on a longer term basis.
Impact of Remittances on Household Income, Asset and Human Capital: Evidence from Sri Lanka
(Taylor and Francis, 2012-10-25) De, Prabal K.; Ratha, Dilip
This paper explores the developmental impacts of international remittance income on the recipient households. The empirical analysis proceeds in two parts. In the first part, we show that remittance income largely accrues to the families belonging to the bottom quintiles of the income distribution helping the recipient families move up the income ladder. In the second part, we show that remittance income has positive and significant effect on children health and education, but not on conspicuous consumption or asset accumulation. We argue that remittance income is targeted better and not as fungible as other sources of transfer income, as the senders closely monitor it. We use bias-corrected matching estimators to control for self-selection issues.
Migration, Taxation, and Inequality
(World Bank, Washington, DC, 2012-05) Moreno-Dodson, Blanca; Mohapatra, Sanket; Ratha, Dilip
International migration is intimately intertwined with issues of taxation, inequality and public welfare benefits, both in home and destination countries. In home countries the emigration of workers, especially high-skilled workers, is often perceived to create a fiscal loss due to the cost of educating these workers and foregone tax revenues that may reduce the fiscal resources available for income redistribution. On the other hand, remittances, when well spent, can create multiplier effects and contribute to increasing domestic demand and growth, as well as increasing tax collections. In destination countries, immigration raises other challenges, especially when poor and undocumented workers are perceived as taking more from the government budget in the form of social welfare and health care benefits than what they contribute in the form of tax revenues. This note discusses some of the current issues around migration and taxation including how to compensate home countries for the fiscal losses of high-skilled emigration, how to bring immigrants into the tax system and make them net contributors, whether or not to tax inward, cross-border remittances, and designing appropriate tax incentives to encourage diaspora investment in the home country.