UCLA International Institute

Migrant hometown associations (HTAs) are mobilizing collective remittances to improve social welfare in their countries of origin. This paper assesses the effect of transnational coproduction of public goods in migrants’ places of origin by studying the 3x1 Program for Migrants. The 3x1 Program is a national social spending program in which the Mexican local, state and federal government matches HTAs’ collective remittances to improve public services through cross-border public-private partnerships. The statistical analysis across municipalities that do and do not participate in the 3x1 Program shows that coproduction improves citizens’ access to public sanitation, drainage and water, although not electricity. Moreover, a negative and statistically significant interaction term between 3x1 Program expenditures and family remittances reveals a substitution effect: in the presence of transnational coproduction, migrant households are less likely to improve public goods using family remittance resources, but in the absence of 3x1 Program participation they continue to improve their hometowns with family remittances. This research offers a theoretical mechanism and supporting empirical evidence of an important kind of intermediary institution improving social welfare in migrant places of origin.