In the past two decades, remittances have overtaken official development assistance to developing countries while eclipsingother vehicles of development such as foreign direct investment. This begs the question of how these multinational transfers between households are affecting the role of governments in matterspertaining to poverty alleviation. This project will answer this question by analyzing what the effects of remittances and levels of democracy have on government social spending in CentralAmerican countries. This project hypothesizes that as remittancesincrease, the level of social spending in those countries will decrease and that this effect will be stronger in more autocraticsocieties.