Remittance Cost and Global Peace - Globalization

Data is sourced from Institute for Economics and Peace, Dreher (2006), and word bank (World Bank. (2024b); World Bank. (2024c)). First, for each year between 2011 and 2025, an initial bilateral “seed” matrix is generated by interpolating between the observed bilateral matrices for 2014, 2018, and 2021. Corridors that appear in at least one benchmark matrix are retained and interpolated over time, while corridors that are absent in all benchmark years are treated as structural zeros and excluded from the bilateralization process. Second, the interpolated seed matrices are adjusted using Iterative Proportional Fitting (IPF), combined with temporal smoothing, to ensure consistency with observed aggregate remittance totals (Deville et al., 2014). The IPF procedure scales bilateral flows iteratively so that, for each year, row sums exactly match total remittances paid by each country and column sums match total remittances received. This approach preserves the observed aggregate information while generating internally consistent bilateral remittance matrices for all years in the sample.