Remittances and National Peace: The Conditional Roles of Institutional Quality and Income Inequality

Abstract

International remittance flows represent one of the largest sources of external finance for many developing economies, yet their relationship with political stability remains contested. While some studies suggest that remittances are associated with improved household welfare and stability, others indicate that they may coincide with higher levels of unrest or insecurity. This paper examines the relationship between remittance inflows and national peace outcomes using cross-national panel data covering 115 countries from 2008 to 2024. The analysis focuses on the Global Peace Index (GPI), a multidimensional measure capturing domestic security, internal conflict, and militarisation. The study argues that the remittance–peace relationship is conditional rather than uniform and varies across institutional and distributional contexts. Using fixed-effects and dynamic panel estimators, the findings suggest that remittances are positively associated with GPI scores on average, indicating lower levels of peace. However, this association appears weaker in countries characterised by stronger institutional environments and stronger in societies with higher levels of income inequality. Rather than establishing definitive causal effects, the analysis extends existing cross-national research by examining how the remittance–peace relationship varies across institutional and distributional contexts.