Member in the News: J. Edward Taylor

Research: Refugees Can Bolster a Region’s Economy

The world’s refugee population has increased sharply in recent years, leading governments to argue over which countries should take in people displaced by war or other calamities. At the core of this debate is cost: refugees are usually considered an economic burden for the countries that take them in. Thus the argument usually comes down to one side arguing that the cost is too great, and the other side arguing that humanitarian need outweighs the cost.

But research I’ve conducted, as well as studies done by others, shows this central assumption may be wrong: helping refugees doesn’t cost as much as we think it does. In fact, when refugee camps are managed well, helping refugees can help both displaced people and local economies. In one of the camps we studied, the economic activity associated with the refugee camp increased per-capita income for the host community by as much as a third.

UC Davis teamed up with the United Nations World Food Programme (WFP) to assess the economic costs and benefits of three Congolese refugee camps in Rwanda operated by the United Nations High Commissioner on Refugees (UNCHR). The study, published in the Proceedings of the National Academy of Sciences, used econometric analysis with data from local surveys and local economy-wide modeling to simulate the impact of refugees on the host-country economy within a 10-km radius of each camp.
We found that Congolese refugees in Rwanda generate considerably more income than the WFP aid they receive. Moreover, we found two factors that can considerably help both refugees and the communities hosting them.

Lesson 1: Give cash, not food

In two of the camps we studied, refugees receive WFP food aid in the form of cash, while in the third camp the refugees receive the same value of aid but in donated food. At all three camps, refugees are allowed to leave and re-enter their camps at will, transact with host-country businesses, run their own businesses, and perform wage work inside or outside the camps. The camps we studied range in size from 14,774 to 18,614 inhabitants, in districts with populations ranging from around 126,000 to 183,000.
We find greater economic benefits for the host country when refugee food aid is in the form of cash rather than food. The benefits are greatest around a cash camp located in a relatively good agricultural area with ample food supplies and jobs that match the skill set most refugees have.

Read J. Edward Taylors entire article in the Harvard Business Review HERE: https://hbr.org/2016/10/research-refugees-can-bolster-a-regions-economy