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The economy of a Refugee Camp

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Friday, 15th December

According to Werker (2007), there is no typical refugee camp economy, but a broad picture can be painted, illustrated with data gathered from previous descriptive research on refugee camp economies. Refugee settlements may be more like cities than camps (Pérouse de Montclos and Kagwanja 2000), for settlement economies tend to be rich and varied. The primary economic actors are the refugees, many of whom come with productive capabilities, access to commercial networks and capital of some sort. There may also be nationals living among the refugees, taking advantage of business opportunities in the camp or posing as refugees to benefit from humanitarian aid. Humanitarian agencies and the host government supply private and public goods to the refugees, often including food, medicine, shelter, sanitation, education and security. Refugees achieve their livelihoods from agricultural production, wage labour, small businesses, outside remittances, lending/investing and humanitarian rations. Typically, a camp will have one or more trading centres where small businesses are concentrated in addition to organized markets for trading in locally-produced and imported goods.

No camp is totally closed to traffic in goods, capital and people; as such, the markets in the camp are connected with domestic (and therefore international) markets through refugee and national traders. Moreover, given the refugees’ connection with their home country, the camp economy may have strong links to markets in the refugee-producing country. Finally, due to the nature of law enforcement within the camp and the composition of the refugee population, the camp may also have strong ties to grey and black markets in the host country and abroad—a manifestation of the ‘transborder shadow economies’ that Duffield (2001) describes as characterizing the political economy of post-Cold War conflict.

Conceptualizing the Refugee Camp economy

Basing on the example of Kyangwali Camp, Werker sets a model intended to serve as a lens to understand any camp economy (Werker, 2007). According to this model, several distorsions affect the camps economies:

Host country policies

Refugees, in general, receive different treatment from nationals in the country of asylum. Host country policies can be divided into two categories, restrictions and benefits.


Refugee camps can be isolated in a variety of ways. The most obvious is physically.

Humanitarian assistance

One important distorting characteristic of humanitarian aid is that it is typically delivered disproportionately to refugees living in the camps, even in countries that permit refugees to self-settle.

Camp demographics

The population makeup in a refugee camp is unlikely to mirror the population of the refugee-producing country. Depending on the nature of the conflict, certain members of the refugee-producing country will find higher costs to staying put, higher benefits to becoming a refugee, and/or lower costs to flight. If the conflict targets a particular ethnic group, for example, we should expect that ethnic group to be proportionally better represented among the refugee population than among the sending population. Likewise, if the opportunities for education are better for refugees, we should expect those members of the refugee-producing country with stronger preferences for education to be better represented. Moreover, becoming a refugee implies a certain savvy and access to information networks, as well as the ability to afford the journey.

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