Refugee Economies (Book Review)

When most of us think of refugees, we probably consider the recent crisis stemming from Syria’s civil war, the resettlement debates in the United States and Europe, or we might even have a mental picture of a prison-like refugee camp in a remote part of a country. In many cases, onlookers tend to view refugees as burdens and/or victims in need of assistance and rescue. The international humanitarian response to various refugee crises reflects that mindset. However, a growing number of scholars are focusing on the personal agency and creative capacity of refugees themselves.

In “Refugee Economies: Forced Displacement and Development“, Alexander Betts, Louise Bloom, Josiah Kaplan, and Naohiko Omata build on the work of scholars like Eric Werker and ask, “What difference does it make, in economic terms, to be a refugee?” By conducting an ambitious survey and economic case study in Uganda, they argue that refugees inhabit a fundamentally different institutional context – “refugeehood” – than that of host populations (p. 46). This ultimately supports their primary argument: “refugees have complex economic lives” (p. 11). Refugees are not merely dependent victims, but adapt to “new regulatory environments, new social networks, and new markets” and are “consumers, producers, buyers, sellers, employers, employees, and entrepreneurs.”

Betts et al. are not alone in recognizing the creative and productive capacity of refugees (see Karen Jacobsen). Their unique contribution is the development of an analytical framework based on New Institutional Economics (NIE) – which examines how institutions, “rules of the game”, shape and limit the choices individuals can make (North 1990, pp. 3-4). Betts et al.’s institutional framework claims refugees live between the intersection of (1) National (Uganda) and International (UNHCR) Governance, (2) formal and informal economic sectors, (3) and between national and transnational economies (p. 9). As a result of these cumulative factors, refugees face different constraints and opportunities – a different range of choices – than their host populations (p. 48). They are NOT intrinsically different as people or economic actors.

Refugee Economies is strongest when it explores the intricacies of refugee economic activity in three Ugandan contexts. Three chapters examine the lives of refugees in urban contexts (Kampala), protracted refugee settlements (Nakivale and Kyangwali), and in an emergency relief settlement (Rwamwanja). These contexts are themselves different institutional environments that shape the opportunities and constraints refugees face. Each context shows that the refugee experience varies considerably, ranging from high levels of economic independence, low regulation, and low dependence on humanitarian assistance (urban), to low levels of economic independence, high regulation, and high dependence on humanitarian assistance (emergency relief settlement).

There are two main highlights from these chapters. First, their exploration of all three contexts shows extraordinary feats of adaptation, innovation, and agency on the refugees’ part. In Rwamwanja, economic activity started as people initially arrived, exchanging UNHCR rations for other goods with neighboring Ugandan villages (P. 151). And in Nakivale, refugees utilized a Community Technology Center (CTA) for entrepreneurial purposes when it was originally designed as an internet cafe, skills and educational facility (182). The authors suggest the refugee propensity for adaptation should inform the response of international agencies, encouraging a focus on “innovative capacities” rather than “vulnerabilities” (211).

Secondly, Betts et al. found significant differences in income by refugee nationality. Somali households obtained higher monthly incomes than did Rwandan, Congolese, and South Sudanese (pp. 204, 216). Contributing to this were extensive Somali national & transnational networks and a Somali Community Association (SCA). In Kampala, the SCA works with the Ugandan government and occasionally acts as a mediator between Somalis and the police (p. 93). Additionally, it encourages official business registration, runs an employment support network, and provides informal social safety nets, such as insurance (p. 94). The SCA is an adaptation to the institutional constraints in Uganda and of “refugeehood”, or within NIE, an organization. The authors do not explicitly make this connection, but in NIE, if institutions are the rules of the game, an organization is a team that works within the rules to “win the game” (North p. 5). The SCA understands the non-native position of Somalis within Uganda, and encourages them to work within the institutional constraints to create opportunities and thrive.

The book’s slight weakness is in its argument for the institutional distinctiveness of “refugeehood”. The case study incidentally makes a stronger case for the institutional distinctiveness of each setting (Urban, Protracted, Emergency) and its effect on the lives of refugees. Their argument regarding “refugeehood” is still fairly persuasive, but would have benefited from a systematic comparison with the Ugandan population (the host-population comparison is in the new report, Refugee Economies in Kenya). Access to finance was a major obstacle to the Congolese refugees (p. 209), but how does the average Ugandan in Kampala view access to finance? The Ugandan government does not enforce contracts for refugees in Kyangwali, but is contract enforcement better for villagers in the same area? If informal economic activity is the norm near Kyangwali, poor contract enforcement might reveal the state’s limited ability to broadcast power more than the refugee’s distinct institutional position.

The “refugeehood” argument does not fail. The inability for refugees to receive a bank loan, ambiguous interpretations by different governmental agencies regarding refugees’ “right to work”, refugee-based discrimination, and involvement from UNHCR are constraints/opportunities specific to refugees. However, the authors’ claim would have been stronger with a host-population comparison.

Betts et al. superbly document the economic life of refugees in Uganda, presenting a window into the daily challenges and opportunities refugees face in various contexts. This alone is worth the read as accurate descriptions of economic realities are necessary prior to making policy or providing recommendations. Their focus on markets and refugee capacity could allow for solutions that do not rely on the government or inter-government cooperation, but on the private sector, non-profits, and refugees themselves (39). While broad economic development is elusive to economists and aid practitioners, Betts et al.’s research provides insight into small solutions that tangibly confront some obstacles. The CTAs, for example, do not require sophisticated planning; yet provide refugees with the ability to access market information to reduce information asymmetry. The minor theoretical critique notwithstanding, this is an excellent place to start in understanding a small part of one of the globe’s largest challenges.

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