Innovative financing models could attract private investment to refugee resettlement programs, enabling countries to admit more refugees and set them up for success.
Refugee resettlement efforts are often stymied by the assumption that refugees are a burden—a view that leads to political fights over how that “burden” should be shared. In a new report for the Center on Global Development, IPL co-director Jeremy Weinstein and fellow researcher Cindy Huang explain how strategic investment in refugees can benefit host countries and enable them to welcome refugees in greater numbers.
Refugee resettlement is well worth investing in, they argue, because refugees benefit the communities receiving them:
Ignoring these (benefits) makes as much sense as ignoring the benefits of education when deciding how much should be spent on schools or teachers. A wealth of evidence— laid out in this report—shows that countries that resettle refugees are making a sound investment. Resettled refugees can contribute more to a country than the cost of resettlement to both government finances and society.
When governments underinvest in the programs refugees need to rebuild their lives and fully integrate into their new communities, resettlement efforts suffer:
If resettlement is seen as a cost to be minimized rather than a humanitarian investment that could yield a return, then governments have no incentive to spend more. This creates a vicious cycle. Underinvestment in refugees who are resettled leads to unfulfilled potential, limited returns, and therefore less appetite for further investment and resettlement.
The report goes on to propose financial instruments that instead create a “virtuous” cycle: “resettlement bonds”, in which “governments and donors would channel their existing refugee humanitarian payments into a fund that would attract up-front private investment,” and “social impact bonds,” in which “private investors provide the up-front capital needed to tackle a social problem” and “enter into a contract with an ‘outcome funder’ (usually a government) who agrees to pay them a return that depends upon the extent to which an outcome has been met.”
Read the full report here.