The persistent urbanising effect of refugee camps: evidence from Tanzania, 1985-2015

With the rise of forced displacement, attention has turned to the economic impact of refugees. However, few studies investigate long-term impacts. We use data for Tanzania for the period 1985-2015 to examine the effect of camps on urbanisation and local development, exploiting a unique satellite-derived dataset of high spatial resolution and temporal frequency. We show a modest but significant effect of refugee camps on built-up area up to a 100 km distance. We then match camp locations to regional gross domestic product, local consumption spending and employment patterns. Output in areas with camps grew at a faster rate during camp operation, but closure of camps was associated with change in economic activity. Activity induced by camps is largely in non-tradeable goods and services rather than inducing longer run structural transformation.