Refugee Return and Conflict : Evidence from a Natural Experiment

We estimate the causal effect of a large cash assistance program for refugee returnees on conflict in Afghanistan. The program led to a significant increase in repatriation. Leveraging historical returnee settlement patterns and previously unreleased combat records, we find that policy-induced refugee return had cross-cutting effects, reducing insurgent violence, but increasing social conflict. The program's cash benefits were substantial and may have raised reservation wages in communities where returnees repatriated. Consistent with this hypothesis, returnee encashment had heterogeneous effects on insurgent violence, decreasing use of labor-intensive combat, while also reducing the effectiveness of counterinsurgent bomb neutralization missions. Additionally, kinship ties and access to informal institutions for dispute resolution significantly offset the risks of refugee return for communal violence. These results highlight unintended consequences of repatriation aid and clarify the conditions under which refugee return affects conflict. Building social capital and legitimate, local institutions are key antecedents for safe refugee repatriation