Livelihoods programs in displacement-affected communities are designed to stimulate economic activity, but their effects on social cohesion are ambiguous. This project, in partnership with IOM, studies the effects of an entrepreneur support program that offers a one-time grant of $2,000, approximately 90 percent of participants’ average annual income, to hosts, returnees, and IDPs in displacement-affected communities in Iraq. We ask two research questions. The first is whether and how economic recovery programs improve or erode social cohesion between hosts, returnees, and IDPs in post-conflict environments. To examine mechanisms linking economic and social inclusion, we study impacts on interdependence, economic opportunity, inequalities and grievances, intergroup contact, and competition for resources and services. The second research question asks how the livelihoods program indirectly affects community members proximate to beneficiaries through social or economic ties. By sampling entrepreneurs’ social and economic networks and mapping exposure to the program through network linkages, we identify indirect effects of the program on a broader population of community members. Overall, the study provides evidence on the multiple dimensions through which recovery programming affects economic and social well-being among displacement-affected communities.
Project pages:
J-PAL Displaced Livelihoods Initiative ·
NSF award SES-2417905
How does the uneven distribution of economic recovery affect social cohesion after war? While new economic opportunities can bind communities together, inequality may generate resentment among those left behind. We study a $2,000 capital grant program in post-conflict Iraq, measuring economic outcomes and seven dimensions of social cohesion. We designed a randomized controlled trial to identify the direct effects of the grants among beneficiaries and indirect effects on their first-degree social ties and professional peers. Beneficiaries experience large economic gains that strengthen over time (a 24.6 percentage point increase in business ownership and 0.81 SD higher business revenues by twelve months), alongside improved trust and reduced grievances and perceived competition toward their community. Early increases in trade, debt, and transfers between beneficiaries and their professional peers, consistent with local sharing norms, fade by twelve months. Social ties and professional peers report persistent directed grievance toward the specific beneficiary with whom they are connected (−0.21 SD for professional peers, −0.18 SD for social ties; q < 0.01 at both six and twelve months), but no changes in directed trust and contact allow us to rule out an overall deterioration in dyadic relationships. Their general attitudes and behaviors toward the broader community, including trust, civic engagement, and inclusion, are unchanged across both waves, with 95% confidence intervals excluding indirect exposure effects larger than 0.20 SD. These results show that the social cost of uneven recovery is concentrated in directed, tie-level perceptions rather than in non-recipients’ general attitudes.
Keywords: social cohesion; post-conflict recovery; capital grants; small and medium enterprises; randomized controlled trial; indirect exposure effects; grievance; trust; Iraq.
- Posted on:
- June 1, 2026
- Length:
- 3 minute read, 458 words
- Categories:
- Ongoing project
- Tags:
- social cohesion post-conflict recovery capital grants randomized controlled trial Iraq
- See Also:
- ML-based geographic sampling frames miss transitory populations in fragile regions
- Social and Distributional Effects of Capital Grants for Small and Medium Enterprises on Employers and Employees: Evidence from Post-War Iraq