Many public policies create (perceived) winners and losers, but there is little evidence on whether redistribution can support new political economy equilibria that raise aggregate welfare. We study a Ugandan policy that redistributes 30 percent of foreign aid for refugees to Ugandans while allowing refugees to work and move freely. To test whether compensation influences support for refugee integration, we randomly distribute cash grants to natives that are explicitly labeled as aid shared from the refugee response. We find substantial impacts on policy preferences that persist for at least two years and work through changing beliefs about the economic effects of refugees on Ugandans. Sharing information about public goods funded by the refugee response but not providing a grant has smaller, though still significant, effects. In contrast, we find initially positive impacts of intergroup contact—implemented as business mentorship by an experienced refugee—but these impacts do not persist. Our results indicate that economic interventions can shape policy views even on issues greatly influenced by cultural concerns, such as immigration.
This paper was originally published in May 2023. It was updated in December 2023. The original version can be viewed here.
