04/05/2017 07:28 BST | Updated 04/05/2017 07:29 BST

Rethinking Refugee Policy

The number of refugees, asylum-seekers and internally displaced people around the world topped 65 million in 2016, according to estimates by the UNHCR and it has recently been announced by the UN that there are more than 5m Syrian refugees in neighbouring countries.

A very important issue has been largely sidelined in the current debate on the ongoing refugee crisis, is that evidence suggests that how these refugees are treated today will have important consequences for the economic and political stability in Europe, the Middle East, and elsewhere in the future.

The challenge of how best to deal with the current Middle East refugee situation is not confined to Europe. In the US, Trump's executive orders emphasise short-term American security interests. However, there are long-term impact for refugees from the six countries on the anti-immigration 'list' as these actions will create repercussions for which will last for decades to come.

It is the children who are especially vulnerable when it comes to war and the refugee crisis. According to a recent report from the Council of Europe's special representative on migration and refugees, Tomáš Boček, Europe's "abysmal" treatment of refugee children will only increase the danger of their later radicalisation and drift into criminality. About 30% of asylum seekers arriving in Europe in the last two years were children, and almost 70% of these were fleeing conflict in Syria, Afghanistan and Iraq. Academic literature on conflict shows that, the longer and more extensive its human suffering, the harder it is for a country to escape the vicious re-occurring cycle of war.

First of all, trust breeds trust and mistrust breads mistrust. This was something discussed in "War Signals: A Theory of Trade, Trust and Conflict", a paper I co-authored with Mathias Thoenig and Fabrizio Zilibotti. We showed how positive interaction leads to more inter-group trade and trust, which helps to further foster cooperation. In contrast, conflict destroys trust, lack of trust makes inter-ethnic or inter-religious business harder to sustain, and fewer trade links reduce the incentives to try hard to stick to peace in the future.

In other words, a child from Syria growing up in the USA will typically develop a higher level of trust and inter-cultural understanding than if he or she spends their childhood in destroyed buildings hiding from missiles rather than attending school - and that's not withstanding the indisputable physical and psychological harm, such as post-traumatic stress disorders.

Furthermore, my current research confirms that poorly-educated and less healthy people have lower productivity and job market chances, making it harder to escape poverty, which in turn lowers the opportunity cost of engaging in political violence. Child refugees who are given the chance to experience a stable democracy during childhood are the best pillars of society and ambassadors of values of tolerance and peace.

If governments were to adopt more humanitarian policies not only would it save thousands of lives, but it would also plant the seeds for future stability in currently war-torn societies. This can help to prevent a lost generation of children knowing nothing else than war, hunger and misery, who will be ill-prepared to play a positive role in post-conflict reconstruction.