A novel model of forced displacement management that has emerged in the post-2011 Middle East concerns the introduction of “refugee compacts”. Aiming to transform a broken refugee system by supporting displaced persons’ integration into the host-state job market, refugee compacts involve multi-billion-dollar investments in Jordan and Lebanon, with similar schemes currently being developed and introduced across the broader Middle East. While these interstate agreements have been habitually portrayed as success stories or “win-win” strategies that transform forced displacement crises into developmental opportunities, little has been written on their consequences for host states of first asylum. In order to amend this gap, this paper takes an interdisciplinary approach that builds on political science, migration studies, as well as Middle East studies in order to identify the socio-political effects of the Jordan and Lebanon refugee compacts. The paper adopts a postcolonial lens in order to argue that these arrangements have encouraged the commodification of forced displacement in states’ policy-making processes along three dimensions. Firstly, they create novel ties of dependency to Western donor states that are augmented by complex conditionality mechanisms attached to this economic aid. Secondly, they encourage host-state elites to skew their policies with a view to attracting external funding, particularly via the production of alarmist narratives of collapse. Finally, they provide a moral justification for an economistic management of forced displacement that enables local actors to seek material profit from local refugee populations. The paper builds on expert and elite interviews in Amman and Beirut, including government officials as well as NGO and civil society representatives. It offers a critical analysis to increasingly-popular attempts at solving the refugee burden-sharing problem both in the Levant as well as the broader Middle East and provides important implications around the perils of refugee commodification.