Camps for people uprooted by natural disasters or armed conflict inside their own country can stir envy among locals and become a recruiting ground for armed groups, the International Committee of the Red Cross warns.
In many cases displaced people are better housed in towns and villages, the ICRC said in a 22-page report released Thursday in Geneva.
Creating camps that can dwarf surrounding towns should be a last resort, as the health services, food and housing provided by aid agencies may draw people who would otherwise stay in their homes.
The analysis is unusual for the ICRC, which provides shelter and services to about 3.8 million displaced people around the world.
"Having sought for years to establish minimum standards to improve the quality of assistance in calamity and conflict, humanitarians now wonder about the maximum," the agency said.
An estimated 26 million people worldwide are considered "internally displaced" after leaving their homes for camps or the apartments and houses of friends and family in the same country. Congo, Iraq, Pakistan and Sudan have particularly high numbers of internally displaced people.
People who are in camps for too long may find it much more difficult to reintegrate into their natural environment, ICRC president Jakob Kellenberger told a news conference in Geneva.
That is a major problem for aid groups, which see camps as a temporary solution to a refugee or displacement crisis. Yet, in countries such as the Philippines, Sri Lanka and the Palestinian territories, many people have languished in camps for years.
The ICRC noted that in Sudan's Darfur region, ethnic segregation inside camps was common and armed opposition groups were present in some.
Camps also risk becoming the focus of world attention, drawing resources away from displaced people living elsewhere who are also in need of help, the agency said.