There is growing recognition of the challenges faced by internally displaced people as well as the potential for subnational actors to contribute to durable solutions. Despite this, we know little about local government responses, both in theory and practice. This paper draws on governance theories, practitioner experience and secondary literature to analyse the governance context, processes and interactions that shape the experience of internal displacement in eastern Ukraine between 2014 and 2022. It argues that nascent relationships built between internally displaced people and local governments in eastern Ukraine reveal the possibility of bottom-up state-led responses. The paper intervenes in debates around rebuilding a “social contract” as a mechanism for resolving displacement, demonstrating why attention must be paid to how this occurs at local levels in places of refuge.