Fanning the flames: Rainfall shocks, inter‐ethnic income inequality, and conflict intensification in Mandate Palestine

Laura Panza and Eik Swee

Journal of Economic Behavior & Organization, 2023, vol. 206, issue C, 71-94

Abstract: We examine the effect of inter-ethnic income inequality on conflict intensification in Mandate Palestine, using a novel panel dataset comprising district-level characteristics and conflict intensity across 18 districts during 1926–1945. We instrument Jewish-Arab income inequality by combining the annual variation in rainfall shocks with cross-sectional variation in pre-Mandate crop intensity, to extract exogenous changes in inequality between non-agrarian Jews and agrarian Arabs. We find a substantial effect of inequality on conflict intensification, especially during periods where the relationship between Arabs and Jews were particularly strained. Our estimates are driven by Arab-initiated attacks, reflecting the local average treatment effects of Arab farmers who move from agrarian work to violence in response to adverse rainfall shocks; in other words, economic shocks coupled with existing economic segregation facilitate the transition into violence when opposing groups are economic substitutes. Further investigations suggest that inequality-driven violence was most likely an expression of resentment, rather than the result of opportunity costs or appropriation.

Keywords: Income inequality; Inter-ethnic conflict; Arab-Israeli conflict; Mandate Palestine (search for similar items in EconPapers)
Date: 2023
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Working Paper: Fanning The Flames: Rainfall Shocks, Inter-Ethnic Income Inequality, and Conflict Intensification in Mandate Palestine (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:206:y:2023:i:c:p:71-94

DOI: 10.1016/j.jebo.2022.11.032

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