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Jointly but Severally: Arab-Jewish Dualism and Economic Growth in Mandatory Palestine

Published online by Cambridge University Press:  03 March 2009

Jacob Metzer  and
Oded Kaplan
Jacob Metzer
Affiliation:
Jacob Metzer is Senior Lecturer in the Department of Economics at the Hebrew University, 91905 Jerusalem, Israel. Metzer and Oded Kaplan are researchers at the Maurice Falk Institute for Economic Research in Israel, Jerusalem.
Oded Kaplan
Affiliation:
Jacob Metzer is Senior Lecturer in the Department of Economics at the Hebrew University, 91905 Jerusalem, Israel. Metzer and Oded Kaplan are researchers at the Maurice Falk Institute for Economic Research in Israel, Jerusalem.
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Abstract

Newly estimated national accounting data for the Arab community are utilized to provide a comparative economic profile of the Arab and Jewish sectors in mandatory Palestine's dual economy. It is shown that the Arab economy grew substantially, but at a much slower rate than the Jewish economy. Productivity advance, however, seems to have made a significantly larger relative contribution to Arab growth. General and specific dualistic features of Arab-Jewish trade and their growth promoting effects are also explored, suggesting that the political conflict between the two communities played only a minor role in shaping their economic interrelationship and performance.

Type
Papers Presented at the Forty-fourth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 45 , Issue 2 , June 1985 , pp. 327 - 345
Copyright
Copyright © The Economic History Association 1985

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References

1 On these issues see Gross, Nachum T. and Metzer, Jacob, “Public Finance in the Jewish Economy in Interwar Palestine,” Research in Economic History, 3 (1978), pp. 87–160;Google ScholarMetzer, Jacob, “Fiscal Incidence and Resource Transfer between Jews and Arabs in Mandatory Palestine,” Research in Economic History, 7 (1982), pp. 87–132;Google ScholarGross, Nachum T., “The Economic Policy of the Mandatory Government in Palestine,” The Maurice Falk Institute for Economic Research in Israel, Discussion Paper No. 81.6 (revised; mimeograph, Jerusalem, 1981), and sources cited there.Google Scholar

2 The analysis is confined to the years 1922–1935 because the last decade of the British Mandate (1939–1948) was dominated by the interplay of short-run economic opportunities and constraints generated by World War II and by the instability that characterized the three years between the end of the World War and Israel's war of independence and statehood. Similarly, the last three interwar years were marked by disruptions of economic activity caused by the Arab general strike and riots. Although riots and clashes between Arabs and Jews occurred in 1921 and 1929 as well, they were relatively short-lived and minor in intensity in comparison with the violent three years 1936–1939.Google Scholar

3 See Halevi, Nadav, “The Political Economy of Absorptive Capacity: Growth and Cycles in Jewish Palestine Under the British Mandate,” Middle Eastern Studies, 19 (10 1983), pp. 456–69.CrossRefGoogle Scholar

4 See, among others, Halevi, Nadav and Klinov-Malul, Ruth, The Economic Development of Israel (New York and Jerusalem, 1968);Google ScholarSzereszewski, Robert, Essays on the Structure of the Jewish Economy in Palestine and Israel (Jerusalem, 1968);Google ScholarHalevi, “The Political Economy of Absorption”; and Ben-Porath, Yoram, “The Entwined Growth of Population and Product: 1922–1982,” The Maurice Falk Institute for Economic Research in Israel, Discussion Paper 84.06 (mimeograph, Jerusalem, 1984). Szereszewski, Essays; and Gross and Metzer, “Public Finance.”Google Scholar

5 Reichman, Shalom, “The Evolution of Land Transportation in Palestine 1920–1947,”, Jerusalem Studies in Geography (2nd issue, 1971), pp. 55–90.Google Scholar

6 See Abramowich, Ze'ev and Isaac Guelfat, The Arab Economy in Palestine (Tel Aviv, 1944; Hebrew), pp. 29–30.Google Scholar

7 See Sussman, Zvi, “The Determination of Wages for Unskilled Labor in the Advanced Sector of the Dual Economy of Mandatory Palestine,” Economic Development and Cultural Change, 22 (10 1973)., pp. 95–113;CrossRefGoogle Scholar and Metzer, Jacob, “Economic Structure and National Goals: The Jewish National Home in Interwar Palestine,” this JOURNAL, 38 (03 1978), pp. 101–19.Google Scholar

8 Meron, Rephael, “The Economic Development in Judea, Samaria and Gaza Areas 1970–1980” (Jerusalem, 1982), Bank of Israel Research Department; and Central Bureau of Statistics, Statistical Abstract of Israel 1983 (Jerusalem, 1984), chap. 27.Google Scholar

9 Per-dunam prices for land sold by Arabs to Jews were about £P6 in 1921 and £P23 in 1935; see Statistical Abstracts of Palestine 1939, Table 190. Given the high interest and mortgage rates (20 percent and above) observed in the Arab rural sector, one may view the price-yield based values as lower bounds of the true ones.Google Scholar

10 See Palestine, Department of Agriculture, Annual Reports, various issues 1923–1932; Great Bntain, Colonial Office, Palestine Report of High Commissioner, 1920–1925 (London, 1925); Abramowich and Guelfat, The Arab Economy;Google ScholarElazar-Volcani, I., The Fellah's Farm (Tel Aviv, 1930);Google Scholar and Metzer, Jacob, “Technology, Labor and Growth in a Dual Economy's Traditional Sector: Mandatory Palestine (1921–1936),” in Jorberg, Lennart and Rosenberg, Nathan, eds., Technical Change, Employment and Investment (Lund, 1982), pp. 159–70.Google Scholar

11 See Porath, Yehoshua, From Riots to Rebellion: The Palestinian-Arab National Movement 1929–1939 (Tel Aviv, 1978), pp. 105–36; Sussman, “The Determination of Wages”; Metzer, “Economic Structure” and “Fiscal Incidence.”Google Scholar