DP12154 Middleman Minorities and Ethnic Violence: Anti-Jewish Pogroms in the Russian Empire

Author(s): Irena Grosfeld, Seyhun Orcan Sakalli, Ekaterina Zhuravskaya
Publication Date: July 2017
Date Revised: November 2018
Keyword(s): Climate Shocks, conflict, Ethno-occupational segregation, Jews, Middleman minorities, Pogroms, Political uncertainty
JEL(s): J15, N33, N43, Z12, Z13
Programme Areas: Public Economics, Development Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12154

Using detailed panel data from the Pale of Settlement area between 1800 and 1927, we document that anti-Jewish pogroms---mob violence against the Jewish minority---broke out when economic shocks coincided with political turmoil. When this happened, pogroms primarily occurred in places where Jews dominated middleman occupations, i.e., moneylending and grain trading. This evidence is inconsistent with the scapegoating hypothesis, according to which Jews were blamed for all misfortunes of the majority. Instead, the evidence is consistent with the politico-economic mechanism, in which Jewish middlemen served as providers of insurance against economic shocks to peasants and urban grain buyers in a relationship based on repeated interactions. When economic shocks occurred in times of political stability, rolling over or forgiving debts was an equilibrium outcome because both sides valued their future relationship. In contrast, during political turmoil, debtors could not commit to paying in the future, and consequently, moneylenders and grain traders demanded immediate (re)payment. This led to ethnic violence, in which the break in the relationship between the majority and Jewish middlemen was the igniting factor.