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This paper examines economic aspects of the Arab Revolt of 1936-39, which was, beyond doubt, a national Palestinian revolt. It is suggested that, while the rebels, most of whom were peasants, acted collectively for national causes, many of them also perceived personal economic and rural collective interests in participating and acted to pursue economic and national goals simultaneously. This analysis helps explain why peasants comprised the main rebel force, why many of them were "landless" and from the poorest stratum of Palestinian rural society, why militias tended to be small, why banditry became dominant in 1938, and how economic motivations fueled an internal Arab-Palestinian civil war. [ABSTRACT FROM AUTHOR]

According to the British Government in Mandate Palestine, the tendency of the fallahin (Arab peasants) to "strategic default" and the monopolistic power of local moneylenders led to high interest lending in rural areas. The government sought to remedy this by assisting banks in collecting bad debts, by guaranteeing some bank loans and by imposing the maximum legal interest rate. However, the colonial perception was incorrect. Defaults were usually "involuntary" as a result of natural and occasionally man-made hazards (thus creating a high interest rate environment), and the moneylending market was "contestable." In such an environment, despite government assistance, moneylenders had a comparative advantage over banks. They were usually merchants who could easily utilise collateral on loans (crops and lands); they ignored the law of maximum interest rate and they had good information about borrowers. For these reasons moneylenders remained the main source of credit for the fallahin. [ABSTRACT FROM AUTHOR]

The accepted wisdom is that the mushā in Palestine was an archaic system that blocked any chance of development, since no one had any inducement to improve his land. But this study of the mushā, as part of a set of institutions, contradicts that wisdom. The mushā in Palestine was an efficient, dynamic economic institution that facilitated investment. There was no need for land reform, which only proved destructive to the economy of the fallāhīn. It nullified the advantages inherent in the system and, unexpectedly, facilitated the transfer of lands from Arabs to Jews. La vision généralement admise est que le mushā en Palestine était un système archaïque qui faisait obstacle à toute perspective de développement, puisque personne n'était incité à améliorer sa terre. Mais notre étude du mushā contredit cette vision. Le mushā en Palestine était une institution économique efficace et dynamique qui facilitait l'investissement. La réforme foncière qui abolit le mushā a été destructrice pour l'économie des fallāhīn. La réforme a annulé les avantages inhérents au système et, de façon inattendue, a facilité le transfert de terres des Arabes aux Juifs. [ABSTRACT FROM AUTHOR]