​Political and economic grievances are a key source of animosity between groups but little systematic evidence exists on the sources of such grievances. This paper provides direct evidence on the genesis of grievances between groups by examining whether the presence and growth of Israeli settlements in the Palestinian territories have had any influence on Palestinian attitudes towards the conflict and towards Israel. We find that both the presence and the expansion of formal Israeli settlements caused a significant radicalization of the Palestinian attitudes towards the conflict. This effect holds in different periods spanning over a decade and a half and is robust to the use of different estimation methods, identification strategies, dependant and control variables. The results indicate that an addition of one thousand settlers located within one kilometer from a Palestinian locality reduces the locality’s support for more moderate factions by between 0.5 and 0.6 percentage points. We argue that this effect is key to explain the victory of the radical faction Hamas in the 2006 elections. At the district level the same change in settlers’ population increases the probability of a Palestinian supporting violence against any Israeli target by 1.5 and against Israeli civilians (including also the settlers) by 4 percentage points. We provide suggestive evidence that it is mainly the increased competition for scarce natural resources, particularly land and water, that drives the radicalization effects of the settlements.

Massimiliano Calì and Sami H. Miaari