Political Economy of Collaboration

"For instance, at a time when Palestinian GDP has stagnated or fallen -- GDP fell 8% in 2006, was 0% in 2007, and was “constrained” in 2008 -- for the past several years, “aid” received by the PA for the first quarter of 2008 exceeded their sizeable budget deficit ($317m). (p. 11) The “surplus” aid ($208m) was 66% of the deficit (!) and was then used to “repay substantial wage and private sector arrears as well as loans and advances from the banking sector.” (p.6) Thus, money originating outside of Palestinian society is distributed to favored sectors (bankers, and civil servants who execute the commands of the PA) of that society. Moreover, relative to the size of the (highly aid-reliant) economy, “aid” support is quite generous. Importantly, aid is mostly NOT productively spent, for example on investments in agriculture or on infrastructure. There, most projects have been and are on hold due to donor “security concerns” over the situation in Gaza. (p.36.) The report indicates that the only sector to receive an increase in support from donors is the “Governance Sector” which includes “security reform and transformation.” Table 6 shows that “governance” is overwhelmingly “security” which includes coordination between the various “forces” that constitute it. (There seems to be one for each fiefdom / officeholder.) Moreover, these same “forces” that help with “governance” seem to have a problem with accessibility (due to Israeli blockages and destruction of infrastructure after the Second Intifada) to areas B and C for law enforcement. Naturally there is no “governance” connection with Gaza, due to the “absence of a functional Palestinian Legislative Council.” Had it been present, the PA claims there would have been more progress on financial “accountability” and “transparency” reforms. (pp. 20-1, 23.) Given the nature of this “aid,” it is revealing that “accountability” in this case, refers not to the PA’s accountability to its own population that elected the Legislative Council, but instead, refers to the donors." (thanks Olivia)