Strategic Assessment

The consistent declarations by Prime Minister Netanyahu about the potential impetus that “economic peace” can give to negotiations over a permanent settlement between Israel and the Palestinian Authority are informed by studies of commercial liberalism. This article contends that formal models and empirical data notwithstanding, it is still difficult to argue persuasively that increased economic cooperation between Israel and the PA and the creation of conditions conducive to economic growth on the West Bank can pave the road to political peace.