RAND corporation study examines benefits to Israeli, Palestinian economies that could result from a peace agreement.
If Israel and the Palestinians were able to make peace, Israel\’s economy would grow by an additional combined $123b over a decade, according to a study released Monday by the RAND corporation.
The study, entitled "The Costs of the Israeli-Palestinian Conflict," examined the budgetary and economic costs of five different conflict-related scenarios from 2014 to 2024–a two-state solution, a coordinated unilateral withdrawal, an uncoordinated unilateral withdrawal, Palestinian nonviolent resistance, and a violent uprising–and compared them with a baseline scenario.
The scenarios included estimates of direct costs such as budgetary spending or the costs associated with violence, and opportunity costs such as investment and new market opportunities. Each of the scenarios had implications on issues as wide-ranging as the costs of banking regulation and the cost of instability and uncertainty. The online version of the study provides a handy calculator that lets users fiddle with the assumptions of each scenario.
"For Israel, the primary direct costs stemming from the conflict include budgetary expenditures on settlements and security—e.g., military mobilizations. The largest opportunity cost is the impact of perceived instability in Israel on its investment and economic activity," the report said.
The study estimated, for example, that Israel\’s government spends more than 2% of its budget on settlements around Jerusalem and in the West Bank.