The Palestinian Authority and the Rentier State

Abstract

This study is a theoretical and practical precedence in conceptualizing a rentier state in Palestine. It sets the possibility for understanding the underlying principles of the performance of the Palestinian Authority (PA) since its inception in 1994. It provides a platform for utilizing rentier state theory (RST) in a non-carbon state as a framework for analysing its political economy. More profoundly, it attempts to utilize RST in understanding the sate society relation under the complex political structural reality in Palestine. Firstly, the study makes the case for the gap in literature with regards to non-carbon based rentier states. It does so by providing a short history of literature and an overview of the sub-literature that followed with regards to conditional and specialized theories on the rentier state. Secondly, it elaborates on the PA's sources of income and debates whether they are rents. It categorizes rents in the Palestinian case to include international donations to the PA, and Israeli processed and controlled clearance taxes. Both sources amount to over 70% of the PA's expenditure. Thirdly, it proposes five characteristics that exemplify the non-carbon rentier state. It proposes that flexible neopatrimonialism, external imposed economic policy, active foreign policy contrasted by inactive internal policy, fragile tax collection system and unreliable financial flows, and rentier based economy best describe the non-carbon rentier state using the PA as an example.