The Costs of the Israeli-Palestinian Conflict

The Costs of the Israeli-Palestinian Conflict

Despite repeated initiatives to resolve the conflict between Israelis and Palestinians, it has endured for decades with periodic violent eruptions. Can meaningful policy discussion help to break the impasse?

A RAND study estimates the net costs and benefits over the next 10 years of five alternative trajectories for the conflict, compared with the costs and benefits of a continuing impasse that evolves in accordance with present trends. The five trajectories are:

  • Two-State Solution
  • Coordinated Unilateral Withdrawal
  • Uncoordinated Unilateral Withdrawal
  • Nonviolent Resistance
  • Violent Uprising

The study's goal is to give all parties comprehensive, reliable information about available options and their expected costs and consequences.

A high-level overview of the findings are depicted in the chart to the right, which shows RAND's assumption-based estimates for the percent change in Israeli and Palestinian GDP (as of 2024) for each of the trajectories. A two-state solution provides by far the best economic outcomes for both Israelis and Palestinians, and a violent uprising would profoundly harm both economies.

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