The Political Economy of the Gaza Strip By Amit Leventhal and Dr. Sami Miari

1.11.19

The economy and standard of living in the Gaza Strip are heavily dependent on the ability of people and goods to enter and exit the region. Since Hamas took control of the Gaza Strip, Israel has implemented various military policy measures aimed at countering Hamas' political violence, including military attacks and restrictions on the movement of people and goods in and out of Gaza ("the Gaza blockade"). There are two differing views on the effectiveness of this policy. According to the first view, the military approach will create deterrence, isolate Hamas, and turn the Gaza residents against it. The second view suggests that this policy will backfire and lead to an escalating cycle of violence. However, no quantitative analysis has ever been conducted on the impact of Israel's policies on Palestinian public opinion in the Gaza Strip.

To support this argument, a quantitative analysis was conducted to examine the relationship between Israel's military policies and Palestinian support for extremist factions, who advocate for violent struggle against Israel and oppose the two-state solution (such as Hamas), versus support for moderate factions who support this solution (such as Fatah). We isolate this effect by comparing public opinion differences between the West Bank and Gaza before and after the implementation of these policies (a method known as "difference-in-differences"). To do this, we use detailed data on the economic situation, public opinion, and the intensity of the Israeli-Palestinian conflict in both the West Bank and Gaza Strip. Our findings suggest that not only has Israel’s policy not turned Gaza's residents against Hamas, but it may have led to the opposite effect. A resolution to the conflict and the reconstruction of the Gaza Strip will need to include both a change in policy, removing restrictions on the movement of people and goods, and the rebuilding of its public and political institutions.