ABSTRACT
The historic significance of the Oslo Agreement signed by the Palestinian Liberation Organization (PLO) and Israel in 1993 was that this was the first time that Israel formally recognized, even if only in part, the national aspirations of the Palestinian people. Many Palestinians believed that Israel had implicitly accepted the necessity of creating a fully fledged Palestinian state on 1967 borders. But the exercise eventually ended in the failure of Camp David and the commencement of the Second Intifada of 2000. Our analysis of Palestinian state formation in the period after 1994 identifies a number of key external and internal factors that contributed to the eventual failure. The Road Map announced in 2003 retained many of these damaging elements, without enjoying the goodwill or the relative political stability that made Oslo appear so promising at the time. Thus, the impasse reached in 2000 raises questions of great importance for the future. Was the failure due to poor Palestinian governance, poor leadership on one or both sides, or the economic and political relationships that Israel sought to construct with the emerging Palestinian state under the aegis of Oslo? In particular, what role did the quality of governance as measured by corruption, rent-seeking and the weakness of democracy within the Palestinian Authority play in the eventual crisis? These questions are not just important for the historical record; they are critical for assessing the prospects of constructing a viable Palestinian state in the future.
