In pursuing its central political objective to control and lead the Palestinian Arab quest for statehood, the Palestinian Authority (PA) headed by Mahmoud Abbas is delighted to have multiple countries endorse two-state solution. Affirming the PA’s political authority over the West Bank, as bestowed by the international community is a singularly valuable success for Abbas, the West Bank governing elite, and the system of cronyism that was established before Abbas became PA President. In the broader competition with Hamas for the political direction and ideological leadership of the Palestinian Arab national movement, a struggle that began already in the late 1980s, PLO Chairman Yasser Arafat battled to sideline Hamas as viable entity that would drive, steer and control the Palestinian political future. Upon Arafat’s death in 2004, Abbas took the reigns of PA control, established out of the PLO as a result of the 1993 Oslo Accords. Hamas and the PLO have fought with each other physically and politically for the leadership of Palestinian politics, both seeking anointed legitimacy from the international community, including a decade-long massive political embrace of Hamas by former President Jimmy Carter.

The five Hamas-Israel wars since 2007, including Hamas’ brutal attack on Israel on October 7, 2023, greatly elevated Hamas’ popularity among all Palestinians, most importantly that Hamas was using armed struggle and inflicting casualties on Israelis, while re-centering the Palestinian issue on Middle Eastern and international political agendas. The PA and Abbas were sidelined by Hamas’ daring actions. Since spring 2025, Abbas and the PA have clawed themselves back to prominence among Palestinians, with the caveat that only 15% of Palestinians, according to 2023 polling data by the Palestinian Center for Policy and Survey Research, support Abbas and his leadership elite in Ramallah. Whether there is an evolution toward a Palestinian political horizon or not, the PA and Abbas are most pleased that they have become the unequivocal political partner for the international community with its pressure to push Israel into a process of evolving Palestinian self-determination. While many countries had recognized a Palestinian state, the emphatic reassertion of that objective at the United Nations with French President Emmanuel Macron’s September 22, 2025, emphatic speech and the U.N. General Assembly’s vote September 12, 2025, in favor of a Palestinian state solidified and confirmed the PA as the central address for future Palestinian governance.

In a broader view on the influence and power of the PA, according to academic scholarship and Arab media reporting, a small West Bank Arab elite has entrenched itself since the 1990s shaping and controlling the levers of power and patronage. Ensuring the elite’s influence is the use of external funds that flow into its coffers as the Palestinian Authority, and the dispensing of those funds through patronage and cronyism. The international community’s endorsement of the PA is a boon to Abbas, members of his family and others. This a key conclusion of the article noted here and supported by dozens of other Arab writers. 

Historically, rule by a Palestinian few over the majority population goes back more than a century to Ottoman (Donna Robinson Divine, Politics and Society in Ottoman Palestine: The Arab Struggle for Survival and Power, 2023). During the time of the British Mandate, 1920-1948, Palestinian Arab politics was singularly dominated by Hajj Amin al-Husseini, the Mufti of Jerusalem. Indeed he shared influence with specific families and elite groups that he favored with patronage and money, holding enormous sway over the majority population. He became an expert in patronage cronyism; he concentrated power in his hands, used funds from religious endowments, and systematically undermined institutions that threatened his control over the emerging Palestinian Arab national movement. The 1978 Camp David Accords and the 1993 Oslo Accords promised Palestinian self-rule, not self-determination, over the West Bank and Gaza Strip. Israeli prime ministers, including Menachem Begin, Yitzhak Shamir and Yitzhak Rabin, collaborated with relatively few leaders in the West Bank or Gaza Strip to sustain cooperation with Jerusalem. The collaboration benefitted both Israel and the Palestinian leadership, including Arafat and then Abbas. In the Gaza Strip, from 2007 forward when Hamas solidified control over the Strip, it applied a similar style of autocratic governance, using hundreds of millions of dollars supplied by external sources to solidify internal control. 

Subsequent to the signing of the 1993 Oslo Accords, the PA and Israel signed additional agreements, particularly Oslo II in 1995, detailing how the PA would govern in the West Bank and the Gaza Strip, and acknowledging that Israel would remain the source of authority for these areas. Arafat used the Oslo Accords to bring 100,000-plus Palestinian loyalists from Tunis, Beirut and Amman to populate and staff the bureaucracy, police and security services. He transplanted his autocratic PLO leadership style from Tunis and earlier from Beirut to the West Bank and the Gaza Strip. At the same time, he followed through with the promise to conduct Palestinian elections to elect a self-governing authority. Those elections occurred on January 20, 1996, and in two elections, one for president and one for the Legislative Council, in January 2006. In the second election, Hamas secured a majority (74) of the 132 seats, which led to an international boycott of the Hamas-led government. Elections were scheduled for 2021 but were postponed by Abbas. For the first election, I was an election observer in one of several international delegations (the Carter Center), roving about the Ramallah area, visiting 19 polling places. 

Before those 1996 elections, enormous hope and expectation swirled about the possibility of Palestinians actually voting and then participating in self-rule. US NGOs and Republican and Democratic Party entities invested large sums of money, devoting time to work with Palestinians in the territories in enriching their understandings of civic society and the nitty gritty of carrying out elections. After Arafat’s election as president, where he won 88% of the vote, and an 88-member Palestine Legislative Council was elected, Arafat for the next six years slowly neutralized the power of the PLC. He checked its control over a system of autocratic rule that he applied via overlapping mechanisms. He created multiple security agencies, appointed ministers, judges and others, provided permits, and, critically, centralized the flow of external donor funds into accounts under his discretion. Holding internationally sanctioned elections rubber-stamped his legitimacy. He suppressed or intimidated opponents, coopted others through patronage appointments, awarded business licenses and contracts. At a meeting that our election observer group had in Jerusalem after the elections, I said to Carter, “I think the Israelis are smart enough to use Arafat as their (western) sheriff for managing the territories while they do what they want with them.” His response was immediate: “You are wrong, Ken. He is moving them toward self-determination.”

Arafat understood that the levers of power, patronage, cronyism and control stemmed from a combination of personal prestige fueled by month. When Arafat died in 2004, Abbas headed the PA and undertook similar means to keep a small elite in control of the West Bank’s administration, an administration that has roundly been criticized in the Palestinian Arab press for its corruption and multiple promises to carry out reform, but not doing apparently doing so. Abbas is 89. In 2025, there is debate about who will succeed him and whether a new Palestinian leader or series of leaders will deviate from the elite cronyism that has personified Palestinian rule from Ramallah since the 1990s, and in similar ways for more than a century. Is there evidence in September 2025 that the international community that is seized by a two state solution is aware of the depth of corruption and cronyism that Palestinian writes themselves say dominates West Bank governance? 

The material provided here describes how Arafat and his elites used their positions of power to solidify rule with foreign funds. Segments of the article quoted here, “Profit over Palestine: Cronyism, Monopolies, and Patronage,” were authored by Tariq Dana and Rami Salameh, Geneva Graduate Institute Publications, pp. 51-72. Their findings are a book chapter in an edited work by Riccardo Bocco and Ibrahim Said, Decolonising Palestine: Contemporary Debate (OpenEdition Books, May 2025). See also Tariq Dana, “Corruption in Palestine: A Self Enforcing System,” Al-Shabaka-the Palestinian Policy Network, August 18, 2015.

The following is a summation of a chapter summary written by the authors in the first cited article; no publication date is provided. It is only a representation of some of the paragraphs int their scholarly work. We refer readers to view the entire article. All the material found in the rest of this summary, detail and analyses were written and provided by the authors. The first paragraph is a summary provided by the authors.

— Ken Stein, September 26, 2025

“The chapter examines the political economy of cronyism and patronage that define the Palestinian Authority’s relation with a handful of private businesses in the Occupied Palestinian Territories. A closer investigation into this relationship suggests that the political-economic network that was forged and nurtured by the Oslo process, and by the manipulative practices of Israel and international donors, finds in the status quo a lucrative industry that should be preserved. Based on fieldwork and interviews, the chapter provides multiple examples of this lucrative relation such as economic monopoly practices, the influence of Palestinian capitalists on the PA decision-making, and the indirect involvement of the political elite and their relatives in private ventures. The chapter concludes that the network of cronyism and patronage is a key explanatory factor that explains the persistent obedience of the PA political and economic elite to the Oslo status quo at the expense of rebuilding the Palestinian national movement along new lines and principles.”

(paragraph 23) “Since its establishment in 1994, the PA built a reputation of corruption characterised by an array of rent-seeking practices, financial bribery, and public embezzlement. The most prominent large-scale practice during the early years of Oslo was elite collusion in creating monopolies over strategic sectors of the economy. These monopolies served to expand the PA’s rent-seeking opportunities in order to consolidate its patron-client network. This was expressed in forging multifaceted networks that involved many prominent PA officials, security leaders, and a handful of private actors who partnered directly or indirectly in various investments. These networks were primarily controlled by Yasser Arafat and his inner circle of advisors and were directly facilitated by Israeli security and business figures (Bouillon 2004). The complicity of these actors in shaping these dynamics was then described as a “security-monopolistic complex” manipulating the economic resources of the state-building process in favour of the narrow interests of the elite and their cronies (Hajo 1998).”

(paragraph 26) “The PA public monopoly system was supported by the Israeli authorities through informal partnerships with former Israeli security figures to facilitate the import and supply of these imports through Israeli-controlled ports (Bouillon 2004; Roy 2001, 12). This collaboration was largely profitable to the PA figures involved in these monopolies, especially through reduced transaction costs. Moreover, substantial amounts generated by these monopolies were often off-budget and were used to finance the PA’s “secret accounts” in foreign and Israeli banks (Hilal and Khan 2004, 79).

The consolidation of crony capitalism after 2007

(paragraph 27) The post-second Palestinian intifada was shaped by internationally sponsored large-scale reform that re-institutionalised the PA’s crony relations with the business class along new parameters. First, the neoliberal policies embraced by PA Prime Minister Salam Fayyad (2007-2013), and maintained by the subsequent governments, have been accompanied by legal and institutional reforms that effectively regulated the PA’s business relations along ostensibly ‘professional’ principles. Second, the PA’s security reforms reintroduced well-trained security forces specializing in internal policing that became heavily involved in suppressing the public sphere and any opposition to the PA, including voices critical of PA corruption. Third, the increasing international aid to the PA after 2007 expanded rent-seeking opportunities and allowed the PA to extend its patron-client system to incorporate many political factions, civil society organisations, and trade unions. Fourth, Israel offered a range of incentives and privileges to secure the Palestinian elite’s compliance in serving Israeli security interests.

(paragraph 28) Shortly after the internal Palestinian division between Hamas and Fatah in 2007 and the subsequent institutional division between the West Bank and Gaza, Israel and international donors intensified the PA reform process, creating a fertile environment for political-economic crony relations to prevail, sustained by heavy-handed security measures. This was made possible by the harmonious interaction between the policies of the PA Prime Minister Salam Fayyad—widely dubbed Fayyadism—and the Israeli “economic peace” policy spearheaded by the Israeli Prime Minister, Benjamin Netanyahu. Both policies operated heavily in the economic and security spheres. Fayyadism is closely associated with the large-scale implementation of neoliberal economic policies, which faithfully followed World Bank recommendations to promote the private sector and export-led economic development (Khalidi and Samour 2011). This dynamic was endorsed by the rebuilding of the Palestinian security forces under the auspices of US Lieutenant General Keith Dayton, who equipped the PA security forces with professional skills of internal policing and “counterterrorism” and redefined the PA security agenda to serve Israeli security interests (Tartir 2017).

(paragraph 31) The second-generation monopolies (post-2007)

Since 2007, PA reforms have reconfigured the mode of monopoly that existed during the 1990s, transforming it into a legalised system characterised by the disproportionate market power of the conglomerates. The second-generation monopolies have been sustained by persistent market manipulation to prevent other businesses from entering into meaningful competition. The PA’s public and public-private monopolies have been centralised in the form of the Palestinian Investment Fund (PIF), founded in 2003 to replace the ill-reputed PCSC and Al-Bahr companies. Although the PIF was formed as a sovereign wealth fund ostensibly independent from the PA, its Board of Directors and senior staff are appointed by the PA’s president and include key figures representing PADICO and APIC and other large companies.

(Paragraph 38) “Although the Palestinian public is aware of power relations between the capitalists and the PA, gathering detailed and precise information regarding political elites’ engagement in business ventures is a challenging task. This is because elites often enjoy social, political, and legal immunity and are protected by the security apparatuses. Generally, the political elites’ corruption, embezzlement of public resources, money laundering, and informal involvement in business come to light at times of internal conflict within elite circles, or through leaked documents obtained by investigative journalism. The PA’s political elite became particularly discreet about their business relations following a series of corruption scandals during the 1990s and early 2000s. However, several PA officials’ family members and relatives are publicly involved in large businesses operations, either independently or through existing conglomerates. The most prominent example concerns the sons of President Mahmoud Abbas, Tareq and Yasser Abbas, whose businesses and wealth have been at the centre of public and media debates questioning the possible connection between their successful business ventures and their father’s political power. To defy these accusations, advocates claim that the president’s sons’ involvement in business preceded their father’s presidency and that they are “hard-working entrepreneurs who were trying to help their fellow Palestinians by developing the economy” (Entous 2009). The Abbas brothers have been involved in the private business since the early years of Oslo, although in recent years, they have become influential economic actors in the oPt and beyond.”

(Paragraph 40) In 2009, Reuters published a detailed investigative report that sheds light on the political background of the successful businesses run by the president’s two sons. According to documents obtained by Reuters, the United States Agency for International Development (USAID) paid over US$2 million for Yasser’s Falcon Holding Group to construct a sewage system in Hebron in 2005, and for Tareq’s Sky Advertising to launch a public relations campaign in 2006 to improve the US’s image in the Palestinian territories. When asked about the links between USAID’s financing of profitable projects by companies operated by the sons of the PA president, a USAID official stated that “family ties were not a consideration” (Entous 2009).

(Paragraph 41) “Similarly, in 2012, Foreign Policy published an article questioning the legitimacy of the wealth acquired by Yasser and Tareq, specifically after Mahmoud Abbas took office in 2005, and whether they have “enriched themselves at the expense of regular Palestinians—and even US taxpayers” (Schanzer 2012). Entitled “The Brothers Abbas: Are the sons of the Palestinian president growing rich off their father’s system?”, the article sparked considerable controversy concerning potential links between American aid to the PA and the personal enrichment of PA officials and their relatives. Yasser Abbas responded by filing a libel lawsuit with the federal district court in the District of Columbia’s against Foreign Policy, charging the publication with a defamatory allegation of corruption. The judge contended the following:

The question of US aid to the Palestinian Authority, and the level of corruption in the PA under both Yasir Arafat and Mahmoud Abbas, is fundamentally a matter of public, not private, interest. The relationship between the United States and the Palestinian Authority, and the way that U.S.-appropriated funds are used by the Palestinian Authority has been debated at length for years. The question of whether the sons of the president of the Palestinian Authority are enriching themselves by virtue of their political ties, and whether some of their wealth can be traced to US tax dollars is part of that issue. As defendants point out, numerous publications in the United States and throughout the world have written extensively about corruption in the Palestinian Authority generally, and the Abbas family’s wealth specifically. Indeed, Mr. Abbas does not dispute that “there is a public controversy concerning allegations of corruption within the Palestinian Authority.” (United States District Court for the District of Columbia 2013)

 (Conclusions)

(Paragraph 43) “Crony capitalism has become a fundamental explanatory variable in understanding the interrelationships between the PA political elite and a handful of business groups and entities. While crony relations have existed since the early years of the PA’s establishment, cronyism and associated patronage networks have grown in complexity during the previous decade. The changing nature of monopolistic practices highlights the state of PA-business relations in the context of Israel’s settler-colonialism and international donors’ financial support. The system of crony capitalism in the occupied West Bank is a significant factor driving persistent poverty, inequality, and social division. Moreover, while powerful interest networks internally underpin PA cronyism, it is externally sustained by Israeli and international donors as long as it achieves political stabilisation and preserves the status quo. In truth, the reality of crony capitalism in the oPt is an understudied “black box” area of research due to various security restrictions, autocratic politics, and difficulties associated with acquiring detailed and precise information.”