Work detail

Costs of Conflict: Empirical Analysis of the Economic Situation in Palestine and Israel

Author: Bc. Anastasia Pankina
Year: 2019 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 76
Awards and prizes: Nomination Deloitte Outstanding Thesis Award
Abstract: This thesis analyzes the Israeli-Palestinian conflict. Deeply rooted in history, and
dominated by mutual violence, the conflict has been causing considerable damage to
society, politics and economics for several decades. The latest attempts for the peace
negotiations process failed, leading to an escalation of tensions and the Second
Intifada in 2000. The Israeli West Bank Barrier has been constructed with an aim to
reduce the number of terrorist attacks and to stabilize the situation of the region. By
using the synthetic control method, we evaluate the impact of the Second Intifada and
the Barrier on GDP per capita. The results indicate that Israel benefits from the West
Bank Barrier, in 10 years the country managed to completely recover from the
substantial negative effect of the Second Intifada. On the other hand, the West Bank
experienced a decline in GDP per capita at the beginning of construction since the
Barrier damaged properties located close to the construction and restricted movement
of goods and people. A couple of years later the situation stabilized, however, the
West Bank was unable to achieve full recovery from the armed uprising of 2000, and
the GDP per capita growth remained limited. The estimations for the whole of
Palestine reveal a negative impact, that is also attributed to the Palestinian Civil War,
a conflict between the main Palestinian political parties in the Gaza Strip


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