How too Much Foreign Aid has Hurt the PLO

A really interesting article on a very interesting topic. The main thrust of the issue is that the PA has squandered the vast majority of the aid it has received, and this is definitely not something that anyone can dispute. I wish that the PA leadership was smart and selfless enough to spend that aid on infrastructure and housing and other projects that would get people working and off the street, and also improve the living conditions of the Palestinian people.

But I really don't agree with the proposition that the solution to PA government culture of corruption is to cut off aid. I don't agree that aid necessarily leads to lopsided development, or as the article puts it "either you have foreign aid or you have foreign investment." After all, the Israelis receive enormous amounts of foreign aid and yet manage to have one of the more advanced economies in the world.

Yaakov writes:

Is there any way out of this cycle of Give the PA money >> They squander it, run out of money >> Claims of collapse and economic crisis >> lather, rinse, repeat?

The best solution would be a change in the priorities of PA leadership. But in the absence of that, why can't donor countries do a better job of making sure that aid goes to the right places? Why can't the EU mandate that X Euros be spent on building a new housing project, and maintain the checks and balances that are needed to ensure that every penny is spent transparently?

As I see it, foreign aid can kick start the Palestinian economy and therefore help to address a lot of the problems (poverty and unemployment --> lack of security and radicalism) that are factors in this conflict. But how exactly this can happen in practice is beyond my expertise.