The Economics of Palestinian Liberation

How the PLO went from building a developmental state in exile to accepting a neoliberal economy under colonialism.


On the eve of the dismemberment of the Palestinian Liberation Organization’s (PLO) military apparatus and its related civil and political infrastructure in Lebanon in 1982, even friendly critics of its performance in the country were not far off the mark in describing it as a “state within a state.”

Until scattering to all corners of the Arab world as a result of the Israeli invasion of Lebanon, the PLO administration had effectively shared sovereignty with the Lebanese state over a large swath of the country for most of the preceding decade and had developed state-like institutions.

Even in the exile of the refugee camps of Lebanon, the PLO found it difficult to resist pretensions to “national” state-building goals. This was a natural defense mechanism in an environment dominated by Arab regimes that were as threatened by the rise of the Palestinian armed revolution and the wave of popular mobilizations that it inspired throughout the region as they were caught up in it.

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