Political economy involves the analysis of stakeholders, power relations, and social conflict across time and space. In the Palestinian context, this means understanding how Israeli policies, the blockade, the political division between Fatah, Hamas, and the Palestinian Authority (PA), international developments, and repeated cycles of violence have resulted in economic vulnerability across different societal groups.
Palestinian individuals and stakeholders have been seeking ways to adapt as a consequence of the repetitive damage to infrastructure during conflict escalation, the challenges of rebuilding because of the control of imports and exports by Israel, and the associated increased needs and decreased wellbeing of the population. These adaptations change behaviours and relationships and lead to the inability to implement structural changes, which perpetuates cycles of violence and reinforces economic vulnerability.
Gaza stakeholder adaptations impacting economic vulnerability are outlined below.
- Hamas initially used the tunnel economy before increasing its reliance on taxation and introducing regulations affecting private businesses and civil society. This strengthened its monopoly over economic activities in Gaza, reduced social cohesion, and increased the gap with the PA.
- Because of counterterrorism measures, humanitarian organisations are unable to implement structural changes and rely on short-term needs provision to temporarily alleviate poverty.
- Given structural barriers, the youth of Gaza (aged 18–29) have had to rely on alternative support networks to break the cycle of economic vulnerability. This risks perpetuating and heightening political violence.