Economics of 'Policy-Induced' Fragmentation: The Costs of Closures Regime to West Bank and Gaza

Israeli security measures, which were increased in response to the Intifada in 2000, have imposed a major cost on the economy of the West Bank and Gaza, and are heavily undercutting its current and future developmental capacity. The closures regime - the multi-faceted system of restrictions on the movement of goods and people both within the West Bank and Gaza and through Israel to the rest of the world - along with construction of the “Separation Barrier” have fragmented the West Bank’s and Gaza’s economic space, and have further reduced their productive potential. The aim of this paper is to estimate the economic costs of the closures regime on the Palestinian economy.