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October 29, 2007

Tourism for Peace

Via Tyler Cowen, Bueno de Mesquita has a fascinating proposal for solving the Israel-Palestine conflict:

“Land for peace is an inherently flawed concept because it has a fundamental commitment problem. If I give you land on your promise of peace in the future, after you have the land, as the Israelis well know, it is very costly to take it back if you renege. You have an incentive to say, ‘You made a good step, it’s a gesture in the right direction, but I thought you were giving me more than this. I can’t give you peace just for this, it’s not enough.’ Conversely, if we have peace for land—you disarm, put down your weapons, and get rid of the threats to me and I will then give you the land—the reverse is true: I have no commitment to follow through. Once you’ve laid down your weapons, you have no threat.”

Bueno de Mesquita’s answer to this dilemma, which he discussed with the former Israeli prime minister and recently elected Labor leader Ehud Barak, is a formula that guarantees mutual incentives to cooperate. “In a peaceful world, what do the Palestinians anticipate will be their main source of economic viability? Tourism. This is what their own documents say. And, of course, the Israelis make a lot of money from tourism, and that revenue is very easy to track. As a starting point requiring no trust, no mutual cooperation, I would suggest that all tourist revenue be [divided by] a fixed formula based on the current population of the region, which is roughly 40 percent Palestinian, 60 percent Israeli. The money would go automatically to each side. Now, when there is violence, tourists don’t come. So the tourist revenue is automatically responsive to the level of violence on either side for both sides. You have an accounting firm that both sides agree to, you let the U.N. do it, whatever. It’s completely self-enforcing, it requires no cooperation except the initial agreement by the Israelis that they are going to turn this part of the revenue over, on a fixed formula based on population, to some international agency, and that’s that.”

My hunch is that Israelis will give up 40% of their tourism dollars sometime on the far side of never, but that doesn't make this a bad idea. Indeed, the self-enforcing nature of it is promising. Given the capacity of extremist groups to shatter the peace process with a single, well-timed attack that reorients the various leaders' political incentives, reward and punishment equations that operate dispassionately off of previously agreed upon metrics may have some real promise. Downplaying the power of the emotions of the two sides, at least for awhile, may do quite a bit to create the sort of slow, relentless, incremental progress and trust-building that any final settlement will require.

October 29, 2007 | Permalink


Not self-enforcing at all. What stops the Israelis from blockading the tourist money, as they blockade other forms of tax revenue that are owed to the PA now?

What will really solve it is to take $1 trillion out of the $2.4-trillion budget for the next 10 years of the Iraq occupation, and use it to bribe the Israelis and Palestinians to make peace. Buy out all the settlers; compensate all refugees and move them to the country of their choice; give the Israelis a tank and a nuclear bomb for every member of the army if that's what they think they need for their security, and give the Palestinians vast sums for economic development. It will be a bargain.

Posted by: Egypt Steve | Oct 29, 2007 11:09:38 AM

cute idea but no. The irsaelis and palestinians already have a very large shared financial incentive to find a peacful solution. I wouldnt see this doing much, even if it were politically plausible.

Posted by: pimp hand strikes! | Oct 29, 2007 11:17:13 AM

Yeah - that Land-for-Peace thing really didn't work out so well with Egypt, did it? oh wait...

It's time to stop screwing around with gimmicks and get people to commit -- all the players understand what a solution to the conflict will entail.

Posted by: Dukej | Oct 29, 2007 12:27:56 PM

Call me stupid, but I don't get it: how does one track and divvy up tourist revenue? It isn't as if Israel & Palestine will be offering some sort of all expenses included (including tschotschkes to take home for the family) packages that travelors will be forced into buying ... and then the money gets put into a kitty and the profits, after paying labor costs, will be shared according to some formula.

I'd consider myself pretty far gone into left-wing moonbattery, but I'm no commie: last I checked generally people spent money while tourists like anybody else spends money: largely at private businesses, etc. And shouldn't that money, the bulk of the revenue from tourism, go to the businesses who, um, actually catered to the tourists ... independent of whether they are Palestinians or Israelis? And shouldn't the tax revenues be divided in a politically and economically appropriate and justifiable manner as well?

I just don't see how this'd actually work.


I think Egypt Sheeve is onto something. It's essentially how the peace was kept Post WWII in Europe, wasn't it?

Posted by: DAS | Oct 29, 2007 1:10:22 PM

Terrorists can only scuttle every peace proccess with a single attack because that's how Israel want it. They do not want an honest agreement, they just want to stretch things out so long that they can start making arguments about how immoral it would be to make them leave palestine after 6 generations of living here,

The biggest mistake people like Ezra Klein make is to assume that we have ever had a real, honest peace process. You can not demand peace before you will negotiate for peace. The Israeli position is patently absurd.

Posted by: soullite | Oct 29, 2007 6:10:26 PM

Egypt Steve -- best blog comment peace plan I've seen yet.

I'd also like to see a decent portion of the funds that go to Egypt earmarked for economic development.

Posted by: bob | Oct 29, 2007 8:11:05 PM

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