The Paris Protocol and Fiscal Fragility: Withholding Clearance Tax Revenues in Palestine (1997–2022)
DOI:
https://doi.org/10.32890/jis2026.22.1.11Kata kunci:
Clearance revenues, current expenditures, Paris protocol, PalestineAbstrak
This article examines the Palestinian Authority’s fiscal responses to the withholding of clearance revenues crisis from 1997 to 2022, a critical issue rooted in international economic agreements. Since data for subsequent years were unavailable due to the impact of war (Gaza War), the analysis focuses on data up to 2022.The Paris Protocol, which governs economic relations between Israel and Palestine, establishes a customs union characterized by the absence of economic borders between the two sides and relies on a joint economic committee. Using data from official reports issued by the Ministry of Finance and the Palestine Monetary Authority, this study uses descriptive statistics and regression analysis to explore the relationship between current expenditures and clearance tax revenues. The results show a positive association between these expenditures and revenues, highlighting the significant impact of withheld funds on fiscal policy. The research highlights the need to renegotiate the Paris Economic Protocol to address structural weaknesses and prevent recurring fiscal crises. Recommendations include enhancing the efficiency of the tax system, diversifying revenue sources, and rationalizing spending to enhance fiscal stability. By placing the analysis in a broader context of international economic relations, this study contributes to understanding the interaction between domestic fiscal crises and international agreements. These findings have implications for policymakers and international stakeholders seeking to promote sustainable economic growth and mitigate the risks of unequal economic arrangements.
Rujukan
Abbadi, S. M., Olabi, M., Owida, H., & Shuku, A. A. (2021). The impact of fiscal policy on economic growth in Palestine. International Journal of Economics and Finance, 13(8), 1-51.
Abdelrahman, O. (2023). Government expenditures determinants: An empirical study on Palestine. International Journal of Academic Research in Economics and Management Sciences, 12(2), 67–74.
Abu-Mudallala, S., & Al-Khodari, I. (2016). Al-iradat al-amma wa al-nafaqat al-amma al-filastinyya: al-mushkilat w al-hulul (1995-2015) [Palestinian public revenues and public expenditures: Problems and solutions (1995–2015)]. Majallat al-Buḥuth al-Iqtiṣadiyya wa al-Maliyya, [Journal of Economic and Financial Research], 3(2), 219–235. https://asjp.cerist.dz/en/ article/4731
Abuamsha, M. K., & Hattab, L. M. (2024). Shadow economy–financial sustainability nexus: The case of Palestine. Journal of Economic Studies, 51(2), 375-393.
Abu-Rmeileh, Q., & Iriqat, I. (2024). Navigating economic development in Palestine: Analysis of key challenges. International Journal of Sustainable Development & Planning, 19(2).
Abouyounes, M. W. (2025). The legal underpinnings of Jordanian and Iraqi law's administrative penalty systems. Al-Biruni Journal of Humanities and Social Sciences, 3(9). https://doi.org/10.64440/ BIRUNI/BIR003
Ajeigbe, K. B., Ganda, F., & Enowkenwa, R. O. (2024). Impact of sustainable tax revenue and expenditure on the achievement of sustainable development goals in some selected African countries. Environment, Development and Sustainability, 26(10), 26287-26311.
Akapelwa, K., & Mwange, A. (2023). Theories, principles, opportunities and challenges of local government financing: A comprehensive review of literature. International Journal of Multidisciplinary Research and Education, 4(5), 774-781.
Al-Attabi, S. (2018). The impact of customs taxes on supporting the state’s general budget. Iraq: Al-Muthanna Journal of Science Economic and Administrative, 12(3).
Ali, Z. M. A. D. R., & Iriqat, M. (2016). Exploring economy dependence in the Middle East using governmental accounting indicators: The case of Palestine, Jordan & Israel. International Business Research, 9(1), 154.
Amjad, B., Carrasco, H., Finn, A., & Goldman, M. (2024). Fiscal policy, poverty, and inequality in a constrained environment.
Andreea, C. L., Daniela, V. A., & Mihai, U. D. (2021). Fiscal policy and the conceptual mechanism of fiscal system. Annals of'Constantin Brancusi'University of Targu-Jiu. Economy Series/Analele Universităţii'Constantin Brâncuşi'din Târgu-Jiu Seria Economie, (2).
Arafeh, N. (2018). Long overdue: Alternatives to the Paris Protocol. Al-Shabaka Policy Brief.
Awwad, B., & Zidan, J. (2021). The role of the clearance crisis on public expenditure and budget deficit in Palestine. International Journal of Business Ethics and Governance, 4(1), 1-40.
Badra, N. (2022). Fiscal policy in times of high debt: Tale of Lebanon. Middle East Development Journal, 14(1), 32-42.
Badwan, N. (2021). The impact of capital flight on economic growth and financial stability in Palestine. Asian Journal of Economics, Business and Accounting, 21(11), 85-101.
Badwan, N. (2022). Determining the impact of capital flight on economic growth and financial stability in Palestine. New Innovations in Economics, Business and Management, 6, BP International. https://hal.science/hal-05211675
Benmelech, E., & Tzur-Ilan, N. (2020). The determinants of fiscal and monetary policies during the COVID-19 crisis (No. w27461). National Bureau of Economic Research.
Blackley, P. R. (1986). Causality between revenues and expenditures and the size of the federal budget. Public Finance Quarterly, 14(2), 139-156.
Borio, C., Farag, M., & Zampolli, F. (2024). Fiscal policy and financial stability: revisiting the nexus. In Fiscal Policy in a Turbulent Era (pp. 139-153). Edward Elgar Publishing.
Borisovich, K. A. (2018). Post-Soviet States: challenges of development. Вестник Российского университета дружбы народов. Серия: Международные отношения, 18(2), 247-258.
Brett, T., & Winter, S. (2020). Origins of the Zimbabwe crisis. The Helen Suzman Foundation.
Chatterjee, S. (2021). A new coefficient of correlation. Journal of the American Statistical Association, 116(536), 2009-2022.
Chopra, J. (2002). Building state failure in East Timor. Development and Change, 33(5), 979-1000.
Cooley, A. (2017). Whose rules, whose sphere? Russian governance and influence in post-Soviet states (pp. 11-12). Carnegie Endowment for International Peace.
Corrêa Cardoso, F., Alceste Berri, R., Lucca, G., Nunes Borges, E., & Dias de Mattos, V. L. (2025). Normality tests: A study of residuals obtained on time series tendency modeling. Exacta, 23(1).
Dakhlallah, K. M. (2020). Public debt and fiscal sustainability: The cyclically adjusted balance in the case of Lebanon. Middle East Development Journal, 12(2), 340-359.
Dixit, A. (1976). Public finance in a Keynesian temporary equilibrium. Journal of Economic Theory, 12(2), 242-258.
Dweikat, z. (2022). Taxation system in Palestine obstacles and challenges. International Journal of Business and Economy, 4(1), 76-91.
El-Hayek, V. (2015). Palestinian economic development: Israeli actions in light of the 1994 Paris Protocol and international economic law. Minnesota Journal of International Law, 24, 223. https://minnjil.org/wp-content/uploads/2015/10/24MinnJIntlL223.pdf
Faza, M., & Badwan, N. (2023). The risk of capital flight on economic growth and national solvency: An empirical evidence from Palestine. Asian Journal of Economics, Business and Accounting, 23(7), 28-48.
Fedoryshyna, L. (2020). The mechanism of fiscal policy. Three Seas Economic Journal, 1(1), 28-32.
Foucher, M. (2013, November). External interventions in countries in crisis. In Conference on Security in Rio (Vol. 28, p. 29).
Gourinchas, P. O., Philippon, T., & Vayanos, D. (2017). The analytics of the Greek crisis. NBER Macroeconomics Annual, 31(1), 1-81.
Guerguil, M., Poplawski-Ribeiro, M., & Shabunina, A. (2014). Fiscal policy response during the crisis in low-income African economies. Post-Crisis Fiscal Policy, 287-314.
Hanieh, A. (2021). The political economy of state formation in Palestine. Rethinking statehood in Palestine, 29. https://storage.googleapis.com/rua-ucp/files/books/126/31bde389-e31a-4f26-ac88-a8f840746879.pdf
Hillis, R. (2021). Azmat iradat al-maqasa lil-sulta al-filastiniya fi Siyaqiha al-siyasi wa tada'iyatiha al-iqtisadiya [The crisis of clearing revenues of the Palestinian Authority in its political context and its economic repercussions]. Al-Zaytouna Centre for Studies and Consultations.
Huang, W., & Zheng, H. (2012). Financial crises and regime-dependent dynamics. Journal of Economic Behavior & Organization, 82(2-3), 445-461.
Iqtait, A. (2023). Funding and the quest for sovereignty in Palestine. Palgrave Macmillan.
Iqtait, A. (2025, May). Taxation and settler colonialism: The Palestinian case. In Forum for Development Studies (pp. 1-17). Routledge.
Istrate, C. (2024). Accounting and taxation in Romania: From connection to disconnection? Journal of Accounting and Management Information Systems, 23(1), 5-28.
Kalloub, M., & Odabas, H. (2019). Palestinian economy assessment: Public revenues, expenditures and current issues. In 8th SCF International Conference on the Economic and Social Impacts of the Globalization and Liberalization, Antalya/Turkey.
Keynes, J. M. (1937). The general theory of employment. The Quarterly Journal of Economics, 51(2), 209-223.
Köstekçi, A., & Celik, A. (2024). Modelling the relationship between public expenditure, tax revenue and economic growth in Türkiye using the AARDL approach. Ekonomika, 103(2), 90-108.
Kouretas, G. P., & Vlamis, P. (2010). The Greek crisis: Causes and implications. Panoeconomicus, 57(4), 391-404
Kreiw, R., & Faragalla, W. (2019). Libyan labor market: Characteristics and challenges. Scientific Papers, 35(1), 267.
Laeven, L., & Valencia, F. (2013). The real effects of financial sector interventions during crises. Journal of Money, Credit and Banking, 45(1), 147-177.
Lins, M. A. D. T. (2024). Instability in Latin America. Finance, growth and democracy: Connections and challenges in Europe and Latin America in the Era of permacrisis: Democracy, Finance, and Growth, 33, 151.
McNabb, K. (2023). Fiscal dependence on extractive revenues: Measurement and concepts. Resources Policy, 86, 104129.
Medema, S. G. (2023). Theorising public expenditures: Welfare theorems, market failures, and the turn from “public finance” to “public economics.” The European Journal of the History of Economic Thought, 30(5), 713-738.
Medvedev, N. P., Slizovskiy, D. E., Iwaina, M., & Nesterchuk, O. (2020). The Fiscal Situation of Palestine: Can the grip of chronic distress be loosened? Journal of Politics and Law, 13, 19.
Mohammed, A. B. B. A., & Kakanda, M. M. (2017). Moderating effect of internal control system on the relationship between government revenue and expenditure. Asian Economic and Financial Review, 7(4), 381.
Molănescu, G., & Aceleanu, M. I. (2011). Consequences of the budget deficit in the current crisis in Romania. Implications on the labor market. Theoretical & Applied Economics, 18(2).
Moyo, N., & Besada, H. (2008). Zimbabwe in crisis: Mugabe's policies and failures. The Centre for International Governance Innovation Technical Paper, (38).
Nashashibi, K. (2015). Palestinian public finance under crisis management: Restoring fiscal sustainability. United Nations Development Programme.
Ndlovu-Gatsheni, S. J. (2003). Dynamics of the Zimbabwe crisis in the 21st century. African Journal on Conflict Resolution, 3(1), 99-134.
Neaime, S. (2015). Sustainability of budget deficits and public debts in selected European Union countries. The Journal of Economic Asymmetries, 12(1), 1-21.
Nore, A. W. J., & Ghani, A. B. A. (2009). Insurgency, political stability and economic performance in post-Saddam Iraq: An evaluation. Journal of Politics & Law, 2(4), 103-114.
Okasha, A. K. (2017). Al-Iqtisad al-Filastini bayn al-Wihda wa Muhawalat al-Tafkik: Qira’a fi al-Dirasat al-Sabiqa [The Palestinian economy between unity and attempts at fragmentation: A review of previous studies]. Journal of Al-Quds Open University for Administrative and Economic Research, 2(7).
Orgeira Pillai, N., Van Den Boogaard, V., & Prichard, W. (2024). The politics of taxation and tax reform in times of crisis: COVID-19 and attitudes towards taxation in Sierra Leone. The Journal of Development Studies, 60(2), 196-216.
Ouakil, H., Moustabchir, A., Lechheb, H., & EL Ouazzani, H. (2024). Fiscal policy in the face of the health crisis: A simulation using a hybrid DSGE‐SIR model. African Development Review, 36(3), 425-443.
Palestine Ministry of Finance. (2023). Annual reports, different issues.
Palestine Monetary Authority. (2023). Annual report 2023. https://www.pma.ps/en/Publications/ AnnualReports
Palestinian Central Bureau of Statistics. (2023). Palestine in figures 2022. Ramallah – Palestine.
Palestinian Economic Policy Research Institute (MAS). (2024). Palestine economic update. https://mas.ps/en/publications/11259.html
Raftopoulos, B. (2009). The crisis in Zimbabwe, 1998–2008. Becoming Zimbabwe: A history from the pre-colonial period to 2008, 201-232. https://www.researchgate.net/publication/287607676_ Becoming_Zimbabwe_A_history_from_the_pre-colonial_period_to_2008
Redfearn, J., & Smith, B. (1994). France confronts budget deficit. Physics World, 7(11), 5.
Ruggeri, J., & Zou, Y. (2006). Measures of fiscal dependency. Public Finance Review, 34(4), 381-403.
Sadekin, M. N., Alam, M. M., & Saha, S. (2020). Analysis of trend and sources of government budget deficit financing in Bangladesh. Journal of International Studies, 16, 129-144.
Safi, W. (2019). Azmat iradat al-muqasa wa atharuha ala bunood al-muwazana al-filastiniya khilal al-nisf al-awwal min al-am 2019 [The clearance revenues crisis and its impact on Palestinian budget items during the first half of 2019]. Al-Mersat Al-Masrifiyya, 24. Palestine Monetary Authority, Ramallah.
Sawafteh, O., & Atili, M. (2021). Azmat al-muqasa wa atharuha ala al-natij al-mahali al-ijmali fi Filastin ma bayn al-aam 1997-2019 [The clearance revenues crisis and its impact on the gross domestic product in Palestine between the years 1997-2019]. Majallat Al-Uloom Al-Iqtisadiya Wal-Idariya Wal-Qanuniya [Journal of Economic, Administrative, and Legal Sciences], 5(23), 44–57. https://doi.org/10.26389/AJSRP.H130421
Smith, G. (2024). The post-Soviet states: Mapping the politics of transition. Taylor & Francis.
Sumandeep, Kiran, R., & Sharma, R. K. (2024). Investigating the relationship of government revenue and expenditure on economic growth using a generalized method of moments: Does state-level panel ensure sustainable growth? Plos One, 19(5), e0301764.
Surrey, S. S., & McDaniel, P. R. (1985). Tax expenditures. Harvard University Press.
Tamba, D. A., Janwari, Y., Hasanuddin, M., reni Ratnasari, A., & Amany, A. (2025). The concept and philosophy of fiscal policy in modern and Islamic historical perspectives. Strata International Journal of Social Issues, 2(1), 1-8.
Tawfiq, S. (2025). A theoretical examination of collective identity formation in contemporary societies via ideology and social dynamics. Al-Biruni Journal of Humanities and Social Sciences, 3(7). https://doi.org/10.64440/BIRUNI/BIR001
Triantama, F. (2023). United Arab Emirates-Israel Rapprochement: A Rational Choice of Emiratis. Journal of International Studies, 19(1), 169-199.
Tsebelis, G. (2016). Lessons from the Greek crisis. Journal of European Public Policy, 23(1), 25-41.
Vinokurov, E., & Libman, A. (2014). Do economic crises impede or advance regional economic integration in the post-Soviet space? Post-Communist Economies, 26(3), 341-358.
Whiteside, H. (2023). Beyond death and taxes: Fiscal studies and the fiscal state. Environment and Planning A: Economy and Space, 55(7), 1744-1761.
Yan, Y., He, C., Liu, T., & Yang, H. (2024). Regional fiscal disparities in Chinese cities: Revenue-expenditure perspective. Applied Geography, 170, 103362.
Muat turun
Diterbitkan
Terbitan
Bahagian
Lesen
Hak Cipta (c) 2026 Journal of International Studies
Kerja ini dilesenkan di bawah Creative Commons Attribution 4.0 International License.
