Ten years of data confirm Palestinian economy degrades between wars, not just during them

The World Bank measured how armed conflict in the West Bank and Gaza between 2016 and 2025 affected business operations and firm survival. Firms in conflict zones lost productivity, revenue, and workers faster than standard economic models predict, meaning the actual cost of conflict to private enterprise is much higher than governments and development agencies have been calculating.

For decades, development economists estimated conflict's economic damage using broad macroeconomic models — GDP loss, trade disruption, capital flight. This paper shows those models miss the ground truth: individual firms don't just lose revenue, they lose the ability to operate at all. Workers stop showing up. Supply chains break. Equipment gets destroyed or seized. The gap between what the models say should happen and what actually happens to a business is the real cost of conflict, and it's larger. This matters because development banks and governments use those old estimates to decide how much aid to send, how quickly to rebuild, and whether private investment will return. If the actual damage is worse, the recovery timeline is longer, and the aid needed is bigger.