Israel-Palestine Conflict: A general model?

This blog tries to remain relatively apoliticial. I do not intend to break this by illustrating as opinion on the Israel-Palestine conflict, it is a difficult issue which I could do no justice. However, I do like to try to understand the world around me, so a relatively generalised model that describes these types of conflicts and “international policy advice” in the situation would be useful to me.

I aim to sketch out a few thoughts I have based on the study of economics. If there is a political scientist out there (or anyone else for that matter), I would be more than happy to hear about the multitude of logic flaws in my description 😉

To start with I should describe the general international relations (market 🙂 ) failure involved in a relationship like the Israel-Palestine relationship (therefore, I am not saying that the following this ARE happening – I am saying that they are indicative of the type of situation).

The way I see it there is a prisoner’s dilemma going on. Both countries would prefer it if Israel was not closing off its borders, and if Palestine did not support people who were shelling areas in Israel. However, it is a “dominant strategy” for Israel and Palestine to do each of these things. Fundamentally, if one side tried to lighten things up, the other side would take advantage of the situation – so they both end up worse off.

Now this is no good – and it suggests that there could be scope for an independent third party to come in and enforce the “pareto superior” equilibrium with no closed borders and no shelling (Note: I realise that this is a HUGE simplification – Palestine does not necessarily fully control the shelling, and Israel cannot be forced to just “open its borders”. However, it is a useful EXERCISE to get an idea of the issues – I do not expect to be able to solve anything from this).

So here we have assumed that the goal of an objective third party is to get “pareto optimal” outcomes, given current allocations of “resources”. Given this view, there could be scope to broker an agreement. However, this view misses a very important element – the drivers of the allocation of resources, and the payoff associated with each nations actions.

Think of it this way. If the third party stuck to the view that they would try and come up with a “pareto optimal” solution, the stronger party could take advantage of the situation by declaring war, taking land, and then asking the impartial body to mediate. In this case, the solution may be pareto optimal relative to the current allocation – but it may be construed as “unfair” relative to the initial resource allocation.

As a result, the third party has to take this into account when stating action – or else their rule of “static pareto optimality” will lead to suboptimal outcomes overtime. This makes the issue a whole lot more difficult.

In this case, there is a “rights based” element to the negotiations. The different nations believe that they have a justifiable claim over the same territory.

Fundamentally, as long as the third party believes that there is a justifiable rights based claim on land – it would be more difficult for them to define a pareto optimal outcome.

Now, in this case so much depends on the value judgments implicit in our third parties view. How long can the historical claim on land be? Is there some intrinsic right to this land beyond the third parties aim to avoid the “strong attack weak” scenario – fundamentally here I am asking whether prior ownership of the land creates some value over it. If it does – then the situation we are in is even fishier.


Fundamentally, we have decided that the long-term conflict between these two countries (not just the war) is the result of a prisoner’s dilemma.

Our third body (the UN) is unable to mediate effectively because dynamic considerations, and because the joint claim over land makes pareto improvements more difficult to come by.

If the general situation wasn’t difficult enough to solve we have the added complication that the UN is actually a set of varying value judgments – not an objective social maximiser. In this case, the whole idea of policy actually being put in place to improve outcomes for both parties in this type of situation seems slight.

However, we will see in the current case.

11 replies
  1. dant03
    dant03 says:

    You monster!
    Nah, just kidding. Agree with some of the sentiment: lets get away (to some extent) from some of the ‘value based’ arguments that are blinding so many people, and instead concentrate on improving peoples lives.

  2. Matt Nolan
    Matt Nolan says:

    Hi Dant03,

    That was sort of what I was saying – however, I think I left the question of a “rights based” justification for international conflict relatively open – as there is little way to find a pareto optimal solution in this case without pulling a whole lot of value judgments out of somewhere 😛

  3. dant03
    dant03 says:

    Its a funny thing this conflict (while also quite tragic, obviously!) – how so many apparently reasonable people can take such extreme stances (ie one side is the victim, the other side is the criminal) and cease thinking in terms of pragmatism but rather blame.

    I remember hearing it said (I can’t remember by whom) that the further a person is willing to go in supporting one side over another in terms of relative ‘rights’ or ‘wrongs’ reveals the extent of their ideology [or you could say bias or racism I guess, but I wouldn’t ;o)]

  4. Matt Nolan
    Matt Nolan says:

    It is a tough conflict – I see fault on both sides. But I think it is more important to try and analyse the issue and figure out how we can improve things, rather than simply focusing on attributing blame.

    Maybe its how we’ve been trained to think dant03 😛

  5. What would Hayek say
    What would Hayek say says:

    Hi Matt – good start with the prisoners dilemma and pareto improvement. You may want to have a look at more game theory in looking at payoffs for different options taken by participants and whether any of those options provide an improvement even if sub-optimal. You may want to look at Thomas Schellings work on focal points as one tool to help break the prisoners dilemma communication problems and maybe provide the basis for clarifying what are the triggers for both parties which the other is unaware of, e.g. Cuba was a trigger for US, but USSR was unaware it was a trigger and therefore proceeded when if it knew Cuba was a trigger (focal point) it may have acted differently.

  6. Matt Nolan
    Matt Nolan says:

    Hi What would Hayek say,

    Focal points are definitely extremely important for determining the escalation of crises – and would be a good tool for analysing the specific conflict the Israel and Palestine have just fallen into. However, I am not sure that focal point arguments are sufficient for describing the longer-term choices by the agents – given that over a long-time horizon the “information problem” associated with these choices is likely to be overcome.

    However, I definitely think you are onto something in the way you are describing the crisis as a “co-ordination failure” as well as a “prisoner’s dilemma”. The “co-ordination failure” you are describing is what we fundamentally require to prevent the standard infinite horizon co-operation solution to a prisoner’s dilemma.

    Thanks for the pointer 🙂

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