After few quiet meetings in 2011 with Palestinians in Europe, the Middle East, and the United States, I noticed a common theme. While Palestinians are universally and often justifiably frustrated with Israel's policies, they are also frustrated by their own poor leadership.
Intrigued, I began to write articles about the Palestinian leadership deficit, as well as the chronic abuses of power and mismanagement that are all too common across the Arab world. I soon realized that the story of failed Palestinian governance and persistent mismanagement is one that a great many observers of the region implicitly accept as truth, but few have ever documented.
The story, as I document in my book State of Failure: Yasser Arafat, Mahmoud Abbas and the Unmaking of the Palestinian State, begins with the inception of the Fatah faction in Kuwait in the 1950s. Under the leadership of Yasser Arafat, Fatah was a secretive terrorist organization on the receiving end of vast petro-dollars. The faction's coffers ballooned after the 1967 Six-Day War and when Mr. Arafat took over the Palestine Liberation Organization. The PLO's headquarters moved from Jordan to Lebanon to Tunisia in the decades that followed. All the while, its coffers continued to grow.
By the time the international community called upon Mr. Arafat in 1994 to create the Palestinian Authority, the PLO had a decades-long track record of operating as a secretive terrorist umbrella organization that was accountable to nobody.
Despite his organization's history of violence, mismanagement, and secrecy, Mr. Arafat was urged to flip the switch and somehow transform the PLO into a functioning mini-state. Not surprisingly, what followed was a decade of scandal. Amidst the fits and starts of diplomacy with Israel, allegations of waste, abuse of power, nepotism, and corruption piled up.
Looking back, U.S. and Palestinian officials involved in the process admit that an opportunity was missed. As negotiator Aaron David Miller recalled, the hope was that if Washington could "get to an agreement, which was a transactional act, that would produce transformation."
But there was no transaction. Nor was there transformation. The peace process collapsed with the outbreak of the Second Intifada in 2000. Amidst the violence, however, there was a remarkable awakening among Palestinians that went unnoticed: The Palestinians were demanding reform.
Even amidst the ongoing war with Israel (2000-2005), Palestinians made an effort to clean house. They worked to centralize Mr. Arafat's many bank accounts, even removing officials who had benefited from the system. And the PA's then-Finance Minister Salam Fayyad, hailed for his common sense reforms and institution-building, steadily gained the confidence of the West.
After Mr. Arafat died in November 2004, the Palestinians elected a new president, Mahmoud Abbas. Mr. Abbas was widely billed as the anti-Arafat. But within a few short years, it became clear that Mahmoud Abbas was, in many respects, Yasser Arafat with a tie.
Admittedly, Mr. Abbas' Palestinian Authority functions better as a bureaucracy, but the reports of mismanagement and abuses of power will not subside. A recent European Union audit, for example, revealed that the PA may have "misspent" $3.13 billion in financial aid between 2008 and 2012. Mr. Abbas is now four years past the end of his legal presidential term, with no sign of elections in sight. Meanwhile, his regime has forcefully quashed protests in the West Bank, and made criticism of the president – in mainstream media and social media alike – an offence that could lead to imprisonment.
It is worth remembering that the perception of corruption and authoritarianism within the Abbas regime was key to giving the terrorist group Hamas, which ran on a platform of clean governance, the boost it needed to win the Palestinian elections in 2006. The political stalemate that followed ultimately led to a civil war in 2007 whereby Hamas conquered the Gaza Strip by force, yielding an unsustainable split between the West Bank and Gaza that persists today.
Remarkably, even after Hamas's resounding victory, world leaders elected to ignore the abuses within the PA. Today, the international community, led by the United States, is yet again pushing the Palestinians and Israelis toward a two-state solution. And Washington still has not learned its lessons. The State Department continues to give short shrift to the internal challenges dogging the PA, which is widely seen by the Palestinian street as a seal of approval for the ongoing abuses. This is a dynamic that will continue to push the Palestinians into the hands of Hamas.
This is hardly a blueprint for peace. Nor is it a blueprint for successful statehood. If anything, the current course, if uncorrected, will put the Palestinians on track for a different state: a state of failure.
Jonathan Schanzer is vice president for research at Foundation for Defense of Democracies and author of State of Failure: Yasser Arafat, Mahmoud Abbas and the Unmaking of the Palestinian State (Palgrave Macmillan 2013).