The Economics of Middle East Peace.

• Author: Graves, Ronald L.

This is a compendium of essays presented at a conference at Harvard University on November 14-16, 1991. It is very comprehensive, therefore all points can not be reviewed in this article. While I found this book thought provoking I believe it has one major shortfall--it fails to discuss the assumptions that must be considered for possible peace agreements. These assumptions will provide the framework Middle East countries will pursue to establish cooperation or self-sufficiency. Also, there was evidence in some essays of national bias. I found this detracting as I expect professionalism to override national dogma if a discussion in Middle East peace is taken seriously.

Due to the instability in the Middle East referred to repeatedly by the authors, I do not place much credibility in the ability of past economic performance to predict the economic consequences of a peaceful future. Thus, the discussions by Handoussa and Shafik (Chapter 2), Bisat and Hammour (Chapter 6) and Kleiman (Chapter 12) should be viewed strictly in a notional context.

Hilan (Chapter 3) presents a very stimulating essay on the consequences for Syria (something Tyler in his commentary fails to properly acknowledge). In addressing the balance of power for peace, Hilan recognizes both Israel and the Palestinian/Arab countries must either allow sufficient defense in each opposing group to earn respect of the opponent, and in turn avoidance of conflict, or all parties must do away with all forces. The second is impossible. However, the first requires a more restrained society than currently exists.

In the first essay on Israel, Halevi (Chapter 4) states no substantial peace dividend should be expected in the near future, and while there may be an advantage to Israel for an economic union, the possibility is remote. While I can agree with the estimate of the potential magnitude of savings in the near term, I completely reject the assumption the gains in human capital alone based on lives saved can be so easily discounted, for all parties involved, not just the Israelis.

One of the significant points Hamed and Shaban (Chapter 5) discuss is the implication to the West Bank and Gaza Strip infrastructure. While this must be developed for long-term economic growth, this will be hindered if Israel takes a position of neutrality once peace is established, rather than supportive and cooperative for mutual benefit.

Ranis's commentary on Chapters 4 and 5 correctly points out what is...