An Indian economist named Sundeep Waslekar has published a study that calculates the price tag of the Israeli-Palestinian conflict from 1991 to 2008. Their total is $12 trillion.
You can buy the study for $40 from the Strategic Foresight Group here, if you want to. Luckily, Tom Dine at the Israel Policy Forum has read the paper and summarizes many of the most interesting points. Allow me to condense his summary:
From the second intifada through 2007, there were 4,546 Palestinian fatalities, 650 of them caused by the Hamas-Fatah fighting. More than 11,000 Palestinians have been detained. In 1998, 420,241 out of 3,000,000 Palestinians lived below the poverty line; it was 820,000 in 2005.
Because of both the Israeli occupation and the power struggle within the two Palestinian entities the educational system has severely suffered, unemployment and joblessness are quite high; time wasted because of checkpoints amounts to 120 million man-hours. Deaths due to delay in medical treatment came to 51 Palestinians between 2000-2007.
[Israeli] Children killed, for instance, since the al-Aqsa initifida of September 29, 2000, until today are close to 90.
If peace were to break out, the study claims Israel’s peace dividend would be an annualized $9.1 billion, amounting per household to $4,423 per year for five years. The peace dividend for the new Palestine is not calculated. However, both states would benefit from not only cheaper oil and gas imports and the free flow of goods, but vast amounts of Sinai groundwater would be exploited, resulting in a surge in agricultural production in Gaza, the Negev, and West Bank.
I understand the idea of opportunity cost, but I have to say that I am a little skeptical of anything that puts a price tag on dead children. It’s obvious that the Israeli-Palestinian conflict economically inefficient. I guess $12,000,000,000,000 makes sense.
UPDATE: After doing some thinking and some Googling, I’ve started to think that $12 trillion might be a low estimate. According to a January 2008 report from the Congressional Research Service (careful, it’s a PDF) the US gives about $3 billion in aid to Israel a year. Washington also gives a much smaller, though still significant amount of aid to the Palestinian Territories. That would come out to about $50 billion over the time period discussed in the Strategic Foresight Group’s study.