external aid and its impact on the Palestinian economic growth

ABSTRACT
External aid is one of the most discussable issues which globally opened for debate and research, due to various social and economic aspects and impacts they include. Meanwhile, some of countries receiving external aid have not achieved positive results and not benefited from, others have largely´-or-partially benefited.
A widespread argument has been inasmuch prevailed among economists, some of them are supporting the resumption of these external aid while others calling for elimination of them and seeking for more efficient new mechanism. As a result of these demands, there was a need to investigate those impacts on the Palestinian economy that has received a large amount of external aid.
This study consists of two parts of which the first one is theoretical dealing with the economic growth theories in general and identifies external aid, their forms, types, and motives. Then, the study moves to features and defects of the external aid, and their effects on some of the aggregate´-or-partial economic indicators, specially saving, Consumption, and Investment seeing that various growth theories are interesting in these indicators.
The second part is the one which allocated for studying the Palestinian aid in specific, and attempts to apply various growth theories and external aid issues dealt with in the first part to the Palestinian status. It also examines sectional divisions and donor countries according to their turnouts, and studies the Palestinian economy within the Oslo aid period of time showing their extent.
The study is attempting to reply one specific question which is : whether the external aid had a positive impact on the Palestinian gross domestic production PGDP as a standard of the Palestinian economic growth´-or-they are futile ?
The study used the descriptive analytical method exploiting numbers, percents, and related data. It adopted the standard approach which requires GDP as an indicator of the economic growth and many other independent variables such as foreign aid, fiscal policy, capital accumulation, and exports.
The study concluded a set of applied and theoretical results of which the most significant was that the external aid have positively affected the Palestinian GDP, but they did not have the leading role. Other factors contributed more positively to GDP such as exports, Palestinian labor, and capital accumulation.
Aid also played a leading role in supporting the Palestinian authority and continuity of its entity, contributing positively to support poor and marginalized categories, developing and promoting many of educational and healthy sections and infrastructure. But the Israeli occupation role was based on preventing any positive result for the sake of the Palestinian economy, along with the absence of actual strategic Palestinian vision that can ultimately contribute to exploit the aid. The foreign aid also caused a great deal of financial confusion inside the Palestinian territories as they are associated to political conditions and their instability. Moreover, it did not take neither poor nor unemployed out of their poverty´-or-unemployment.
Finally, the study recommended the obligation of Palestinians to get out of the Israeli predominance over their territories under which they will never reach any Palestinian development achievement. The study also recommended the need to reevaluate the Palestinian experiment of aid, and reframe them in order to fit the Palestinian development plans under condition of sound Palestinian development basis.

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