The Economic Diplomacy of Peace in The Middle East

Libby Lahar ()
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Libby Lahar: ISS

Chapter Chapter 7 in The Economic Diplomacy of Peace in the Middle East, 2026, pp 201-246 from Springer

Abstract: Abstract . Economic incentives have long been used to achieve non-economic targets; they form an integral part of foreign relations, with the Middle East conflict being no exception. Negative and positive incentives have been employed in the Israeli-Palestinian conflict to promote a resolution. With the emergence of the Middle East Peace Process in the early 1990s, economic (dis)incentives became the way to pursue progress in the peace process. The economic considerations also played a central role in both Israel’s and Palestine’s pursuit of the peace agreement. Moreover, beyond the economic potential, the decision was also motivated by an aspiration for a wider change in the region that would lead to a new Middle East. Indeed, the trade potential has been motivating the peace processes, initiatives, and accords in the Middle East region already from the first peace agreement signed in 1979 between Egypt and Israel. Ever since, for both Israel and the Arab countries in the region, trade benefits have been a central consideration in taking the decision to pursue a peace agreement, with the Oslo I Accord, as well as the latest Abraham Accords being no exception. Taking stock of the role of economic incentives and the untapped trade potential in the peace process, this chapter outlines a pathway to economic peace in asymmetric conflicts through the economic diplomacy framework. Grounded in the political-development-security nexus, the framework encompasses economic interdependence, incentives, and international law, that is, positive sanctions and external sovereignty, as tools to facilitate progress towards sustainable peace.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-93991-4_7

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DOI: 10.1007/978-3-031-93991-4_7

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