Since the ill-fated Camp David negotiations between Ehud Barak and Yassir Arafat collapsed into an orgy of blood and violence we now call the Second Intifada, many on the Israeli side have abandoned the principle of land for peace. This principle, which became official US policy after Russia hastily agreed to a UN-brokered ceasefire to the June War of 1967 that did not require a withdrawal to pre-war lines, remains the official policy of Israel, the US, the Quartet, the UN, the Arab League, the PA, Fatah; pretty much everyone except Hamas. So why have forty years gone by with no resolution to this conflict?

Along comes Bueno de Mesquita (no, it’s not a name for a delicious new Tex-Mex barbecue sauce, it’s a real person, and he’s a lot smarter than either of us) with an answer for not only that question, but also for the question of how to resolve the conflict.

“In my view, it is a mistake to look for strategies that build mutual trust because it ain’t going to happen. Neither side has any reason to trust the other, for good reason,” he says. “Land for peace is an inherently flawed concept because it has a fundamental commitment problem. If I give you land on your promise of peace in the future, after you have the land, as the Israelis well know, it is very costly to take it back if you renege. You have an incentive to say, ‘You made a good step, it’s a gesture in the right direction, but I thought you were giving me more than this. I can’t give you peace just for this, it’s not enough.’ Conversely, if we have peace for land—you disarm, put down your weapons, and get rid of the threats to me and I will then give you the land—the reverse is true: I have no commitment to follow through. Once you’ve laid down your weapons, you have no threat.”

Bueno de Mesquita’s answer to this dilemma, which he discussed with the former Israeli prime minister and recently elected Labor leader Ehud Barak, is a formula that guarantees mutual incentives to cooperate. “In a peaceful world, what do the Palestinians anticipate will be their main source of economic viability? Tourism. This is what their own documents say. And, of course, the Israelis make a lot of money from tourism, and that revenue is very easy to track. As a starting point requiring no trust, no mutual cooperation, I would suggest that all tourist revenue be [divided by] a fixed formula based on the current population of the region, which is roughly 40 percent Palestinian, 60 percent Israeli. The money would go automatically to each side. Now, when there is violence, tourists don’t come. So the tourist revenue is automatically responsive to the level of violence on either side for both sides. You have an accounting firm that both sides agree to, you let the U.N. do it, whatever. It’s completely self-enforcing, it requires no cooperation except the initial agreement by the Israelis that they are going to turn this part of the revenue over, on a fixed formula based on population, to some international agency, and that’s that.”

(Good Magazine via Marginal Revolution)

Not bad, huh?