The PA’s crisis combines fiscal pressure, political legitimacy problems, and uncertainty about succession. The World Bank reported in May 2024 that the PA’s financing gap reached $682 million at the end of 2023 and was projected to rise to as much as $1.2 billion within months. It linked the worsening position to reduced clearance revenue transfers and falling economic activity. World Bank fiscal update.
Why the budget is under strain
Clearance revenues—taxes collected by Israel on goods and labor and transferred to the PA under existing arrangements—are a major revenue stream. Interruptions and deductions, weak domestic activity, and reduced foreign assistance have narrowed the money available for salaries and services. The World Bank’s May 2024 update warned of a sharply rising financing gap and described arrears and delayed employee pay as financing mechanisms.
That fiscal picture does not alone explain the PA’s political weakness. Mahmoud Abbas has remained president since the 2005 election; no subsequent presidential election has taken place. The Legislative Council has not functioned since the 2007 Fatah-Hamas split, leaving limited institutional checks and no recent electoral mandate.
Succession is institutionally unsettled
Basic Law provides for the speaker of the Legislative Council to assume the presidency temporarily if the office becomes vacant, pending an election within 60 days. The council’s dissolution by presidential decree in 2018 and the absence of a functioning legislature raise practical questions about how that provision would operate. No single successor is guaranteed by the law or current political structure. Fatah officials, PA institutions, and Hamas would all shape the contest.
These pressures affect the PA’s ability to provide services and maintain security institutions. The Oslo framework and division of responsibilities are explained in the area divisions page; the separate policy on payments to prisoners and families is described here.