After the Oslo peace process got underway in the early 1990s, international donors allocated billions of dollars in aid to the occupied Palestinian territories to kick-start the process of economic development deemed necessary to state building. This article argues that although much of the money was directed at democracy enhancement and civic engagement projects, contrary to stated intentions, it actually undermined rather than promoted those outcomes. Donor countries, led by the United States and the European Union, designed and implemented programs with complete disregard for the reality underlying the Palestinian predicament—the almost 50 years of military occupation and the broader context of Israel's settler-colonial project. Besides their entrenchment of a neoliberal agenda, such projects have contributed to the ongoing fracturing of Palestinian politics and the growing authoritarianism of the Ramallah government, leaving the Palestinian economy less viable and more dependent on Israel than ever.

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