American policy makers have learned the hard way in Iraq and Afghanistan the costs of pretending that strong institutions and viable political processes are emerging; in both cases the institutions and processes actually being built sometimes had too loose a connection to politics on the ground. U.S. leaders have learned the mistakes of relying too heavily on attractive local interlocutors and treating them as surrogates for genuine institutional development and deeply-rooted political processes. 
But those lessons are being forgotten in Palestine. Relying on “Fayyadism”—Palestinian Prime Minister Salam Fayyad’s program to build a Palestinian state despite occupation and internal division—alone will likely lead to failure and disappointment. Technocratic management can probably keep Palestinian institutions afloat and even improve their functioning in some limited ways. But it does not even pretend to offer a solution for the deeper problems afflicting Palestinian politics—division, repression, occupation, alienation, and wide-reaching institutional decay.
In short, Fayyadism might hold down the fort for a short period, but it will not deliver what its boosters promise. By pretending that Fayyadism, combined with Israeli–Palestinian diplomacy, is delivering a state, policy makers virtually ensure that the negative trends they are ignoring will confront them when they are least prepared for them. This is not to say that Fayyad should abandon his efforts or that international support for his cabinet and program should cease. But relying on Fayyadism alone to solve the challenges of Palestine will likely lead to failure and disappointment. 
This was the conclusion of a paper I published two months ago. The paper generated considerable attention and hit a sensitive nerve with supporters of Fayyadism. Understandably so. Critical political and financial support is at stake; questioning the program just as it generates sympathetic press coverage might be damaging indeed. But it is precisely because so much is at stake that we must be careful and realistic in understanding what Fayyadism can and cannot accomplish. Fayyad’s efforts should continue to draw international help. But they should not be used as an excuse—as they are right now—for postponing and ignoring difficult political questions. The time to address the deep crisis in Palestinian politics is now.
I received a broad set of questions and criticisms about the paper, some of which reflect disquiet with the political implications of my analysis. It is easy to sympathize with those discomfited, and it therefore makes sense to respond to some of the questions and criticisms in the hopes of contributing to a more sound and accurate understanding of current political realities:
Isn’t limited state building the best that can be accomplished under the impossible circumstances Fayyad faces? Should Fayyadism then be criticized for the circumstances under which it operates?
Fayyad does indeed operate under impossible conditions. Such an observation can generate empathy for him as an individual (and indeed, all the references to Fayyad’s personal characteristics in my earlier paper were positive or neutral; his personality is an asset, not a problem). But viewing the issues through the lens of a single individual—and using his virtues as a surrogate for a viable policy—is precisely the problem with the current approach. It is based on either a shallow understanding or deep contempt for Palestinian politics. 
In the three years since the West Bank–Gaza split, most trends for Palestinian politics and for peacemaking are negative—Hamas is more deeply entrenched; Fatah is in deeper disarray; and Palestinian society strikes me as characterized far more by despair than by cheery responsiveness to Fayyad’s programs. 
Fayyad’s accomplishments, like his virtues, are real—he has improved public administration, tiptoed into areas that are under direct Israeli security control, and marshaled impressive international diplomatic and financial support. The real political damage is done when those accomplishments are treated not as a way to keep Palestinian politics on life support but as a cure for the underlying diseases. Hamas, Gaza, authoritarianism, and political decay will not be easier issues to deal with if we project current trends a year or two into the future.
And in the meantime, the Palestinian cabinet is severely limited in what improvements it can provide. The latest set of promises in the program for the next year of “state building” coincidentally focuses on precisely those areas—legal reform and education—analyzed in my paper. I showed how only limited and technical improvements had been accomplished in those areas (with some areas of regression as well in both) and why it would be difficult to move beyond them. 
In general, Fayyadism runs into two deep structural problems. First, what it can accomplish is inherently limited by the authoritarian political context in which it operates. When Palestinian democracy, as problematic as it was, operated with an elected parliament from 1996 to 2006, deputies with a parliamentary mandate drafted a whole series of laws and empowered a set of institutions. Fayyadism may rescue parts of that project, but it cannot extend it very far. For instance, the Palestinian Legislative Council elected in 1996 drafted a comprehensive criminal code but did not complete the work. Now the two Palestinian governments—the one in Gaza and the one in Ramallah—have shown some interest in reviving the comprehensive code in order to cement their separate state-building efforts. But neither can do so in a legitimate way because neither has more than an ad hoc (and legally dubious) legislative process. Fayyad’s cabinet has been able to tinker with legal and institutional accomplishments of earlier periods, but it simply lacks the tools or the legitimacy to undertake any comprehensive efforts.
Second, the institutions that Fayyad can maintain are strictly administrative in nature. The Monetary Authority operates impressively, overseeing a banking system that has weathered innumerable storms. The Ministry of Education can continue examining students every year in the midst of political disruption and turmoil. And it can tinker with the curriculum developed in the 1990s—though too many changes risk furthering the divide between the West Bank and Gaza (because the educational system in Gaza is under Hamas’s control). 
These accomplishments are not small and I do not belittle them. But when the focus turns to the broader political context (elections, political parties) or society (NGOs, professional associations), Fayyad simply has no instruments at his disposal to stop or even slow the alarming decay.
Does it really matter that Fayyad is only improving existing institutions, rather than building new ones? 
Not really, but understanding the history of Palestinian institutional development can help us project its current ills and likely course a bit more accurately.
Since Fayyad’s cabinet was formed in 2007, there have been very few new institutions built, as I noted in the last paper. But the pre-existing nature of Palestinian institutions was simply not the source of my pessimism regarding Fayyadism or my criticism of the international reliance on Fayyadism. Instead, I claimed that a broader and long-term view of Palestinian institutions and their trajectory simply does not present a happy picture. While there has been limited progress in some institutions, others have undergone stark regression. The contrast I drew with the 1990s was to show how more institutional progress was made as a result of a messy political process with genuine democratic elements than with the current purely technocratic and authoritarian approach.
It was during the 1990s that ministries were built, comprehensive laws were written, a new curriculum devised, procedures designed, elections held, and regulations written. By the late 1990s, there were increasing signs of competence, participation by civic groups, and transparency. And there were gaping holes—international disinterest, presidential suspicions, Israeli contempt, and an overemphasis by almost all governments (Israeli, Palestinian, and American) on security.
In the previous paper, I focused on the areas of institutional development I am most familiar with (based on fifteen years of intermittent research on Palestinian politics) and compared the “state building” of the last few years—an anti-political, authoritarian, and limited process—to that which took place during the Oslo period, when real institutions were built. The earlier process was messy, uneven, and deeply problematic as large parts of it were resisted by the then-Palestinian leader and sometimes undermined by the international community. But it was still a genuine political process and one that was therefore far more deeply rooted in society than the present antiseptic and technocratic effort.
One of the flaws of the earlier efforts—the emphasis on security in a manner that undermined the rule of law and undermined regime legitimacy—is actually being repeated today under international pressure.
Is it accurate to say that Fayyadism is only limited to Ramallah?  Isn’t it more fair to acknowledge that he is trying to cover the entire West Bank? 
Both statements are largely true. Fayyadism is most effective in Ramallah. But Fayyad’s cabinet is trying desperately to extend its reach. That effort should be noted and probably deserves support. But it is inherently limited.
There is no doubt that Fayyad and his cabinet have launched a large number of local projects throughout the West Bank. I noted in my earlier paper how Fayyad has personally been visible outside of the major cities and how much of a departure this was from the behavior of previous officials. 
The point can also be made more generally: Fayyad has placed the issue of Palestinian Authority jurisdiction over Area C back on the table, an impressive political accomplishment. The Oslo Accords divided up the West Bank into three areas. Area C—large in area but sparse in population—is often referred to as operating under total Israeli control. That is not supposed to be the case. Palestinians in Area C were to be governed by Palestinian civil institutions but security and some other areas were under Israeli control. In other words, Palestinian schoolchildren in Area C were to attend Palestinian schools run by the Palestinian Authority educational system, but no Palestinian police could operate there. (Area C was also supposed to diminish in size, but that process stopped over a decade ago.) That arrangement never worked well even when the Oslo process was at its height; since the beginning of the intifada Palestinian Authority operations in Area C have suffered decay and neglect. Fayyad is trying to reverse that. 
But as with Fayyadism generally, the new thrust in Area C might be laudable but cannot be seen as tantamount to state building. First, it is limited by the occupation: as others have noted, “Israel’s control of Area C remains undisturbed.” Second, it may deliver new school buildings and more wells, but it cannot deliver better politics: local elections were cancelled earlier this year by the same Fayyad cabinet that is promising better services.
If the programs are popular with the Palestinian people, doesn’t that make Fayyadism democratic?
No.  Such a claim is based on a misunderstanding of polls in general and of Palestinian poll results.
Palestinian political polls have risen in sophistication and provide valuable information, but they are a single (and sometimes volatile) measure of political dynamics. At present, Palestinian public opinion has not coalesced around any heroes (and provides evidence of increasing political alienation), but it is indisputable that Fayyad’s standing has risen. And more broadly, he is treated with a bit more respect domestically and has discovered a political voice.
The problem with relying on polls is obvious: popularity in the polls can be ephemeral; it certainly does not deliver a mandate and can evaporate at a whiff of misstep or crisis. It certainly does not translate into an institution or state-building project. And the polls obscure the underlying problem that there is no organized political base for Fayyad’s technocratic project. 
The relationship between polls and institution building might best be seen by a reference to the local elections fiasco. These were abruptly cancelled earlier this year when Fatah proved so disorganized that it asked President Abbas to direct Fayyad’s cabinet to cancel the call it had issued earlier. If standing in the polls translated into institutional strength, how was the prime minister and his cabinet so easily cowed? And had the elections not been cancelled, no Fayyadists would have won—because none were even running. 
If Fayyadism is not building a state, what is the alternative?
My earlier paper was long on diagnosis and short on cure. And there is no easy alternative to the current policy. Indeed, I would not present any policy suggestions as an alternative in a literal sense: there is no reason to abandon current policies. But there is a desperate need to supplement them and stop the unpersuasive charade that they are sufficient in themselves to move toward a solution. 
More specifically, I do not suggest that Fayyadism be abandoned (though the most obvious authoritarian practices such as illegal arrests and political purges pursued in the West Bank should probably be rethought immediately because of their high political costs). Nor do I suggest that Western support for Palestinian institution building be abandoned. Indeed, the sudden high-level U.S. attention to the details of Palestinian institutional development is a welcome departure from the Clinton years (when there was a marked indifference at top levels) and the Bush years (when senior leaders gave strong verbal but virtually no practical support outside of the security sector). 
A variety of approaches are available. My Carnegie colleague Michele Dunne has sketched out one that integrates Israeli–Palestinian diplomacy with attention to Palestinian politics. A year and a half ago, I offered a more radical proposal that involved postponing conflict-ending diplomacy but also called for far greater attention to Palestinian political realities. What we share is a belief that reviving Palestinian political life is vital to any attempt to resolve or even to manage the conflict. The existing approach, based on an assumption that a comprehensive Israeli–Palestinian agreement can be negotiated and then used as a device for ousting Hamas from control of Gaza is implausible. Yet it has been the basis of United States policy since 2007 and has been endorsed by Fayyad. 
No mechanism has been publicly offered for reuniting the Palestinian Authority other than elections—which, given the current circumstances, are highly unlikely. Supporters of Fayyadism who decry the undemocratic actions of Hamas (on the plausible grounds that it seized power in Gaza and has blocked the work of the electoral commission) do not explain why they think Hamas could be convinced or coerced into allowing a referendum or national elections. And the actions of the Ramallah government (which showed little respect for the results of the 2006 elections, claimed constitutional authorities they clearly did not possess, decreed an electoral law that bars Hamas from running, and cancelled local elections for specious reasons) hardly give it the democratic high ground.
But if the present approach is unworkable, it is not clear that any quick fix will work. It must be frankly acknowledged that attention to Palestinian reconciliation would probably make progress on Israel–Palestinian negotiations impossible for the present.  An approach that takes Palestinian politics seriously and prioritizes rather than postpones the issues of Gaza and Hamas would be difficult in its design, uncertain in its effectiveness, distasteful in its implications, and necessarily slow in its progress. But at least it would be grounded in the realities of today rather than pretending that the conditions of the 1990s—a viable peace process and a slowly emerging Palestinian polity—still obtain.
If Fayyadism is limited in what it can accomplish, why has it generated so much support? Do international backers have a solid appreciation of the realities on the ground?
Most observers close to the ground—even those who are, like me, respectful of Fayyad personally—note the limitations of what his program has done and can accomplish. While I focused on law and education, those whose expertise lies in other areas report findings analogous to mine. 
For instance, in the economic sphere, many observers note that the Fayyad cabinet has presided over impressive rates of growth but note deep structural problems (a reliance on foreign assistance, continued restrictions on mobility, general political fragility) that collectively suggest we are witnessing a partial recovery rather than the flourishing of sustainable long-term economic development.  For instance, a recent report by the United Nations Conference on Trade and Development noted:
The economy of the occupied Palestinian territory (oPt) continued to perform well below potential in 2009. There were signs of improvement in GDP growth and other indicators, but these need to be interpreted cautiously in view of the wider context. Territorial fragmentation, inequalities and welfare divergence continued to grow, aid dependence deepened, and access to natural and economic resources shrank. Private investment continued to be hampered by mobility restrictions and the risk of introducing new restrictions at any moment.
Similarly, the International Crisis Group focuses on the security sector and advances a respectful warning:
The undeniable success of the reform agenda has been built in part on popular fatigue and despair—the sense that the situation had so deteriorated that Palestinians are prepared to swallow quite a bit for the sake of stability, including deepened security cooperation with their foe. Yet, as the situation normalizes over time, they could show less indulgence. Should Israeli–Palestinian negotiations collapse—and, with them, any remaining hope for an agreement—Palestinian security forces might find it difficult to keep up their existing posture.
The reform agenda also was built on the intra-Palestinian split which, in the short term, has helped foster greater PA–IDF cooperation. Still, the intensity and scope of the anti-Hamas campaign carry many important consequences. They have undercut the PA’s claim to be the true national authority, weakened President Abbas’s mandate to speak in the name of all Palestinians and diminished prospects for reconciliation, thereby both complicating Israeli–Palestinian negotiations and enhancing Hamas’s incentive to disrupt them. In the longer run, the split with Hamas and disregard for democratic norms are thus deeply at odds with the emergence of a strong, representative, legitimate national movement upon which Palestinians, but also Israelis, depend to achieve and sustain a historic peace agreement.
Yet if analysts and those on the ground recognize the limits of Fayyadism, there are many who are so invested in its success (and many as well who are invested in its failure) that they tend to read reality only through the lenses of their wishes. Those who warmly greeted my paper for their own political reasons ranged from settler blogs in the West Bank to the pro-Hamas Palestinian daily in Gaza—though the latter found no room in its summary for my description of Hamas as a “bloody-minded” movement. On the other hand, Fayyad himself dismissed it as “childish.”1
The paper generated a similar pattern of reactions from those in official positions in the United States, Europe, and Palestine (many of which were relayed to me indirectly). In general, mid-level analysts, officials, and observers in all three locations have come to conclusions similar to mine. But those at more senior levels, especially those most invested in the current policies, have reacted more negatively and viewed it as politically damaging. The fact that they have been made aware of the paper at all is perhaps evidence of the deep disquiet over the direction of policy in the middle and lower ranks.

1 It is, of course, perfectly legitimate to call into question the soundness of any research. But in an uncharacteristically harsh tone, Fayyad appeared to base a portion of his criticism on the anonymity of sources: “‘I talked to people.’ Who are they? I would like to know how many people he talked to.” I can answer questions about methods but not about names; without a guarantee of anonymity, nobody would speak candidly and research would become impossible.