Fiscal Sovereignty under Constraint: A Qualitative Analysis of Palestine’s Public Finance System

This article was retracted on March 10, 2026.http://dergipark.org.tr/en/pub/fiad/article/1906666This study aims to examine Palestine's public finance system within the framework of structural dependency, fiscal sovereignty, and a postcolonial public finance perspective. The main focus of the research is the limited tax collection capacity of the Palestinian Authority (PA), the lack of fiscal autonomy, and the decisive influence of external actors—particularly Israel and international financial institutions—on the Palestinian budget. The study critically evaluates the implications of the Paris Economic Protocol and its restrictive role on Palestine's fiscal sovereignty. The research was conducted using qualitative methods, and the existing literature, reports from international organizations (IMF, World Bank, UNCTAD), academic articles, and data sources were examined. It was found that a significant portion of the Palestinian public budget is based on indirect taxes collected by Israel, that this system operates under the name of “clearance revenues,” and that serious financial leaks occur through this method. Furthermore, it was revealed that foreign aid has become a structural element in closing the budget deficit; however, this aid is largely dependent on political conditions and weakens financial independence. The findings of the study show that the Paris Protocol has created a permanent rather than temporary guardianship system, which weakens fundamental elements such as accountability, transparency, and financial planning. Furthermore, it has been understood that reform processes shaped by foreign aid have been imposed without social acceptance in Palestine, and that public finance is guided by international agendas rather than local needs. As a result, the issue of financial sovereignty in Palestine should be addressed not only as a technical public finance issue but also as a structural problem area directly linked to political representation, independence, and development.