15 March 2007 - The no-deal option

I’ve been delving into negotiation theory lately, among other theoretical sources, in order to better understand the patterns of behavior in the Israeli-Palestinian conflict. One of the most important concepts in negotiation theory is the BATNA—the best alternative to a negotiated settlement, also known as the “no-deal option.” Each party in a negotiation process has a BATNA, and some are worse than others.

In the Oslo peace process, the Israeli BATNA was the status quo of occupation. Israel began negotiating because it hoped to get something better out of a deal—greater international legitimacy, improved security, perhaps even recognition of some claims in the occupied territories. But when Oslo began to go sour, the no-deal option looked more attractive, and Israel suspended participation, more than once.

As for the Palestinian leadership, the BATNA was really rather bad—continued intifada. Some Palestinians convinced themselves that continued struggle and repression really were better options. In the wake of Israel’s unilateral withdrawal from Lebanon in 2000, many other Palestinians may have been convinced that fighting wasn’t such a bad no-deal option after all, and possibly better than peace.

One of the books I’ve been reading, 3D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals, by David A. Laz and James K. Sebenius, talks about the double-edged nature of the BATNA. On the one hand, if parties have bad BATNAs, there’s a greater incentive to negotiate. On the other hand, when parties have good BATNAs, the other parties all know they have to negotiate.

It follows that if you want the best deal, you should try to improve your own BATNA while weakening that of your opponent. So, it should perhaps come as no surprise that Israel built more settlements during the Oslo peace process and also increased the number of checkpoints: it was making occupation more attractive for itself, and a return to violence less attractive for the Palestinians.

What about the other side? The Palestinian leadership, one could argue, made Israel’s BATNA worse by continuing to threaten violence, and by embarrassing it on the world stage through exposing the continued abuses of the occupation. But Arafat and his cronies did nothing to make the Palestinian BATNA better than a return to terror: they enriched themselves rather than building institutions.

The second intifada made Israel’s old BATNA worse by increasing the costs of occupation. But even a worse BATNA was better than negotiating with a Palestinian leadership committed to violence. Eventually, Israel did something quite innovative: it changed its own BATNA by building the security barrier in the West Bank and carrying out the disengagement from Gaza in August 2005.

These measures were controversial, and had some negative costs to human rights—not just for Palestinians, but for uprooted settlers, too. However, they also meant that Israel had a no-deal option that did not involve exposing its soldiers or civilians—or those of the Palestinians—to continued violence. To achieve this BATNA, Israel also had to pay the cost of giving up the idea of “Greater Israel,” but it was worth it.

There are three caveats to consider. One is that a real negotiated peace would still be better than Israel’s no-deal option, since terror groups still fire rockets from Gaza. Another is that this BATNA may make negotiations more difficult, because Israel’s alternative is so much better than it was before that Palestinians may have to offer a lot—more than they may be prepared to—in order to get Israel back to the table.

Then there is also the problem that the Gaza disengagement, like the Lebanon withdrawal, may have convinced Palestinian leaders that their bad BATNA is not so bad after all. That is a mistake, and can only be rectified in two completely different ways: by thoroughly crushing the ability of Palestinians to wage violence, or else by sweetening a potential deal, perhaps beyond what is reasonable for Israel.

There may be a third way: intervening to improve Palestinian no-deal options by doing what the Palestinian leadership should have done from the beginning: building institutions, creating a functional state and a growing economy. That may be impossible for Palestinians to do on their own, and may require direct intervention by a party that is trusted by both sides. Another occupation? Maybe it’s come to that.