The financial crisis facing the Palestinian Authority (PA), which has left it unable to pay its employees, has had negative consequences for Palestinian society. The crisis has affected the PA’s popularity and the stability of Palestinian society, and it has increased anger and tension between the PA and the people. 

During the three months of October, November and December, the PA paid its employees one month’s salary in two installments. Meanwhile, the Hamas government has managed to pay its employees on a much more regular basis. 

Ever since the Palestinian split in June 2007, the Hamas government in Gaza and the PA in Ramallah have competed with each other on several levels — especially their ability to pay their employees and demonstrate their sound management. To be sure, the two governments are very different in terms of the number of employees and the size of their monthly expenses, but the crisis has weakened the PA's position in its competition with Hamas.

While the PA spends $205 million on monthly salaries for its roughly 160,000 employees in the West Bank and the Gaza Strip, Hamas’ monthly wage bill for its 42,000 employees in Gaza amounts to $37 million. The PA’s annual budget for 2012 reached about $3.9 billion, while the Hamas government’s budget for 2013 was estimated at $890 million. Furthermore, the Hamas government does not assume any financial responsibility in the West Bank, as opposed to the PA, which continues to pay the salaries of its 55,000 employees who have stopped their work in the Gaza Strip.