Checkpoint Intensity and Firm Productivity: Long-Term Economic Effects in the West Bank

This paper examines the long-term economic impact of movement restrictions in the form of checkpoint intensity on private sector productivity in the West Bank. Drawing on a conceptual production framework and calibrated sectoral simulations, the study analyzes how transaction costs, labor market frictions, capital accumulation delays, information asymmetries, and security-related uncertainty affect firm-level total factor productivity. A structured empirical strategy combining sectoral data and exposure-based variation is used to evaluate productivity differentials across manufacturing, services, tourism, and rural enterprises. The results suggest that sustained checkpoint intensity is associated with persistent productivity gaps, particularly among export-oriented firms and geographically peripheral enterprises. Calibrated long-run growth projections indicate that cumulative output losses may range between 10–15 percent over extended horizons. The findings highlight the economic trade-off between short-term security considerations and long-term growth potential and underscore the role of infrastructure and administrative reforms in partially mitigating productivity losses.