AMIDST ALL OF THE USUAL GLOOM AND DOOM that emanates from discussions of the contemporary Middle East, one development has generated a great deal of ink and hope among proponents of an equitable and viable Palestinian-Israeli peace settlement: “Fayyadism”, the efforts by Palestinian Authority Prime Minister Salam Fayyad to build the administrative, economic and infrastructural base for a future Palestinian state, with the declared goal (in 2009) of establishing a de facto state apparatus within two years, and then gaining international recognition from the UN Security Council.A recent article in Foreign Policy magazine by the Palestinian- American Hussein Ibish lauds what he calls the paradigm shift that has taken place among West Bank Palestinians, who “are increasingly turning to the mundane, workaday tools of governance and development as their principal strategy for ending the occupation.” This has also been the theme of numerous visiting Western journalists. The optimism generated by Fayyadism, although not totally misplaced, is excessive. It comes from a widespread recognition that the failure of the Palestinian state-building project during 1994-2000 was central to the collapse of the Oslo process. Admittedly, Yasser Arafat and his Fatah movement had been dealt a weak and difficult hand, but they were nonetheless the primary culprits. Arafat established a neo-patrimonial and corrupt regime, without achieving the necessary monopoly on the means of coercion. Fatah never sufficiently transformed itself from a liberation organization to a proper political party ready to play the leading role in a state-on-the-way.The contrast between a corrupt, power-hungry, undisciplined and sclerotic Fatah movement and an uncorrupt Hamas, whose ability to deliver social, educational and welfare services as well as confront Israel won it enormous legitimacy among the populace, was striking.Palestinian society has always suffered from a high level of factionalism and localism, which probably underlay many of the problems in building institutions.Indeed, these issues are still present. Fayyad is a polished economist and banker, with long experience in the World Bank and the International Monetary Fund. Although born in the West Bank town of Deir al- Ghusun, near Tulkarm, he has no preexisting power base of his own, while his control of the purse strings has created much resentment among Fatah cadres keen on attaining the benefits of a ruling faction. To be sure, Fayyad spends a great deal of time “in the field,” making his presence felt in a variety of settings. His encouragement of grassroots efforts to resist the occupation, such as a boycott of Israeli products produced in settlements, resonates among the public.He is also apparently the reason that Lt.-Gen. Keith W. Dayton will be stepping down in the fall, after having served for five years in his post as US Security Coordinator for Israel and the PA. Sensitive to criticism that the PA security forces are doing Dayton’s bidding, rather than the PA’s, Fayyad acted to have him replaced in order to bolster his own legitimacy.Two recent complementary studies by the Carnegie Institute for International Peace raise serious questions regarding the Fayyad project, although their recommendations may be no more likely to produce the desired results. Carnegie Institute Senior Associate Michele Dunne’s analysis, which is directed primarily at US policymakers, believes that a durable state-building plan must be accompanied not only by Israeli-Palestinian negotiations but also by the “resumption of politics,” i.e. bringing Hamas into the game by allowing political competition. She may well be right that Fayyad “cannot complete reforms and make them sustainable without the buy-in that comes from electoral politics.” On the other hand, he may not be able to do so with it, and the prospects of intra-Palestinian reconciliation, let alone on terms that would be complementary to a workable Israeli-Palestinian peace settlement, seem as far away as ever.Similarly, Nathan Brown, a long-time and knowledgeable observer of Palestinian affairs, linked the prospects of successful state-building to achieving democratic legitimacy. But is the linkage in fact Gordian? Isn’t there a middle ground between the establishment of a political entity whose rule is based only on coercion and one which is a Western-style full democracy based on the rule of law, separation of powers and competitive elections? In any case, after intensive meetings with West Bank Palestinians, Brown concludes that Fayyad’s admirable efforts are not leading in the direction of statehood. To be sure, he has registered important successes in achieving international respectability (crucial for maintaining financial solvency), fiscal discipline, security, and an improved economy.However, he notes, there is no legitimate constitutional basis for the government, and there has not been significant progress in promoting the rule of law, neither in the courts nor legislatively. Civil society institutions (e.g. the Bar Association) have not been strengthened, and are infected by political factionalism.The Israelis, for their part, are keenly aware and concerned that Fayyadism is heavily dependent on one man, Fayyad.Given his options, as Brown says, Fayyad will most likely soldier on, keeping the Ramallah government afloat and registering administrative and fiscal successes until something better comes along. In the meantime, one can find any number of ways that things can unravel, beginning with the explosive tinderbox of East Jerusalem. One can only hope that Israel, the Palestinians and the US understand the need to nurture the baby shoots of progress in the West Bank and pursue policies that will protect them and allow them to grow.