This project will examine the connection between attitudes toward economic reform, national identity, and government policy in the Palestinian Territories. Specifically, we will seek to understand how both the demand for nationally autonomous state institutions and the exigencies of prudent fiscal management shape bureaucratic reforms within the Palestinian Authority (PA). Current PA policies are influenced by two seemingly conflicting goals: first, increasing the presence of de facto sovereign state institutions in Palestinian political life and, second, reducing the economy’s reliance on state spending. Under such conditions, what factors shape the size of the bureaucracy? In the Palestinian case, does nationalism translate into bureaucratic contraction or expansion? Drawing on existing scholarship on nationalism and bureaucratic reform, the project will make an original contribution to our understanding of the role of the state in economic development in transitioning economies. The project will rely on fieldwork that will be conducted in the Palestinian Territories during the summer of 2011, including interviews with relevant ministry staff and local municipal councils across a selection of West Bank governorates, Palestinian citizens representing varied employment status and occupations, and refugee camp residents as access permits. We will also exploit data from four public opinion surveys conducted in the Palestinian Territories between 2003 and 2010 to test our propositions. Although the Palestinian political and economic context represents a special case, the project will contribute to our broader understanding of bureaucratic efficiency and public attitudes toward economic reform in contexts of instability and conflict. As recent events have shown, many governments in the Middle East are grappling with maintaining a strong role for the state in economic development while also promoting alternative sources of job creation amidst public discontent. Observing the development of the PA’s bureaucratic institutions at this early stage will provide insights applicable to other economies, in the region and elsewhere, which depend on high levels of government spending and public sector employment yet are undergoing institutional change to accommodate growing private sectors.