In assessing why the Oslo agreements between Israel and the Palestinian Authority failed, questions arise as to whether the failure was due to poor governance and poor leadership on the Palestinian side, how far corruption and the weakness of democracy in the Palestinian Authority were responsible, and what were the effects of the economic and political relationships which Oslo sought to construct between Israel and the emerging Palestinian state. This book examines these key questions, and challenges the widely prevalent view that the Palestinian Authority collapsed because of its internal governance failures, its lack of commitment to democracy, and corruption. It argues that the analytical framework of 'good governance' is not appropriate for assessing state performance in developing countries, and that it is especially inappropriate in conflict and post-conflict situations. Instead, an alternative framework is proposed for assessing state performance in a context of economic and social transformation. This is then applied in detail to different aspects of state formation in Palestine, showing that the institutional architecture set up by the Oslo agreements that governed relationships between Israel and the Palestinians, especially the asymmetric control over the Palestinian state which followed from this, was responsible for many of the serious failures of governance in this first period of state formation.