Political economy analysis harbors powerful tools for conceptualizing the current state of the Occupied Palestinian Territory (OPT), both in regards to its developmental condition, and vis-à-vis the tactics and strategies employed by the national movement and its actors. While recent scholarship has begun to apply this analysis, the general tendency of Palestinian scholarship avoids addressing these matters. This article addresses three related aspects of the OPT’s political economy in an effort to identify and fill in some analytical gaps, while re-appropriating its tools for Palestinian scholars and policy practitioners alike. It first looks at the structural determination of the OPT’s political economy, as a function of an invisible yet consensual division of labor between the international donor community and Israel with regards to the basic parameters circumscribing Palestinian development. This is captured in the notion of the “peace process regime” which functions as a discursive, political and economic tool to enforce the de-development of the OPT, and engineer political consent to this arrangement. It then looks at some of the intellectual underpinnings of the modeling these policies are partially informed by, relating them to transformations in the normative neoliberal development agenda and its transformation from Washington consensus to post-Washington consensus. Finally, it briefly sketches the application of this modeling in international aid paradigms to the OPT, focusing on the two main ways in which these ideas have been applied: an Arafat-led model and a bureaucratic-institutionalist model more reliant upon producing elite cooptation of social classes than on individual decree.