Initial estimates are presented of the costs and benefits procured from Israeli gambling and tourism across the border in Taba. Then, alternative models of development are considered and more competitive scenarios, such as Eilat developing gambling sites that compete with those at Taba. Simulations of these scenarios are presented as well as alternatives. In these cases too, estimates indicate that the costs to Eilat will remain high. Estimates are presented relating to the social costs incurred by gambling-based local economic development.
Results indicate high social costs incurred in a situation of open borders and closed markets.
The political implications of cross-border relations are examined and their ramifications for similar relations with other neighboring entities, such as the Palestinian Authority. Such a tie is possible only in a regulative environment, preventing a competitive market. Assuming that it is somehow possible to maintain cross-border cooperation, a policy decision on appropriate political and administrative agreements is required, which can promote and implement cooperation. This is an altogether different subject to that of inter-municipal cooperation, and is based on economic efficiency rather than on sovereignty and its attributes. Taking these into consideration, the study suggests that the chances of success for an institutionalized agreement depends on advancing a 'cluster' of economic projects on both sides of the open border.