Policy Performance


Economic Policies

Showing steady economic growth, Israel falls into the upper-middle ranks (rank 14) in the area of economic policies. Its score on this measure has improved by 0.2 points relative to 2014.

Growth rates are strong, with 3.8% growth expected for 2016. Inflation is declining, and the employment rate rising. The country’s fiscal stability enabled it to withstand the financial crisis, and deficits remain moderate. A new capital authority oversees the financial sector.

Labor policy focuses on incentivizing two income households and expanding job training services for low-skilled workers. Unemployment rates are low. Programs support the labor-market integration of ultra-Orthodox communities, but employment rates among men here remain low. The number of foreign workers has fallen, but there is a large number of undocumented workers.

Taxation policy is somewhat regressive, involving VAT and an income tax that applies disproportionately high rates to middle-income earners. Despite recent cuts, considerable support is provided to public and private-sector research. Israel is strongly represented in international patent registrations.

Social Policies

With significant concerns over equity, Israel falls into the lower-middle ranks (rank 25) with respect to social policies. Its score in this area has fallen by 0.2 points relative to 2014.

The education system is split, with achievement lower among orthodox-school and Arab-Israeli pupils. Compulsory education has been extended from 15 to 17 years, with free early-childhood education beginning at three years of age. Income inequality is significant, and the poverty rate quite high despite slight improvements.

Health care provision is universal and generally of high quality. Child allowances, child-care services and maternal-leave policies promote families as well as a work-parenting balance. The share of women in the workforce is nearing that of men, but the gender wage gap is very large, as are Arab-Jewish pay differentials.

A new pension reform lowers pension fees. Integration efforts are directed toward ethnic-Jewish immigrants, with others suffering from ad-hoc policy failures. A policy addressing illegal migration from Africa relies on detention centers and transfer to third countries. Internal security is tightly bound up with national defense.

Environmental Policies

With security concerns overshadowing environmental issues, Israel falls into the bottom ranks internationally (rank 40) with regard to environmental policies. Its score on this measure has declined by 0.3 points relative to 2014.

Climate policy is a key challenge, with Israel’s emissions-reductions commitments remaining modest. A new program aimed at reducing emissions and increasing energy efficiency was passed shortly after the Paris Climate Conference. Market-based mechanisms encouraging energy-use reductions have not been accompanied by sufficient alternatives.

With insufficient water reserves, the country is a leader in desalination and related innovations. Regulation and prevention of water pollution remains problematic, and biodiversity a concern. International coordination efforts have largely been focused on water and desertification issues.



Quality of Democracy

With ongoing tension over its treatment of Palestinians, Israel receives low rankings (rank 30) with regard to democracy quality. Its score on this measure has declined by 0.4 points relative to 2014.

Despite generally open and free elections, candidates can be banned for rejecting Israel’s Jewish identity, among other issues. A controversial new law allows parliamentarians to be suspended. Parties receive private and public funding, with considerable spending oversight and large fines levied for rule violations.

Political pressure on private media has increased. A free right-wing paper funded by a wealthy American has gained substantial market share. Military censorship of media outlets has increased. Arabs experience systematic discrimination and infringements of civil rights, and are politically marginalized. A recent surge in violence by Palestinians has resulted in “extreme” retaliatory measures by the state.

Gender equality remains a significant concern. The judiciary is independent and regularly rules against the government. A number of prominent politicians have been involved in corruption scandals, with investigations targeting the prime minister and other figures.



Executive Capacity

With an activist prime minister’s office, Israel falls into the lower-middle ranks (rank 26) with respect to executive capacity. Its score on this measure has fallen by 0.3 points since 2014.

In recent years, the PMO has become more deeply involved in policy proposal and development. Ministries often fail to communicate with each other effectively. Strategic planning is typically outsourced to consultants. The government frequently draws on military rather than academic expertise.

An RIA program is in the early stages of implementation. Protests have pushed the government to consider more substantive consultation mechanisms, but implementation remains partial. Inconsistent ministry policy statements are not uncommon. In part because budgeting is highly centralized, ministries act territorially.

A significant share of government decisions goes unimplemented. The PMO has created a system for monitoring implementation, and has exposed potentially productive areas for improvement. Appointments in the public service and state-owned enterprises can be politicized. Grants to high-tech companies engaging in international joint ventures have been cut.

Executive Accountability

With some legislative weaknesses, Israel falls into the upper-middle ranks internationally (rank 16) with regard to executive accountability. Its score on this measure has increased by 0.2 points relative to 2014.

Parliamentarians have adequate resources, but executive practices undermine formal oversight powers. The State Comptroller serves as an independent auditor and ombudsman, but holds no power to issue sanctions.

Citizens are highly interested in politics, through this does not automatically translate into policy knowledge. While the media does produce substantial reporting on policy and long-term strategies, concerns over government influence and biased content are growing.

The large number of political parties vary strongly in their internal decision-making processes. Business organizations are sophisticated and work closely with the government. A new “transparency” measure aimed specifically at left-wing and civil-rights NGOs is viewed by critics as undermining democratic institutions.
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