Policy Performance


Economic Policies

Showing steady economic growth, Israel receives comparatively high rankings (rank 11) in the area of economic policies. Its score on this measure has improved by 0.3 points relative to 2014.

Growth rates are robust if declining slightly, with 3.5% growth expected for 2017, and 3.3% in 2018. Inflation has risen to a marginally positive level after several years of negative figures. Budget deficits are on the decline, reaching moderate levels. A new capital authority oversees the financial sector.

Unemployment rates are low, with the economy hovering near full employment. Programs support the labor-market integration of ultra-Orthodox communities, but employment rates among men here remain comparatively low. The cost of living is high, with housing and rental prices showing clear increases in recent years.

Taxation policy is deliberately somewhat regressive, involving VAT and an income tax that applies disproportionately high rates to middle-income earners. Research and development funding is extraordinarily strong, and a new Innovation Authority began work in early 2017.

Social Policies

With significant concerns over equity, Israel falls into the lower-middle ranks (rank 26) with respect to social policies. Its score in this area has fallen by 0.1 point relative to 2014.

The education system is split, with greater funding and stronger performances within secular Hebrew-language schools than in Arab-language or ultra-Orthodox institutions. Income inequality is significant, and the relative poverty rate is quite high despite recent improvements, with poverty rates within the Arab minority substantially higher than in the majority Jewish population.

Health care provision is universal and generally of high quality, although recent privatization campaigns may have reduced efficiency. Programs offer subsidies for child care up to the age of five, as well as free early childhood education between the ages of three and four. The share of women in the workforce is nearing that of men, but the gender wage gap is very large.

Recent pension reforms have lowered pension fees and made Israeli pensions mandatory for self-employed workers. 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 forced deportations. Internal security is tightly bound up with national defense.

Environmental Policies

Despite notable progress particularly on its climate record, Israel falls into the bottom ranks internationally (rank 39) with regard to environmental policies. Its score on this measure has declined by 0.4 points relative to 2014.

The country has made significant recent environmental-policy advances. In 2016, it ratified the Paris climate agreement, and approved a new energy-efficiency and emissions-reduction program. A reduction in emissions intensity was reported in 2017.

One of the world’s largest solar-power stations has been sited in the Negev desert. A green-tax policy encourages consumers to purchase less pollution-intensive cars.

With insufficient water reserves, the country is a leader in desalination and related innovations. International coordination efforts include a focus on water and desertification issues. A strong industrial sector is dedicated to sustainable water, energy and environmental technologies.



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 0.5 points relative to 2014.

Despite generally open and free elections, candidates can be banned for rejecting Israel’s Jewish identity, among other issues. Parties receive private and public funding, with considerable spending oversight and large fines levied for rule violations. A new law tightens oversight of overseas money being used to influence domestic elections.

Israeli Arabs’ underrepresentation in the broadcast media and in public-opinion surveys has gained new attention. Military supervision and censorship of media outlets has intensified. Laws penalizing criticism of the Israeli state or Israeli symbols are becoming more common. Arabs experience systematic discrimination and infringements of civil rights, and are politically marginalized.

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 a range of strategic-planning concerns, Israel falls into the lower-middle ranks (rank 24) with respect to executive capacity. Its score on this measure has fallen by 0.2 points since 2014.

In recent years, the PMO has become more deeply involved in policy proposal and development. Planning reforms within the PMO have facilitated this process, but line-ministry planning-unit heads also have significant proposal-development authority. Ministerial committees and informal coordination mechanisms are both influential.

A recently implemented RIA program is showing early positive signs. The civil-society sector is gaining a stronger voice within society, and thus coming to influence policy. Inconsistent ministry policy statements are not uncommon. In part because budgeting is highly centralized, ministries act territorially.

A new tracking system shows that a high rate of governmental decisions are implemented. Efficiency is sometimes enhanced through the use of a highly controversial emergency law instead of the ordinary legislative process. Major improvements have been made with regard to monitoring ministries. A new funding and support program for municipalities should reduce local inequalities.

Executive Accountability

With some legislative weaknesses, Israel falls into the upper-middle ranks internationally (rank 15) with regard to executive accountability. Its score on this measure has increased by 0.1 point relative to 2014.

Parliamentarians have adequate resources, but executive practices undermine formal oversight powers. Some lawmakers are pushing to expand parliamentary oversight capabilities. 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 often focuses on prominent and popular topics, it also produces substantial reporting on policy and long-term strategies.

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 recently passed “transparency” measure aimed specifically at left-wing and civil-rights NGOs is viewed by critics as undermining democratic institutions.
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