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 0.5 points relative to 2014.

Growth rates are robust, reaching 3.6% in 2018, and a similar level expected in 2019. The inflation rate has risen to a marginally positive level after several years of negative figures. The budget deficit has jumped to 3.3 percent, exceeding a legally mandated deficit ceiling. A recently created capital authority oversees the financial sector.

Unemployment rates are low, with the economy hovering near full employment. Employment rates are slightly lower for Israeli-Arab men than for the general population, though jobs in this population skew toward lower wages. Employment rates among Israeli-Arab women are very 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. Computer-science degrees are subsidized for students with disenfranchised backgrounds.

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 is unchanged 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 poverty rates are quite high, with poverty within the Arab minority and ultra-Orthodox community much more common than in the majority Jewish population.

Health care provision is universal and generally of high quality, although budget cuts and staff layoffs have called sustainability into question. 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 primarily directed toward ethnic-Jewish immigrants. 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 some recent progress in climate-change policy, Israel falls into the bottom ranks internationally (rank 39) with regard to environmental policies. Its score on this measure has declined by 0.6 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. It has signed or acceeded to numerous other environmental conventions.

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 scores relatively poorly (rank 31) 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. Critics argue that a new law diminishing state funding for joint party lists was designed to break up an Arab party group.

Israeli Arabs’ underrepresentation in the broadcast media and in public-opinion surveys has gained new attention. A new online-content law allows authorities to demand removal of a wide range of content online. 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

Showing strides forward in a number of areas, Israel falls into the middle ranks (rank 21) with respect to executive capacity. Its score on this measure has fallen by 0.1 point since 2014.

In recent years, the PMO has become more deeply involved in policy proposal and development. Planning and strategic-capacity reforms within the PMO have facilitated this process. Draft legislation is developed within ministries, but a PMO representative is generally on the development team. Ministerial committees and informal coordination mechanisms are both influential.

A recently implemented RIA program is showing positive signs. Stakeholder engagement in the regulatory process has improved, and public consultation has become more widespread. A long-term plan orients policy toward the Sustainable Development Goals. Communication has become more coherent. In part because budgeting is highly centralized, ministries act territorially.

A tendency to outsource government services has continued, with somewhat lax oversight. The government has a good record in enforcing regulations despite interest-group pressure. A problem of ineffective or even a lack of implementation persists, though monitoring efforts have helped the government reach goals more frequently.

Executive Accountability

With some legislative weaknesses evident, Israel falls into the middle ranks internationally (rank 20) with regard to executive accountability. Its score on this measure has declined by 0.2 points relative to 2014.

Parliamentarians have adequate resources, but executive practices sometimes 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. Different agencies oversee citizen data protection and national cybersecurity.

Citizens are highly interested in politics, and participate actively. While the media often focuses on prominent and popular topics, it also produces substantial reporting on policy and long-term strategies. Younger Israelis are beginning to trust social media more than traditional media.

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, while another seeks to limit lawsuits against government policy.
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