Category Archives: Additional Areas

Objectives and Recommendations for the 34th Government of Israel

Center researchers have mapped the challenges facing the country in the fields of macroeconomics, the labor market, education, social services, and healthcare, and have suggested practical policy measures that can lead to improvements in these areas.

These recommendations do not represent a single vision; they have been written by researchers with differing perspectives and opinions on the situation in Israel. They do, however, share a common thread. They see the problem of inequality and widening gaps as perhaps the most difficult issue currently facing Israeli society.

A Decade Without a Housing Policy: How the Government Withdrew Support for Housing & the Social Protests of Summer 2011

 Indeed, in the decade preceding the protests, the government withdrew from the housing market despite its involvement since the state’s establishment.  The more limited involvement of the state in the housing market meant that the portion of the market that remained were those who were not in need of state assistance.  The extent of new building did not match the population’s rate of growth, and so the result was a housing shortage and a sharp rise in housing costs.

In the current decade, subsidies that had in the past allowed households to purchase a flat were cut back, and a sharp decline in the number of home owners ensued. The only relevant means that remained for the needy was a rent assistance grant, although it makes an unstable living arrangement.  The government’s reluctance to be involved in the housing market has taken a heavy toll on several levels. It has harmed the planning vision of the National Outline Plan (NOP 35), widened the gap between the geographic center and the periphery, increased prices and inflation, which ultimately resulted in the Bank of Israel’s intervention in the mortgage market, and finally, led to frustration and bitterness amongst wide portions of the population.

Merging Small Municipalities

Israel has scores of small municipalities with populations of under 6,000 residents. Such localities have difficulty supplying a full spectrum of municipal services at a reasonable cost. Frequently, these towns adjoin other towns with similar populations. In these conditions, municipal amalgamation can bring both improved service and lower cost.

The advantages of merging municipalities have long been recognized, but actual progress has been limited. A new study from the Taub Center for Social Policy Studies in Israel by economist Dr. Yaniv Reingewertz of George Washington University, breaks new ground in advancing this important policy goal. The study provides a quantitative estimate of the expected savings, identifies those towns for which the conditions for merger are ripe and promising, and maps out a detailed plan to carry out this transition.

The Taub Center study explains that economies of scale are generally achieved when municipalities reach 7,000 to 10,000 residents. At this scale, the fixed costs (such as salaries for essential officials) are distributed among more residents resulting in lower costs per resident. Figures presented by Dr. Reingewertz show that the outlay per resident in municipalities that were merged in 2003 was lower than in similar municipalities that were not merged (see figure).

E Municipalities Fig 1

THE EXPECTED SAVINGS FROM MUNICIPAL AMALGAMATION

Dr. Reingewertz’s study found that merging small municipalities can be expected to save an average of NIS 5 million a year for each merger. The savings result from more efficient provision of public services and can be expected to reduce dependence on grants from the Ministry of the Interior. Dr. Reingewertz calculates that the program he proposes could bring about savings totaling at least NIS 131 million per year.

About 35 percent of municipalities’ outlays are financed by the central government. This means that savings for local government are also savings for the national budget. In an era of significant budget cuts, the savings from municipal amalgamation could offset some of the planned government cuts in welfare, education, and health budgets.

WHO SHOULD MERGE

Alongside the advantages of amalgamation, there is also a downside.  Reingewertz explains that mergers are liable to negatively impact the fit between the desires of the citizen and the activities of the town. This problem can be especially problematic when the merged towns have significantly different cultural or economic characteristics, since the new merged municipality has to then deal with widely varying types of services.

Furthermore, realization of amalgamation advantages requires administrative changes necessitating careful consideration, such as merging departments and firing workers. Such changes are not easy to carry out and they are liable to be delayed in the short run or even fail to happen in the long run.

To minimize these potential problems, the Taub Center study identifies 25 towns meeting the criteria for optimal success in municipal mergers: they have fewer than 6,000 residents; the towns adjoin each other; and, they have similar cultural and social makeup.

Eng Municipalities Table 1

DOING IT RIGHT

In 2003, Israel undertook a project of town mergers, but three of the twelve mergers were reversed in 2009-2010 due to the opposition of residents and local officials. Dr. Reingewertz states that in order to ensure the success of the amalgamations proposed by the study, it is necessary to carry them out in cooperation with the merging municipalities.  According to Reingewertz: “It is necessary to involve the political and administrative officials and ensure that there is cooperation between the local and central governments. It is desirable to give some adjustment grants to the merged towns in order to provide a solution to one-time costs resulting from the amalgamation, and to alter the structure of the parity grants so that the aid given towns that refuse to merge will be reduced. This step will incentivize them to consider the alternative of merger.”

front-cover-municipalities-127x179

Municipal Amalgamation in Israel: Lessons and Proposals for the Future

According to an estimate based on the results of the municipal amalgamations reform carried out in Israel in 2003 (Reingewertz, 2012), thanks to the economies of scale in providing public services, these unifications are expected to generate savings of approximately NIS 131 million per annum. 

The policy paper also discusses the drawbacks stemming from merging municipalities and proposes ways to minimize them.  It then specifies the preconditions and criteria for amalgamation, e.g., the desirability of unifying small municipalities that are contiguous and that share similar cultural attributes.  In that context, it is important to ensure the participation of the municipalities being merged in the decision making process, and to allow them to choose their partners to the process.

Bumps on the Road Towards Making the Desert Bloom

As a country with an average of just 40 to 50 days of rain a year in its coastal region and only 4 to 30 days of rain in its more arid regions, Israel is no stranger to water scarcity. As the only country in the world with more trees at the end of the last century than at its beginning, and a population that has grown from less than 1 million to almost 8 million people in just 64 years, Israel has achieved an international reputation as a leading innovator in the utilization of scarce water resources. Extended periods of drought together with the rapidly rising price of water in recent years have raised the issue of water management ever higher on the national agenda, leading the Knesset to establish the Bein Water Management Commission in 2008.

The Taub Center recently published a comprehensive review of the water sector in Israel, prepared for the Center by one of the Bein Commission’s three members, Professor Yoav Kislev, a Hebrew University economist. Prof. Kislev finds that the water system in Israel generally performs its required functions – thanks to a relatively high level of technical sophistication, a large accumulated knowledge base, a sound legal infrastructure, and the professionalism of the system’s employees. However, Kislev also identifies deficiencies in water management rooted in the limited ability – and sometimes, limited willingness – of governmental bodies to fully meet the complex demands of water management in Israel.

The primary challenge is that since the establishment of the State, population growth has greatly exceeded the growth in available water. While the quantity of water supplied in Israel grew by about 35 percent between 1960 and 2010, the population grew by over 350 percent. The result is that per capita consumption of water declined sharply, though this decrease was not uniform across sectors. As the first figure shows, household consumption on a per capita basis has not declined and is virtually identical to its level in 1960. On the other hand, agricultural use of water has dropped sharply and is now less than a third of its per capita 1960 level despite a steady multi-decade increase in agricultural production.

Eng Water fig 1

The Taub Center study shows striking differences between fresh water use and agricultural output from the 1950s through 2009. Water output was almost unchanged during these four decades, although a large fraction of the fresh water was replaced with recycled waste water. At the same time, the output of the crops making use of this water grew continually. During this period the output per unit of water consumed grew sevenfold. This increase was made possible due to the investments made in this sector, improvements in production methods and the move to improved crops and varieties.

Eng Water fig 2
While Israel has taken significant steps to reduce water consumption and increase supply, Kislev finds that there continues to be an imbalance between supply and demand, resulting in an over-extraction of water from Israel’s natural water sources, which in turn can result in major problems. First, when reserves are low there is no cushion to cope with unexpected problems. A few seasons of below-average rainfall can cause a water supply crisis if reserves are inadequate. In addition, over-extraction compromises the quality of the water. Finally, over-extraction causes direct damage to water sources – the aquifers, lakes and reservoirs.

The government and the Water Authority have not been passive in the face of these challenges. From the early days of the State through to the early 1960s, most water consumers – including agricultural ones – could utilize nearby water sources, and the cost of transporting water was minimal. At the beginning of this period the cost of provision of water was only about NIS 0.50 per cubic meter in 2011 prices.

As the country grew, nearby sources became insufficient and water began to be piped from areas with relatively more abundant water supplies to the more arid regions. The National Water Carrier, a pipeline completed in 1964, played a significant role in this evolution. It was a costly project that raised the cost of water production to approximately NIS 1.70 per cubic meter in today’s prices. Within a number of decades, though, this source also proved to be insufficient, and Israel entered the third major phase of its water supply process – the production of fresh water in desalinization plants (three are already operating along the Mediterranean coast and two more are under construction). These expensive plants raised the cost of producing a cubic meter of water to about NIS 3.

In addition to these measures, the use of recycled waste water has become institutionalized. Important water management reforms have also been undertaken. These include the establishment of the National Water and Sewage Authority and the transferring of local water distribution to special water corporations in place of direct administration by municipalities and other local authorities.

Nevertheless, over-extraction remains a serious problem, one that may be exacerbated if it turns out that the region is faced with a continually decreasing level of rainfall. In the 1960s, the effects of over-extraction were already evident in the coastal aquifer. Despite repeated warnings, though, steps were not taken to rectify the problem in the long-term. It is estimated that during the 1990s, excess extraction from all natural sources reached 80 million cubic meters per year.

In water policy management, the Taub Center study points out that it is important to preserve resources, prevent over-exploitation or over-extraction from water reservoirs, and ensure proper planning of water reserves for dry years in the form of emergency reserves. Over the years the government has neglected its responsibilities in this area, and officials in charge of executing the policy have not been sufficiently vigilant in protecting water reserves.

Kislev believes that the government’s failure is not due to isolated misjudgments but rather is structural in nature. Those carrying out the government’s tasks bear a heavy work load; they are subject to political pressures and are sometimes biased in their decisions. He concludes that the primary way to mitigate the failures of government is to increase transparency and public involvement in the water sector.

The Water Economy of Israel

Recently, the water sector has undergone major changes, amongst them: the growth of seawater desalination plants, the limiting of the supply of freshwater for agricultural purposes, the establishment of water and sewage corporations under the local authorities, the founding of a Governmental Water and Sewage Authority, and a recognition that we may be facing – what many have called – global climate change. Despite the successes, failures can also be identified in the water economy. The source of the failures is in the limited abilities, sometimes even readiness, of government agencies to completely fulfill the complex challenges that the economy presents. In the future, these tasks will be even more difficult; hence the importance of examining the structure of the water economy and its suitability for the job and especially the strengthening of public participation in its on-going activities.

A Macro Perspective – 2010

Current data indicate respectable growth in terms of GDP and employment, relatively low unemployment, current account surpluses, and reasonable inflation. The long-term problems include relatively low investment, lagging physical infrastructure, and numerous labor market problems, which negatively affect the quality of human capital and labor productivity in Israel.

The chapter concludes with a discussion of the considerable problems that stand in the way of attempts to modify Israel’s fiscal policy in order to resolve these problems.

This appears as a chapter in the Center’s annual publication State of the Nation Report 2010.

The 2010 Social Survey

The past year has seen a trend towards an improvement in the “Social Confidence Index,” that is tempered by population differences. The survey found that in Israeli society, not surprisingly, the individual’s income and educational level impact to varying degrees the differences in feelings with regard to social confidence as well as other societal areas. There are also differences by level of religious observance where the ultra-Orthodox are clearly differentiated from the “secular.”

Overall public opinion is that social gaps are continuing and even widening, although this feeling does not bring widespread support for policies of affirmative action for weak populations. Within Israeli society, three groups stand out, each distinguished by its value system and its approach to central problems on the social economic agenda – Arab Israelis, the ultra-Orthodox, and the immigrants from the former Soviet Union.

This appears as a chapter in the Center’s annual publication State of the Nation Report 2010.

The State Budget in the Water Economy in the Last Decade

In the last decade the lion’s share was allocated to supporting investment in sewage systems and recycling facilities. The budgets allocated to urban corporations and local authorities have also increased substantially. Recent developments indicate that the government will have to continue its budgetary support of the water economy in the coming years and that it can be expected that the regulatory aspects of the budget will grow in complexity.

(In Hebrew only)

Henry Taub: The passing of a gentle giant

Henry served as Henry TaubChair of the Center’s Board from 1994 to 2005 and as Honorary Chair in recent years, providing leadership, counsel, and guidance to the Center and its professional staff.

Together with his brother, Joe, and childhood friend, Fred Lautenberg, Henry Taub was a founder of Automatic Data Procession (ADP) and served as its Chairman from 1949 until 1970. He retired from ADP in the mid-1980s when the company was processing pay checks for one tenth of the US work force. Today, ADP is one of the world’s largest providers of business outsourcing solutions.

In the early 1980s, during Henry Taub’s tenure as President of the American Jewish Joint Distribution Committee, the idea arose to create an independent, professional, social policy research center that would provide the Israeli government and the general public with cutting-edge policy research on the primary social and economic issues facing the country. Taub recognized the need for such an impartial source of evidence-based research, quickly becoming one of the Center’s founding fathers along with a few other JDC leaders.  They realized that in order for such a research center to provide balanced, viable, and critical analyses and policy recommendations, it would have to be completely independent of the Israeli government. The Center for Social Policy Studies in Israel, as it was called at the time, was established in 1982 and has grown to become one of Israel’s premier research institutes. In honor and recognition of Henry Taub’s long-standing support, the Center was renamed in 2003 the Taub Center for Social Policy Studies in Israel.

Henry Taub was a symbol of the modern Jewish-American community leader: quiet and unassuming, but with rare foresight and vision that saw far beyond the more common preferences for tactical perspectives and symptomatic solutions.  In addition to his decisive role in the creation of the Taub Center, Henry Taub’s strategic approach towards creating a better future for Israel was also in evidence during his thirteen years at the helm of the Technion’s Board of Governors – one of the world’s leading universities that has figured prominently in Israel’s becoming the “Start-up Nation.”  His role as one of America’s foremost philanthropists was cemented in the large number of leadership positions that he undertook in some of the Jewish community’s most important organizations, including the chairmanship of the United Israel Appeal.

Along with his wife, he established the Henry and Marilyn Taub Foundation which has provided generous support and resources to many important causes including the Taub Institute for Research on Alzheimer’s Disease and The Aging Brain at Columbia-Presbyterian Hospital as well as the Taub Urban Research Center at New York University.  His philanthropic and public activities extended beyond, though, and he also served as a member of the Board of the Rite-Aid Corporation, Hasbro Inc., Bank Leumi and Trust Company of New York, the Interfaith Hunger Appeal, and the New York Shakespeare Festival.

Henry Taub passed away in New Jersey on March 31, 2011 at the age of 83. He is survived by his wife of 53 years, Marilyn, three children, and ten grandchildren.

We will miss him greatly.  May his memory be a blessing.

In Memorium: Dr. Israel Katz

Dr. Katz was one of the designers of Israel’s welfare state from the early 1960s. His positions over the years formed a tapestry both within the discipline of social work and in the social system itself. At the end of the 1960s, Katz served as the Director-General of the National Insurance Institute. While in this position, he acted as the Chairman of the Prime Minister’s Commission on Children and Youth At-Risk which became known as the Katz Commission. The commission brought about a change in the perception of welfare for at-risk children and youth.

Israel Katz’s association with the JDC began early. From 1973-1977 Katz was the Director of the newly established Brookdale Institute of Gerontology and Adult Human Development (which today is the Myers-JDC-Brookdale Institute). He then returned to government service and served as Minister of Labor and Social Welfare under Menachem Begin between the years 1977-1981. At this point, Dr. Katz renewed his association with JDC. Leaders at JDC had long understood the centrality of social planning and the idea of a research center had long been on the agenda.

In 1982, during Henry Taub’s presidency and Ralph Goldman’s administration, JDC established what would become the Center for Social Policy Studies in Israel (and later the Taub Center for Social Policy Studies in Israel) and asked Israel Katz to be its first Director. JDC quickly understood that unlike other programs, this Center would have to be independent of government involvement in order to provide policy and decision makers with high level research and viable policy alternatives that were apolitical and non-partisan in the social and economic arenas. Israel Katz headed the Center until 1992 when he retired and Yaakov Kop succeeded him.

Israel Katz always sought to raise social issues to the top of the public agenda whether in the government, in the Knesset, in professional and academic circles, in the media, or in other spheres. He continued to give his support to the Center and its activities to the end.

We mourn his loss and extend our sincerest condolences to his family.

A 16.7% Jump in the Taub Index of Social Confidence for 2010

The Taub Index of Social Confidence has tracked the sense of social confidence in Israel for the last decade. The Index, which will be published in its entirety in the forthcoming Taub Center State of the Nation Report, is based on a questionnaire that focuses on changes in standard of living, exposure to violence, basic economic security, and fear of unemployment. The Index score ranges from 0 (the worst) to 100 (the optimal situation). The Taub Index for 2010 climbed to a record level of 65.6 points, more than 9 points higher than last year’s level and higher than any other year that the Index has been examined (see figure). The Taub Index has been in an overall upward trend since 2003, but the global crisis of 2008 and 2009 was accompanied by a decline in the feeling of confidence. As the sense of emergence from the crisis strengthened, a large jump appeared in 2010 that restored the Index to the same long-run path that it has been on since 2003.

Fig 4 Eng

Dividing the population by income level shows clear differences between groups but, on the whole, the trends of the Index remained similar across all groups. On the one hand, the overall pattern of the index displays a distinct hierarchy in the level of social confidence and shows the existence of persistent gaps in the feeling of social confidence (see figure below). On the other hand, the distance between the various trend lines is quite stable, and the improvement since 2003 is common to all groups.

Fig 5A Eng

The most moderate increase occurred among individuals with the highest incomes, although their Index score remains the highest of all and this year reached a record 74.4 points compared to 72.6 in 2009. The Index score of the second highest group, those with incomes somewhat above the average, drew closer to that of the highest incomes, rising to 72 points.  This compares with 61 points the previous year and reflects an increase of 18 percent. These findings suggest that the phenomenon of the “disappearing middle class,” which has drawn much attention in the media, was not expressed last year in public opinion.

The Index score of those with incomes “far below average” rose notably, to 56 points, after several years of stagnation at the level of 47-49 points. This year’s level is the highest recorded for this group, and the gap between it and that of those with the highest incomes declined since 2009, from 25 to 18 points.

Differences in education do not appear to be reflected in the same social confidence gaps as differences in income (see figure). This finding is consistent over time. The Index score for the college-educated in 2010 is the highest recorded so far (67 points) while the score for those with a non-academic post-secondary and secondary education is 65 points.  Individuals with lower levels of education reported a social confidence level of 60 points.

Fig 6A Eng

Despite a substantial rise, the Index for the Arab Israelis stands at 61 points, roughly at the same level as the lowest education group and at the level of the two lowest income groups. The concerns among the Arab Israeli population are especially noticeable in response to survey questions regarding their standard of living: the number of respondents expressing difficulty in meeting basic living needs is especially high among the Arab Israelis where almost half said they experienced such difficulty (46%). Amongst this population, the concern of even greater economic problems was particularly high: 19 percent of Arab Israelis versus 10 percent of Jews expressed a great deal of concern and 22 percent versus 16 percent respectively expressed some concern. What is more, 15 percent of Arab Israelis versus 6 percent of Jews felt that their situation was likely to worsen over the coming year.

The Index score for ultra-Orthodox Jews, or haredim, rose to 68 points, higher than in previous years and also higher than the national average. These findings are particularly interesting in light of the fact that haredim are in general considered to be among the weaker socioeconomic population groups. Nevertheless, in the Taub Center Social Survey haredim do not report that they have difficulty affording basic living needs and do not feel that their situation has worsened over the past years. Their concern of a decline in their economic situation is relatively low and they express a greater optimism than other groups in society that their situation will, in fact, improve.

Since the Social Survey is meant to tap into subjective feelings, it could well be that certain groups in society define basic living needs differently or assign less importance to the variables examined. It is also possible that the haredipopulation, in particular, have other means of income – whether from work or alternate sources – that influence their sense of socioeconomic confidence.

Immigrants from the former Soviet Union (FSU) are characterized by a low social confidence score – 61 points – equal to the level found among Israeli Arabs. This score also represents an increase from previous years although it is considerably lower than the average. Immigrants express feelings that their standard of living is not sufficiently high and is unsatisfactory (the rate of those reporting economic difficulties is relatively high) and they do not feel optimistic about the future.

 

Fewer Vehicles Per Capita; Much Greater Road Congestion

Road transportation is by far the most prevalent means of transportation for both people and goods in the State of Israel. But the capacity of Israel’s roads is failing to keep pace with the increase in their use. A recent Taub Center study by Yoram Ida and Gal Talit, Transportation Mobility and Its Influence on Accessibility in Israel, shows just how far Israel’s highway infrastructure lags behind.

The Ministry of Transportation website reports that “the number of vehicles in Israel has doubled from about one million in 1990 to about two million today, while the increase in population was only about 51 percent. As a result, the level of motorization has risen about 40 percent, to about 300 vehicles to 1000 residents.”  This elevated level is only one-third to half the level found in Europe and the United States – suggesting that the level of motorization per capita will continue to rise.  The Ministry acknowledges “a widening gap” between use and capacity.

Ida and Gal illustrate the full extent of this gap. The figure below shows the cumulative growth since 1990 of kilometers traveled, number of vehicles, and highway area. The number of vehicles has far more than doubled, growing by more than 110 percent by 2006, while the number of kilometers traveled increased even more – by over 130 percent. Surface area of roads, by contrast, increased during this period by only about 60 percent, meaning that the amount of congestion increased considerably.

Fig 7B Eng

Ida and Talit demonstrate further that the increase in road travel is in itself partially a consequence of insufficient infrastructure investment in  public transportation, which ideally should have been absorbing much of the increase in travel that has so far been borne by private vehicles.

A massive increase in Israel’s transportation capacity is necessary merely to catch-up with the increasing road travel of recent years, and even greater investments are necessary if the country is to keep pace with the expected future level of travel on Israel’s roads. In addition, a parallel increase in public transport supply and improvement in service level of the existing public transport system should help mitigate the rapid upward trend in private vehicle use.

Have a Good – and Expensive – Trip

The toll road traversing Israel from north to south was opened in 2002. Since then, traffic on the road has greatly increased, and the road itself has been widened and extended. The mission of Highway 6 was to draw traffic from other central arteries and reduce congestion on them – and to reduce the travel time from the north to the south of Israel.

After the road opened, the Derech Eretz Company which operates the highway claimed that the tolls were low in comparison with toll roads abroad. Yet, in comparisons that Dan Ben-David made in 2003 and again in 2005 against five major toll roads in the United States (in Florida, Ohio, New York, New Jersey, and Pennsylvania), it turned out that the cost of driving on Israel’s Highway 6 was notably more expensive than the U.S. average.

In a study recently published by the Taub Center, “Transportation Mobility and Its Impact on Accessibility in Israel: A Comparative Study,” Yoram Ida and Gal Talit revisit Ben David’s comparison. While the methodology used in the Ida-Talit study differed slightly from Ben-David’s, the authors found that there are still very large differences between the tolls charged in Israel and those in the U.S. The comparison was done both for occasional travelers and for subscribers with discounts (in Israel, the basis for comparison was the most deeply discounted, Passkal, subscription), for a trip the entire length of the highway, as well as for a limited number of segments.

Kvish 6 Eng

The average dollar price of a trip for a subscriber along the entire length of an American toll road was 3.4 cents per kilometer in 2009. As indicated in the figure, the average dollar-equivalent price for driving the entire length of Highway 6 – even including the southern, toll-free sections – was 82% higher than for the American toll roads.

The shorter the trip, the greater the price gap between the countries. The price per kilometer in Israel for three road segments is 117% higher than a comparable trip in the U.S.  For a single road segment, the price paid by Israelis is 251% more than in the U.S. – that is, three and a half times the U.S. price.

A simple comparison of dollar prices, like the one above, does not take into account differences in the standard of living – which affect the ability to pay tolls – between the two countries. A comparison of the price per kilometer as a fraction of GDP per capita normalizes for the standard-of-living differences and enables a more representative price comparison between the two countries.

Considering that the standard of living in Israel is considerably lower than that in the United States, and that the tolls in Israel are higher than in the U.S., the relative burden of driving on Israeli roads is even greater. After adjusting for differences in living standards, the price per kilometer of traveling the entire length of Highway 6 is 3.4 times the price in America.  When the comparison is done for a single segment of the road, Israeli subscribers pay 5.9 times as much as their American counterparts.

The discrepancies between tolls among occasional users – as opposed to subscribers – who drive short distances on toll roads in Israel and the United States are even greater. (For a trip the entire length of the road, the price gap between countries is similar to that for subscribers.) Even without adjusting for standard of living differences, the dollar price of driving on a toll road in Israel is three times the American price, and for an occasional driver over a single road segment it is 5.3 times as much. When differences in living standards are accounted for, Israeli tolls are 5 times as high for three road segments, whereas an occasional driver traversing a single road segment bears a burden 8.5 times higher than his American counterpart.

Since the primary focus here is to highlight the issue of affordability regarding this aspect of Israel’s current transportation infrastructure, these comparisons consider only the relative standards of living in the two countries, and not the relative cost of building roads.  That said, the greater the share of labor costs in the construction and maintenance of roads, then the lower living standards in Israel should reduce the relative costs of construction within the country.

Over the course of several decades, Israel’s investments in inexpensive and rapid transportation infrastructure have lagged behind those of other Western countries. In the absence of rapid and inexpensive alternatives, Israelis are limited to using only those alternatives that are available in the country. The expensive Israeli toll roads increase the cost of transportation and shipping, which reduce the profitability of Israel companies and reduce their ability to compete with foreign companies.  In addition, the added cost is passed along in large measure to the Israeli consumer, who is compelled to allocate more of his/her income for more expensive goods and services.

Despite the high tolls on Highway 6, traffic congestion along the road has increased substantially since it opened – primarily due to the lack of better alternatives – and it is has been widened in the sections passing through the center of the country.  But in the absence of suitable alternatives, the harm to Israeli producers and consumers will continue, as the costs of not building rapid and inexpensive transportation infrastructure alternatives are rolled over to them.

Transportation Mobility and Its Influence on Accessibility in Israel

This study examines the amount of mobility in the transportation in Israel, with an emphasis on the residents of the country’s largest metropolitan area, the Tel-Aviv metropolitan area, in comparison to other metropolitan areas in the Western world. A distinction is made between two main means of transportation, private vehicles and public transport.

It turns out that the mobility of private vehicle users in the Tel-Aviv metropolitan area in 1995 was relatively good compared to other cities, and the mobility of public transportation users was relatively inferior. The developments that have taken place since then in Israel point to a relative worsening in the transportation situation for users of both means of transport. The paper discusses the types of changes as well as the reasons for these changes and serves as a basis for recommendations central to the issue of accessibility to transportation in Israel. The researchers call for a change in the public policy that gives preference to private vehicle users over public transportation users. Ultimately, the current policy is harmful to economic efficiency and increases the inequality in society.

The 2009 Social Survey

The survey’s outcomes reveal a society in which the level of satisfaction from developments in the social areas over the past year is lower than during the previous year. The public is aware of the widening socioeconomic gaps and believes that the government, despite the public’s expectations, is not helping to close the gaps but rather is widening them further.

The public believes that the economic prosperity benefited primarily the established population and less the weak population. In recent years the public’s social confidence declined also due to the rise in the sense of vulnerability to violence.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2009.

Personal Social Services

The expenditure for personal social services provided by the Ministry of Social Affairs and Social Services and many non-governmental entities is lower compared to other components of the welfare state in Israel, representing six percent of the social expenditure.

After a period of stagnation during the mid-2000s (2002-2006), there was a growth in the budget directed to these services in the past three years; at the same time changes took place in the Ministry of Social Affairs and Social Services’ policy, as reflected in expanding the privatization trend beyond services that can be provided in the community. Furthermore, as of late, a reform committee completed its deliberations and recommended substantial changes in the array of personal social services, including legislating a Social Services Law.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2009.

Making the Bedouin Towns Work

This paper considers this urbanization process, the limited success of the policies that were pursued and proposals for a strategic urban development approach that would begin to rectify the situation.

Any plan for the Bedouin must be viewed as an integral part of a larger plan for the Negev as a whole.  A region of this size should be an important contributor to the national economy.  But fragmented into a number of dysfunctional towns and detached rural settlements, it remains a drag on the economy, kept in a state of impoverishment and dependency by a steady inflow of non-productive investments and personal transfers.