Policy Analysis in Israel 9781447308058

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International Library of Policy Analysis Iris Geva-May & Michael Howlett

Policy analysis in

Israel

Edited by Gila Menahem and Amos Zehavi

POLICY ANALYSIS IN ISRAEL

International Library of Policy Analysis Series editors: Iris Geva-May and Michael Howlett, Simon Fraser University, Canada This major new series brings together for the first time a detailed examination of the theory and practice of policy analysis systems at different levels of government and by non-governmental actors in a specific country. It therefore provides a key addition to research and teaching in comparative policy analysis and policy studies more generally.  Each volume includes a history of the country’s policy analysis which offers a broad comparative overview with other countries as well as the country in question. In doing so, the books in the series provide the data and empirical case studies essential for instruction and for further research in the area. They also include expert analysis of different approaches to policy analysis and an assessment of their evolution and operation. Early volumes in the series will cover the following countries: Australia • Brazil • China • France • Germany • India • Israel • Netherlands • New Zealand • Norway • Russia • South Africa • Taiwan • UK • USA and will build into an essential library of key reference works. The series will be of interest to academics and students in public policy, public administration and management, comparative politics and government, public organisations and individual policy areas. It will also interest people working in the countries in question and internationally. In association with the ICPA-Forum and Journal of Comparative Policy Analysis. See more at http://goo.gl/raJUX

POLICY ANALYSIS IN ISRAEL Edited by Gila Menahem and Amos Zehavi

International Library of Policy Analysis, Vol 7

First published in Great Britain in 2016 by

Policy Press North America office: University of Bristol Policy Press 1-9 Old Park Hill c/o The University of Chicago Press Bristol BS2 8BB 1427 East 60th Street UK Chicago, IL 60637, USA +44 (0)117 954 5940 t: +1 773 702 7700 [email protected] f: +1 773 702 9756 www.policypress.co.uk [email protected] www.press.uchicago.edu © Policy Press 2016 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested. ISBN 978 1 44730 804 1 hardcover ISSN 2059-0326 The right of Gila Menahem and Amos Zehavi to be identified as editors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved: no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of Policy Press. The statements and opinions contained within this publication are solely those of the editors and contributors and not of the University of Bristol or Policy Press. The University of Bristol and Policy Press disclaim responsibility for any injury to persons or property resulting from any material published in this publication. Policy Press works to counter discrimination on grounds of gender, race, disability, age and sexuality. Cover design by Qube Design Associates, Bristol Front cover: image kindly supplied by www.istock.com Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY Policy Press uses environmentally responsible print partners

Contents List of figures and tables Notes on the contributors Foreword Lessons from Israel’s experience Yehezkel Dror Introduction Part One: The One Two

Policy analysis in Israel: a late developer’s story Amos Zehavi and Gila Menahem styles and methods of public policy analysis in Israel Policy analysis under intense pressures Ira Sharkansky Policy analysis evolution in Israel: building administrative capabilities Jennifer Oser and Itzhak Galnoor

Part Two: Policy analysis by the executive and the legislature Three Policy analysis in Israel’s central government: latest developments and challenges ahead Gal Alon Four Local government and the challenge of policy analysis Nahum Ben-Elia Five Policy analysis and the legislature Shirley Avrami Six The making of disability policy in Israel: ad hoc advisory expert panels Arie Rimmerman and Michal Soffer Part Three: Policy analysis in specific government units Seven Policy analysis in the treasury: how does the Israeli Ministry of Finance arrive at a policy decision? Momi Dahan Eight Policy analysis at the Bank of Israel Karnit Flug Part Four: Policy analysis from the outside Nine Insiders within? The third sector and policy analysis in Israel Hagai Katz Ten Policy analysis education in graduate programmes in Israel Iris Geva-May and Anat Gofen Index

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1

21 37

55

71 93 109

123

141

155 171

197 v

List of figures and tables Figures 0.1 3.1 3.2 3.3

Number of policy studies, Ministry of the Economy Policy units and councils in the Prime Minister’s Office in 2012 Outputs of policy units in ministries today Number of policy units in ministries 2006–14

4 59 61 61

Tables 2.1 6.1

Public sector organisations in Israel General guidelines for the revised SMW assessment process: expert committee suggestions and MOITAL’s response

39 113

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Notes on the contributors Gal Alon is a former advisor at the Israeli Prime Minister’s Office. Currently, he is the chief executive officer of Insights.US, a start-up company that develops a decision-making tool to enable governments gather policy advice directly from their stakeholders. Shirley Avrami is the head of the Israeli Parliament (Knesset) Research and Information Center and lectures in the Department of Political Science at the Hebrew University of Jerusalem. She is a former professional advisor to ministers of Labor and Welfare, and director of the parliamentary committee of Labor, Social Affairs and Health. Dr Avrami has published many papers in peer-reviewed journals and two books. Nahum Ben-Elia is an independent policy analyst and strategic planner focused on local government policies and local development. He served as director of Evaluation, Social Policy Group, Prime Minister’s Office (Jerusalem). For more than three decades he has provided policy analysis and strategic advice to key public institutions as well as civil society NGOs. As a senior researcher at the Florseheimer Institute for Policy Studies he has produced a wide range set of studies on central–local governance and alternative visions for Israeli local government. He has contributed to professional publications and authored Strategic Changes and Organizational Reorientations in Local Government (1996, Macmillan) and The Fourth Generation: Towards a New Local Government in Israel (2006, in Hebrew). Momi Dahan has been a faculty member in School of Public Policy at the Hebrew University and a senior research fellow at the Israel Democracy Institute since 2002. Previously Professor Dahan was a chief economist in the Bank of Israel (1989–99), a senior advisor in the Ministry of Finance (1999–2001) and an economic advisor in both the IMF and the Inter-American Development Bank (1997–99). He has also served on several public committees and has published four books and various papers in leading scientific journals. Yehezkel Dror is a professor emeritus of political science and the Wolfson Chair of Public Administration at the Hebrew University of Jerusalem. In 2005 he received the Israel Prize for advancing the theory and practice of policy planning. Professor Dror served in the following capacities: president of the Policy Studies Organization; senior staff member of the RAND Corporation; senior policy planning and analysis advisor for the Israeli Minister of Defense; advisor to Israeli Prime Ministers; advisor to the UN, UNDP and OECD; international consultant on policy planning and statecraft; guest professor at different universities and fellow at centres for advanced studies, in the US, Europe and Asia. He is the author of

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15 books published in 12 languages, most recently Avant-Garde Politician: Leaders for a New Epoch (2014, Westphalia Press). Karnit Flug is the governor of the Bank of Israel. In 1984 she joined the IMF as an economist before returning to Israel in 1988 and joining the Research Department of the Bank of Israel, where she worked and published papers on topics including macroeconomics, the labour market and social policies. In 1994– 96, while on leave from the Bank of Israel, Dr Flug worked at the Inter-American Development Bank as a senior research economist. In 1997, on returning to the Bank of Israel, she was appointed deputy director of the Research Department, and in June 2001 was appointed director and a member of the Bank’s senior management – a position she held for 10 years. Itzhak Galnoor is the Herbert Samuel Professor of Political Science (emeritus) at Hebrew University of Jerusalem and a senior fellow at the Van Leer Jerusalem Institute. Iris Geva-May is a professor of public policy at the School of Public Affairs, Baruch College of the City University of New York, and Simon Fraser University, Vancouver, Canada. She is the founding editor-in-chief of the Journal of Comparative Policy Analysis: Research and Practice, which has pioneered the field of comparative public policy since 1997, and founding president of the International Comparative Policy Analysis Forum. Anat Gofen is an assistant professor in the School of Public Policy at Hebrew University of Jerusalem. Her main research interest is outliers in the nexus of policy change and social change, with emphasis on the interrelationship between citizens, government and policy implementation. Current research projects include citizens’ policy non-compliance and its implications, the motivations for policy non-compliance among street-level bureaucrats and the educational breakthrough of first-generation higher-education students. Hagai Katz is a lecturer in the Department of Business Administration at the Ben-Gurion University of the Negev. Since 1996 Dr Katz has researched Israeli philanthropy, third sector and civil society and global civil society, and has published numerous books, reports and articles on these topics. Previously, he directed the Israeli Center for Third Sector Research and chaired the Nonprofit Management MA programme. He is a board member and treasurer of the International Society for Third Sector Research. Gila Menahem is an emerita professor at Tel Aviv University, and held a joint position in the Department of Public Policy and the Department of Sociology and Anthropology. She has written on the processes of policy formulation, policy paradigms and policy networks in the domains of water, higher education and ix

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urban policy. Her current research project deals with collaborative governance and metagovernance. She has co-edited a book titled Public Policy in Israel (2002, Frank Cass) and is the co-editor of three volumes of Tel-Aviv–Yafo Studies: Social Processes and Public Policy (2005, Tel Aviv University). Jennifer Oser is an assistant professor in the Department of Politics and Government at Ben-Gurion University of the Negev. Arie Rimmerman is Richard Crossman Professor of Social Welfare and Planning at School of Social Work, Social Welfare and Health Sciences, University of Haifa. He is the author of two recent books published by Cambridge University Press: Social Inclusion of Persons with Disabilities: National and International Perspectives (2013) and Family Policy and Disabilities (2015). Ira Sharkansky is professor emeritus of political science and public administration at the Hebrew University of Jerusalem. He has written on topics of public policy, religion and politics, policy making in Israel and the United States. Michal Soffer is a senior lecturer at the School of Social Work at University of Haifa, Israel. Her main research interests are stigma toward disability and illness as reflected in policies and social structures and processes. She has co-authored a book on women inmates in Israel and published papers on illness-related stigma, mediated images of illness and disabilities, women inmates, and disability-related policies. Amos Zehavi is a senior lecturer with a joint appointment in the Department of Political Science and the Department of Public Policy at Tel Aviv University. His main areas of interest are comparative social policy, the political implications of privatisation, policy analysis, innovation policy and mechanisms of institutional change. He has recently published in Comparative Politics, Comparative Political Studies, Administration & Society, Research Policy, Regulation & Governance, and Social Policy and Administration.

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FOREWORD

Lessons from Israel’s experience Yehezkel Dror

Thought experiment In 1897 the First Zionist Congress in Basel adopted the programme to ‘establish a home for the Jewish people in Eretz Israel secured under public law’. It took only 51 years for this dream to be realised with the establishment of the State of Israel in 1948 on the basis of a decision by the United Nations Organisation. And it took less than 50 years for Israel to become a thriving ‘revolutionary state’ (Adelman, 2008), despite a continuing deep conflict with parts of the Arab world and some serious domestic problems (Shavit, 2013). Zionism and the State of Israel are an extreme case of deliberate efforts to radically change a trajectory of history, which can serve as a test case of the potential and limits of present mainstream policy analysis to help political leaders and other future-affecting decision makers to influence significantly alternative futures. In this volume many interesting findings on policy analysis in Israel are presented. To add another perspective and to pose a challenge to the global community of policy analysts, in this foreword I claim that Israeli is a success story mainly without the benefit of policy analysis. Israel’s success could be attributed, at least in part, to not relying on ‘normal’ policy analysis in some of its most critical choices, which required leaping to higher states of being rather than optimising prevailing ones. This leads to a double lesson from the experience of Israel (and some other newly created countries, such as Singapore): (1) To significantly assist political leaders in shaping crucial aspects of the future for the better, policy analysis must undergo a quantum jump to what I call ‘grand-policy professionalism’; (2) even given such professionalism, many fundamental policy choices depend largely on the quality of political leadership, culture, social negotiation and historic processes rather than on deliberate pondering – with ‘judgement‘ (Vickers, [1965] 1995), ‘intuition’ (Duggan, 2013; Klein, 2013) and creativity (Joas,1996; Csikszentmihalyi, [1996] 2013) playing a crucial but not well understood part. To set the stage let us engage in a thought experiment: assume that in 1897 the emerging Zionist movement had a top-quality policy analysis unit equipped with all knowledge available in 2014 and asked for its opinion on the chances of establishing in the twentieth century a viable Jewish State in the Promised Land, which at that time was a part of the Ottoman Empire. Surely, the professional xi

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opinion would have been that this was a pipe dream and that the Zionist organisation had better concentrate on improving the situation of Jews in the Diaspora, building on increasing legal acceptance of Jews as equal citizens in enlightened parts of Western Europe, such as Germany. To add a concrete example: on 12 May 1948 the provisional governing body of the Jewish community in Palestine (Minhelet HaAm) convened to vote on declaring independence. The choice was between an American proposal for a truce or a declaration of independence. Put to a vote, six of the ten members present supported the declaration of independence. It was the personal judgement of David Ben Gurion which carried the day against very strong opposition. A good mainstream policy analysis staff would probably have taken into account the quantitative military balance, which looked very bad, and preferred the seemingly more prudent option of accepting a truce, which easily could have prevented the establishment of the State of Israel. These are fateful cases, but comparable limitations of mainstream policy analysis apply to some types of lesser choices. Thus, building the Hadassah Medical Center’s high-tech, luxurious and very expensive Sarah Wetsman Davidson Hospital Tower inpatient facility, which opened in 2012, nearly bankrupted the Hadassah hospital, despite being largely financed by the American Jewish Hadassah organisation. No mainstream policy analysis unit would have approved building it. But the Tower will for many years to come increase the welfare of patients, while the financial problems will be overcome within a couple of years. Entrepreneurial risk-taking thus fits some important projects better than mainstream policy analysis, and has played a large role in making Israel into a striking success in many respects. The emerging proposition is that mainstream policy analysis (as well represented by Dunn, 2011; summed up in Fischer and Miller, 2006; with broader perspectives presented in Moran et al, 2008, and different ones in Dewar, 2002), can be very helpful for limited and relatively incremental choices, but not for historychanging endeavours, such as the Zionist attempt to bring about a total break in the history of the exiled Jewish people and build a uniquely Jewish state in its ancient homeland. This proposition does not imply that mainstream policy analysis could not have contributed much to the quality of life in Israel if used well within chosen domains, such as national transportation planning and some aspects of public health policy. But gaining a good understanding of the limits of contemporary mainstream policy analysis is becoming increasingly necessary as humanity as a whole is rushing into a metamorphosis which poses serious and also fateful dangers together with unprecedented opportunities. Coping successfully with such circumstances requires a novel type of ‘grand-policy professionalism’, together with much improved political leadership (Dror, 2014).

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Personal knowledge based I focus on policy analysis at the highest echelons of Israeli government, where the most critical choices are made. But it is difficult to write such a history, especially in Israel. Much of it is not documented and most of the salient information is classified. Some empirical basis is provided by publications of the State Comptroller and by public versions of reports of various committees of inquiry, such as the Agranat Commission investigating the Day of Atonement War and the Report of the Committee of Investigation of the Second Lebanon War (the Winograd Committee, of which I was a member). Also, an increasing number of books based on a mixture of personal knowledge and internal documents approved for publication is available (for example, Dror, 1995; Dror, 2011; Freilich, 2012). But movement between highlevel positions in government and academia is unusual in Israel, adding to the scarcity of writings providing reliable information on high-level decision making and the role of policy analysis in it. Therefore this foreword takes the form of an essay largely based on many years of my personal involvement in the advancement and application of upgraded versions of policy analysis at the highest levels of Israel’s government. I enjoyed access to relevant material and opportunities to observe the ‘corridors of power’ in action, receiving, after some time, clearance for selective publications based on these observations (for example, Dror, 1995 and some books in Hebrew, which I do not cite).

Select episodes A few instances from the history of policy analysis in Israel and its uses and nonuses will provide some empirical basis for the proposed history and conclusions. German reparations In the 1960s Germany paid large reparations to Israel for the millions of Jews killed by Nazi Germany (the Shoah) and for lost Jewish property. Israel used these payments rapidly, without paying much attention to optimising their utilisation. This was also the case with later large supplementary payments. In a personal conversation, the Minister of Finance of Israel explained to me that, given limited time, span of attention and staff, he had a choice between concentrating on getting more money for Israel or trying to optimise its uses, and he chose the former. All in all, this was a good decision given the conditions at that time, all the more so as there were reasons for expecting payments to be terminated early.

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Setting up a National Policy Institute, training policy and budget analysts, and establishing policy analysis units in main ministries Before 1967, Prime Minister Levi Eshkol publicly approved establishment of a National Policy Institute, operating as a kind of small-scale Israeli RAND Corporation. A government decision approved setting up policy and budget analysis staff units in main ministries. In addition, a residential six-week course on policy analysis methods, with high quality participants and lecturers, including senior RAND Corporation staff, was held in Jerusalem. Then came the Six Day War and all these initiatives were aborted. When I asked top political leaders privately why they lost interest in using policy analysis for improving critical choices, their answer was frank and striking: ‘Look at our tremendous successes in the Six Day War, without benefit of professional policy analysis. So what do we need it for?’ University public policy schools Nevertheless some senior officials in the Ministry of Finance recognised the need to prepare policy analysis professionals for high-level governmental staffs. Citing the examples of Harvard University and the University of California at Berkeley, circa 1968, they offered a main Israeli university a large budget for setting up a professional public policy school. Without much deliberation this offer was rejected with disdain, as ‘not fitting an academic university’. Only years later were a number of public policy programmes and schools set up, as discussed below. Planning division in the General Staff of the Israeli Defense Forces (IDF) It was proposed several times to add to the IDF General Staff a division for strategic planning based in part on modern policy analysis, but nothing was done. Only after the debacle of the Day of Atonement war was a planning department, which soon became a full scale planning division, set up. With time it became a main locus of professional strategic planning. Little is publicly known about its operation and impact, but I can testify that it made significant contributions to Israeli national security. National Security Staff In 1999, after long debates and after experimenting with a small unit in the Prime Minister’s Office, a National Security Council was formally set up to serve as a staff unit for the Prime Minister and the Cabinet. However, it suffered from numerous problems, including resistance by nearly all the defence establishment, lack of access to many relevant documents, inadequate resources, exclusion from some of the most important issues and a location far from the centre of government in Jerusalem. Consequently it exerted only limited influence. xiv

Foreword

After serious failures of the top political echelon in directing the Second Lebanon War and following strong recommendations of the Winograd Committee, in 2008 the Knesset (as the Israeli parliament is called) finally passed the National Security Staff Law, which conferred on the renamed National Security Staff broad functions and much authority. The National Security Staff received relatively large resources and enlarged and diversified its staff. In contrast to the past, it now prepares governmental meetings, participates in many forums, has full access to salient material and has been moved to the main government buildings in Jerusalem. Its head, who also serves as National Security Advisor to the Prime Minister, has a room in the inner sanctum of the Prime Minister’s Private Office. Details of the work of the National Security Staff are not published, but some of its heads were high-quality strategists; its staff includes qualified strategic planners and policy analysis professionals; and attention is dedicated to methodology. Despite continuous disputes about its function and its relations with very powerful defence and less powerful foreign affairs bodies, it exerts significant influence on important issues, including Prime Ministerial decisions and government and its political–security committee deliberations. Following these developments, the Ministry of Defense set up a SecurityExternal Relations Divisions, the Foreign Ministry set up a planning unit, and various other security bodies set up comparable staffs, illustrating the dynamics of defensively establishing ‘counterpart units’ so as to reduce dependence on the central National Security Staff while cooperating with it more or less, depending on circumstances. Together, they add up to an impressive network of professional policy staffs contributing to strategic planning and policy analysis on national security, in the broad sense of that term. Details are not published, but it is clear that these units do make a positive contribution, based in part on policy analysis professionalism. However, some very significant statecraft choices are not subjected to deep policy analysis; grand-policy professionalism is probably underdeveloped; and the staff units are undoubtedly constrained in their work by political–ideological directives. Public policy teaching As mentioned, Israeli academia was late in setting up a public policy programme. After one university did so in 2002, following a period of dithering, most others followed, however. As a result there are a number of such programmes, some taking the form of separate schools. Some are good and others are not impressive, but all share at least one serious weakness, namely scarcity of teachers who combine advanced academic qualifications with personal experience in government. Also, thus far, few teachers have studied at elite public policy schools abroad, though their number is slowly increasing. As a result, the supply of well-trained policy analysts is inadequate, all the more so as very few immigrants are qualified in this domain.

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Think tanks Over the years, a number of think tanks have been established, but only a few of them have a critical mass of full-time professionals engaging in policy-directed study of major issues. As an example, which also brings out some of Israel’s unique features, I will briefly discuss the Jewish People Policy Institute (JPPI). (For due disclosure, I should mention that I served for six years as its founding president.) JPPI (initially JPPPI – Jewish People Policy Planning Institute) was established in March 2002 by an innovative Chairman of the Jewish Agency for Israel, as an independent think tank. ‘The mission of the Institute is to ensure the thriving of the Jewish People and the Jewish civilization by engaging in professional strategic thinking and planning on issues of primary concern to world Jewry.’ (http://jppi. org.il/links_for_header/alias-7/About_JPPI/, accessed November 30, 2015). Having a full-time and part-time staff of about 15 to 20 professionals, with a hard core of permanent ones and a number of temporary ones with qualifications fitting changing work subjects, it prepares policy-directed studies of primary domestic and geo-strategic issues facing the Jewish people and relevant aspects of the State of Israel, including annual assessments presented periodically to the Israeli government and Jewish organisations worldwide. Major domains of work, which also illustrate the inadequacy of mainstream policy analysis for JPPI’s mission, are best exemplified by a book-length study of main theories on the rise and decline of civilisations and states and their application to the Jewish People, trying to identify critical factors shaping its future (Wald, 2013). While some policy analysis methods, such as mapping possible scenarios, are relevant, pondering in terms of rise and decline is far beyond contemporary mainstream policy analysis. Nevertheless, such a broad approach is critical for the design and evaluation of grand policies for the Jewish People. RAND Israel Initiative The relevance to Israeli issues of the best presently available policy analysis is illustrated by the Rand Israel Initiative. Starting in 2009 the RAND Corporation agreed with relevant departments of the Israeli government and some Jewish sponsors to engage in analysis of select Israeli policy issues. Two such studies dealt with the role of natural gas in Israel’s energy future and effective policing. Additional studies are being considered, perhaps including some having a larger scope. But, however important the subjects and well done the studies, available policy analysis approaches have difficulties in trying to cope fully with overriding issues influencing energy policy and police work, such as national security, and with other critical features of policy making in Israel, as discussed below.

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Economic and social policy To round out the picture, the availability of highly qualified economists must be mentioned, including some immigrants but mainly graduates of world-class Israeli university programmes. These economists fulfil important functions in government and engage in high-quality economic analysis, both macro and micro. Thus, the budget office in the Ministry of Finance and the independent Bank of Israel are crucial in assuring a good measure of ‘economic rationality’. Despite various socio-economic councils and similar professional bodies, however, social policy analysis is weak and integrated economic–social policy analysis is very scarce and of doubtful quality. These weaknesses contribute to inadequate coping with some serious problems, such as the labour market (OECD, 2010) and housing. Israel’s economic and social policy problems focus attention on structural reasons associated with the difficulties of doing integrated socio-economic policy analysis. Good theories that integrate social and economic dimensions, on which holistic policy analysis can be based, are lacking, as are comprehensive theories on social issues. Real cooperation between good economic policy analysts and the few available good social policy analysts is hard to achieve. Value issues and disagreements are very pronounced in the social policy domain, but usually hidden in economic analysis. Many social issues are political flashpoints, as, for example, was public housing during the 2015 Israeli Parliamentary elections, pushing aside professional analysis. Debates on the preference to be given to settlements in Judea and Samaria (called by others ‘occupied territories, reflecting different language games distorting public and also some professional discourse) versus cheaper public housing in the centre of the country further inhibit ‘sober’ analysis, illustrating a major barrier to policy analysis. A general, and rigid, constraint on policy analysis is posed by Israel’s limited autonomy as a small country with an economy that depends largely on exogenous factors. For instance, if Israel would like to adopt some of Thomas Piketty’s important inequality-compressing proposals (Piketty, 2014), it could not do so because of global competition for capital, a factor that makes related policy analysis futile.

Overall assessment The chapters of this volume clearly show that policy analysis is increasingly used and more professional policy analysts are available. In suitable domains increasing reliance on mainstream policy analysis is indeed advisable. However, its usefulness is limited to sub-issues of Israel’s overall policy problematic. In particular, as further explained below, mainstream policy analysis cannot cope with critical grand policy issues facing Israel, which largely condition all of the policy agenda.

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Put differently, three conclusion emerge, which may look contradictory but in reality constitute one cluster: (1) more mainstream policy analysis is needed; but (2) much more essential is an as-yet-unavailable advanced version of grandpolicy professionalism capable of making significant contributions to the most critical issues facing Israel which dominate its policy problematic as a whole; however, (3) the maximum help which can potentially be provided by grandpolicy professionalism, while very important and sometimes crucial, is also circumscribed. By their very nature critical grand-policy choices depend largely on value judgements, partly on ‘wild’ creativity, and on outstanding political leadership and domestic socio-historic processes, in addition to many variables outside Israel and beyond its influence.

Comparative comment To provide some comparative perspective, it should be noted that a number of countries – the prime illustration being the United States – have highly developed mainstream policy professional staff units and think tanks, dealing inter alia with major statecraft issues, as well as outstanding public policy university schools and programmes. Also, some individual policy advisers reach on their own the level of grand-policy professionals. But it is not obvious that the United States’ main policies are superior to those of other developed countries lacking its richness of policy analysis. Relevant is the history of McNamara and his ‘whiz kids’ at the Pentagon, all of them outstanding thinkers and pioneers of high-quality policy analysis (with many of whom I had the privilege to work during my two years at the RAND Corporation). In what can be viewed as a professional and in part also personal tragedy resulting from a combination of the inherent limitations of much of mainstream policy analysis and a lack of adequate self-doubt by its most outstanding practitioners, their methods produced dismal errors when applied to the complexities of Vietnam, as admitted and deeply regretted later (McNamara, 1996). Also germane is a survey of mine of the personal staffs of heads of governments in about 40 countries, mainly within an OECD project, resulting in the finding that they included very few policy analysis professionals. The reason given by some of the more knowledgeable senior politicians and their advisors was that although they tried to have such professionals on their staffs, they did not really contribute to handling of vexing issues, rather causing errors; and if they did contribute, it was a result of their intelligence and broad knowledge, not of the use of policy analysis methods.

Barriers Without trying to provide a comprehensive mapping of main characteristics of policy making and its settings in Israel (as in part discussed in Sharkansky, 1997; and xviii

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Korn, 2005), I shall describe some barriers that further explain under-utilisation of mainstream policy analysis in most of the critical governmental choices. These barriers will also pose hard challenges to grand-policy professionalism when available. State in-the-making Establishment of the State of Israel was not the outcome of an independence movement by an existing population, as is usually the case, but a result of much more difficult efforts by Zionism to change the demographic composition of Palestine by Jewish immigration, which with time created a clear majority. This makes the establishment of Israel and its development into an extremely radical ‘intervention in history’. Many of Israel’s deep and persistent problems stem from this unique ‘making’ of Israel. Also very significant is the short timeline of the State of Israel, which is minuscule compared to the 2,000 years of the Jewish people in exile without a state. Far too little time has passed for fundamental features of Israel to crystallise and its standing in the Middle East and in the world as a whole to stabilise. This is demonstrated in the ongoing discourse in some circles in Europe whether ‘Israel should have been established’ and by its existence being regarded as illegitimate by many Arab and Islamic actors. Furthermore, Israel does not have internationally recognised or domestically agreed borders, either in the North or in the East. The meanings of being a ‘Jewish’ state are not clear and are hotly debated. Large and partly unpredictable waves of immigration periodically change its demographic composition. And so on. All these add up to Israel being a ‘state-in-the-making’, uniquely so in intensity and scope among developed democracies, despite ongoing transformations all over the world. The resulting situations, processes and quandaries are very different from those for which policy analysis was developed, posing fateful challenges far beyond the scope and even dreams of mainstream policy analysis. Lack of statehood tradition However successful Israel has been in rapidly building many features of a thriving democratic state, it still lacks traditions of statecraft, machineries of government, political ethics and other aspects of statehood. Jewish traditions as developed over more than 2,000 years are the main cultural basis of Israel, but their proto-political parts are based either on pre-modern tribal kingdoms or exile conditions. Jews in the Diaspora seldom achieved high political or policy positions, so immigration did not compensate for the lack of historic statehood experience. For instance, there is no strong tradition of a proper division of labour between professional civil servants or policy advisors and party politicians, resulting, together with other factors, in excessive intervention of politicians in details of what should be professional decisions. xix

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Also missing are institutional prerequisites for utilising policy analysis, together with lack of a culture of politicians feeling a need for professional bases for major decisions. Security issues are an exception, but again lack of fitting traditions produces a different imbalance, with over-reliance of the civilian political leaders on inputs of the defence establishment. Despite improvement in recent years, the situation is still problematic. Scarcity of demand for better professional policy advice and lack of knowledge on how to utilise it, with a good mix between reliance and doubts, are serious problems in many countries. This finding leads to the conclusion that upgrading of salient qualities of political leaders in tandem with development of grand-policy professionalism is essential worldwide (Dror, 2002; Dror, 2014). Such doubletrack improvements are all the more essential in Israel. Traumatic history The traumatic history of the Jewish people, and especially the Shoah, which is a living memory in Israel, together with the constant cycle of wars and terror attacks alternating with waves of ‘peace hopes’, have profoundly influenced policy thinking in Israel, creating a kind of oscillating dissonance between deep fears and a strong sense of triumph despite all odds. This psycho-cultural feature hinders the ‘clinical detachment combined with concern’ required for good policy analysis, especially when combined with deep value disagreements, as discussed next. Intense value cleavages Israel is by far the most ideological state of all modern democracies. Basic ideas of Zionism are widely accepted as a dominant ideology. But on many cardinal national issues there are intense value cleavages that lead to deep disagreements and furious political clashes. A prime example is the deep disagreements on the status of Jewish religion and its various forms in the State, including the roles of religious commandments and rabbinical leaders in politics and statecraft choices – making Israel in some respects an example of ‘political theology’ in action. Overlapping with religious issues and also including divergent security views are ferocious disagreements on the appropriate borders of Israel and the duty to settle all of the Promised Land, including the West Bank, as against various views on the rights of the Palestinians. There are large domains of broad agreement, such as protecting the national security of Israel at all costs and encouraging Jewish immigration. There are significant issues that lack intense ideological dimensions, such as science and technology research, aspects of water policies and choice of major weapons systems. But on the vast majority of important issues, including education, discourse and choice are dominated by ideologies, or at least largely shaped by them. This national characteristic imposes strict constraints on policy analysis and limits its relevance. xx

Foreword

Hypothetically, value sensitivity mapping could help. But just imagine a policy analysis document presented to the government concluding that if one believes in a God-ordained right to all of the Promised Land then policy X is preferable, while if one thinks that peace is morally more important, then policy Y is preferable! No cabinet desires such analyses, nor do the minds of the vast majority of political leaders: harsh presentation of tragic choices is seldom welcome, as it carries both high psychological and high political costs. Instead, such situations push towards procrastination and ad hoc compromises, for which policy analysis posing clear choices is anathema. Furthermore, given the generally heated ideological climate, many policy analysts themselves adhering strongly to one or another ideology. This unavoidably affects their work, causes some of them to act more like policy advocates than professional analysts, and undermines the credibility of policy analysis as a whole. Demographic transformation In a speech on 7 June 2015, the President of Israel put on the public agenda information familiar to professionals, but suppressed in most political and policy discussion as too disturbing: the demographic composition of Israel is changing radically and inexorably, with the proportion of religious and ultraorthodox Jews and Arab-Muslim citizens increasing and the proportion of secular Jews decreasing. The only possible mitigation of this trend is the low probability, but not impossible, contingency of new waves of Jewish secular immigration. Such a radical demographic change, together with generational transitions, will relatively rapidly reshape most features of Israel. But professionals hardly study the subject seriously, because its implications are not only ‘politically incorrect‘ but also ‘taboo‘ in that they conflict with contemporary images and values. However, this denial of emerging reality leads policies into a black hole. Even if grand-policy analysis can help only in part, it could help break the taboo. This task is beyond present mainstream policy analysis even at its best. Vicious coalition politics Israel’s cabinet-parliamentary political system is slowly evolving towards prime ministerial government, with the Prime Minister having a preponderance of constitutional authority and a growing policy staff. But given the policy realities discussed above together with the absence of a dominant party and the consequent need for heterogeneous coalitions, keeping a coalition government intact requires leaving departmental policies largely to the discretion of individual ministers. These circumstances inhibit holistic policies, lead to short time horizons, result in bad policy compromises and often make dithering on critical but divisive issues politically convenient and sometimes essential, even when involving high costs. Furthermore, political marketing becomes a prime consideration, inter-party as well as intra-party; and rapid turnover of ministers and top civil servants hinders xxi

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long-term policy consistency. All these make policy analysis often irrelevant, with politicking occupying the main stage. These problems are well recognised. In private conversations all former and acting Prime Ministers agree that a quasi-presidential regime would enable Israel to make much better decisions on critical issues. But, quite naturally, most politicians, lobbying groups and other stakeholders resist a regime change which would weaken their bargaining power. Overall statecraft culture As Aristotle recognised, one should pursue exactness only to the extent that the subject matter allows. He dealt with ethics (Aristotle, 1985, book I, chapters 3–4), but this rule fully applies to culture, as recognised by modern writings on political culture (Welch, 2013). Accordingly, generalisations on Israeli statecraft culture must be regarded with much caution, because of ambiguity, complexity and lack of reliable empirical studies. Nevertheless, to understand the constraints on policy analysis at the higher levels of government at least some additional widespread and significant features of Israel’s statecraft culture must be added, as I perceive them based on direct observation. These include: noticeable reliance on the transcendental, also subconsciously, including by many non-religious individuals; much trust in ‘will’, ‘effort’ and ‘doing’ as likely to make possible what cold analysis regards as very unlikely; a strange anti-intellectualism on the part of some very intelligent political leaders; reliance on improvisation; uncritical confidence in intuition; and more (Dror, 2011, 147–53). Some of these features may sometimes be functionally useful and even necessary, given Israel’s conditions. Thus, reliance on improvisation is essential when many developments are unpredictable, and helps to counteract the dangers of rigid contingency planning, which never fits what happens. And some trust in ‘Higher Powers’ may help to maintain morale and counteract traumatisation in hard situations, as long as it does not lead to recklessness. But some of the statecraft culture features, even if useful in the past, are increasingly obsolete and becoming dangerous in light of emerging problems. In any case, they constitute a barrier to policy analysis and also to advancing to grand-policy professionalism, a barrier which needs to be demolished or evaded.

Mission impossible The very nature of the two most important internal and external issues dominating most of policy making adds an overriding limit to the uses of policy analysis, because of incongruities between the core nature of the issues and the maximum potentials of main-stream policy analysis (and, in part, also of grand-policy professionalism). xxii

Foreword

This clearly is the case concerning the nature of Israel as a ‘Jewish and democratic state’. It poses deep problems in philosophy, theology, culture, mass psychology, elite structures, institutional and legal rules and structures, spiritual leadership, relations between Israel and the Jewish Diaspora and more. These problems are mainly a matter for global, Jewish people and Israeli future historic processes – which are uncontrollable – together with temporary incremental compromises. Mainstream policy analysis cannot be of much help with such enigmas; and grand-policy professionalism too probably cannot contribute much more than understanding the limits of policy making on such fundamental spiritual, civilisational, cultural and existential issues. It should be realised, and accepted, that future generations will view such issues quite differently – often in unpredictable and partly unimaginable ways. Israel faces a unique situation in regard to its most important external issue: protracted violent conflict, in part with fanatic actors, including what I called ‘Crazy States’ (Dror, [1972] 1980), with very complex psychological and realpolitical manifestations and implications (Bar-Tal, 2013). ‘Crazy States’ face enemies with readiness, propensity and often a will to kill and be killed in order to advance an extreme ideological goal, in this case the destruction of Israel. Such fanaticism, as faced by Israel (and, increasingly by other countries, though on a smaller scale), is impossible to understand in terms of public choice theory, economic models and similar underpinnings of much of mainstream policy analysis and related paradigms. Little wonder that western intelligence agencies find it hard to comprehend events in the Middle East. Israeli security bodies understand the fanatic dimension of the conflict, but what to do about it is another matter. As was revealed in public, on several of these issues heads of security bodies disagreed with the higher political leadership. And on some critical issues nobody seems to have in mind any promising options, though I personally think such failure is more a consequence of closed thinking than ‘objective impossibility’. Grand- policy professionalism should be able to help a lot with main national security issues. Thus, concerning fanaticism, realistic models may help to explore the potentials and limits of new ways of deterrence. And interactions between various forms of peace processes and Iranian nuclear policy can be better analysed with the help of an upgraded grand-strategy version of grand-policy professionalism.

The ultimate challenge: fuzzy grand-policy gambling A revealing way to capture what has been said in this foreword is a proposed understanding of most of the critical decisions facing Israel (and, to a lesser but growing extend, other countries and humanity as a whole) as ‘fuzzy gambles’, some of them ‘very wild’, and often for very high stakes. ‘Gambles’, because of uncertainty; ‘fuzzy’, because of extremely deep uncertainty; some ‘very wild’ because they are taken in the face of inconceivable contingencies; and for ‘high xxiii

Policy analysis in Israel

stakes’ because Israel is still in-the-making and faced with fateful choices likely to shape its future, either rise or decline, and perhaps its very existence. Mainstream policy analysis is unable to cope with fuzzy grand-policy choices. Bayesian thinking is misleading, expected value calculations are inappropriate, scenarios are unreliable, simulation tends to mislead, psychological studies on ‘irrationality’ in probabilistic experiments are irrelevant, and altogether outlook approaches are unable to cope with quasi-chaotic (though not really so) historic processes. It is enough to study the predictions and recommendations of highly reputed think tanks and intelligence units, and also predictions by highly regarded and well paid pundits (Tetlock, 2005), to have plenty of empirical evidence of the difficulties of thinking in terms of extremely deep uncertainty and its ruinous impact on commonly used outlook and policy analysis approaches. The inescapable conclusion is that mainstream policy analysis is quite impotent when choices require very fuzzy gambling – as they often do in Israel (and worldwide). This is not the place to further elaborate such a counter-conventional thesis. But, to provide some pointers on the changes in policy analysis needed to move towards grand-policy professionalism, let me mention the need to consider critical policy gambles in terms of rise and decline models, however provisional; to put emphasis on ‘antifragility’ (Taleb, 2012), together with improved steep learning curves and crisis handling; to think in terms of alternative futures and critical mass interventions in future-shaping historic processes; to engage in value analysis to help with value judgements; to take holistic views of fields instead of focusing on sub-issues (as recommend by systems theory but seldom practiced on an adequate scale); and, in some respects most important of all, to seek and encourage option invention and creativity as an extra-rational dimension crucial for the quality of choice (for detailed proposals, see Dror, 2014, 243–56).

What is to be done? Looking at the picture as a whole, it seems fair to conclude that Israel’s main historic achievements cannot be attributed to policy analysis. One might even claim, with good reason, that if policy makers had relied heavily on mainstream policy analysis, Israel might have achieved less in a number of important domains, such as rapid absorption of large waves of immigrants and large-scale successes of its high-tech industries. This conclusion, however, applies to the main dimensions of Israel’s rise and decline as a whole. If we shift attention and examine particular sub-choices, it seems that many have been improved with the help of policy analysis (for example, water management) and many more could have been improved with the help of more and better use of policy analysis. But more – or less – policy analysis would probably not have changed the overall trajectory of the history of the State of Israel, which given its nature as a state-in-the-making the future of which is not assured is what really matters.Consequently, the emerging overall proposition is that mainstream policy analysis can make significant contributions xxiv

Foreword

to specific circumscribed choices, but only very limited ones to ‘Great Politics’ choices (to borrow a term from Nietzsche, 1886) that are likely to significantly have an impact on the future of states and humanity as a whole, and in particular on the future of the State of Israel, which despite amazing achievements is still vulnerable. Therefore Israel (and not only Israel) needs all the help it can get to improve its grand-policy fuzzy gambles. Ergo, a higher order type of policy analysis, which, as mentioned, I tentatively call ‘grand-policy professionalism’, is urgently needed, being not only desirable but essential for upgrading the quality of choices which are likely to determine whether Israel’s future will be characterised by more thriving, significant decline or perhaps demise. A major caveat must be added, however: much of the future of Israel, other countries and humanity as a whole, as far as the future depends on human action and inaction, will be shaped by political and spiritual leadership and diffuse sociopolitical processes, such as value transformations, creativity and collective learning, as distinct from deliberate grand policies. Therefore, grand-policy professionalism is an important and often essential aid to critical choices. But it is not a substitute for human individual and collective existential discretion and does not release political leaders and societies as a whole from moral and cognitive responsibility for their judgement. References Adelman, J, 2008, The rise of Israel: A history of a revolutionary state, New York: Routledge Aristotle, 1985, Nicomachean ethics, Indianapolis, IN: Hackett Bar-Tal, D, 2013, Intractable conflicts: Socio-psychological foundations and dynamics, Cambridge, UK: Cambridge University Press Csikszentmihalyi, M, 1996, Creativity: The psychology of discovery and invention, New York: Harper Perennial, 2013 Dewar, JA, 2002, Assumption-based planning: A tool for reducing avoidable surprises, Cambridge, UK: Cambridge University Press Dror, Y, 1972, Crazy states: A counterconventional strategic problem, Milwood, NY: Kraus, 1980 Dror, Y, 1987, Conclusions, in W Plowden (ed) Advising the ruler, pp 185–215, Oxford: Blackwell Dror, Y, 1995, Israeli gambles with history: The Lavi combat airplane and the peace process with the PLO, in HJ Miser (ed) Handbook of systems analysis: Cases, pp 239–68, London: Wiley Dror, Y, 2002, The capacity to govern: A report to the club of Rome, London: Routledge Dror, Y, 2011, Israeli statecraft: National security challenges and responses, New York: Routledge Dror, Y, 2014, Avant-garde politician: Leaders for a new epoch, New York: Westphalia Press, imprint of Policy Studies Organization

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Duggan, W, 2013, Strategic intuition: The creative spark in human achievement, New York: Columbia University Press Dunn, WN, 2011, Public policy analysis, 5th edition, Cambridge, UK: Pearson Fischer, F, Miller, GJ (eds), 2006, Handbook of public policy analysis: Theory, politics, and methods, Boca Raton, FL: CRC Press Freilich, CD, 2012, Zion’s dilemmas: How Israel makes national security policy, Princeton, NJ: Princeton University Press Joas, H, 1996, The creativity of action, Chicago, IL: University of Chicago Press Klein, G, 2013, Seeing what others don’t: The remarkable ways we gain insights, New York: Public Affairs Korn, D (ed), 2005, Public policy in Israel: Perspectives and practices, Lanham, MD: Lexington Books McNamara, RS, 1996, In retrospect: The tragedy and lessons of Vietnam, New York: Vintage Books Moran, M, Rein, M, Goodin, RE, eds, 2008, The Oxford handbook of public policy, New York: Oxford University Press Nietzsche, F, 1886, Jenseits von Gut und Böse, end of section 208, My translation of his term ‘Großen Politik’ OECD, 2010, Labour market and social policy review of Israel, Paris: OECD OECD, 2011, Ministerial advisors: Role, influence and management, Paris: OECD Piketty, T, 2014, Capital in the twenty-first century, Cambridge, MA: Harvard University Press, First published in French in 2013 Senor, D, Singer, S, 2011, Start-up nation: The story of Israel’s economic miracle, New York: Twelve Sharkansky, I, 1997, Policy making in Israel: Routines for simple problems and coping with the complex, Pittsburgh, PA: University of Pittsburgh Press Shavit, A, 2013, My Promised Land: The triumph and tragedy of Israel, New York: Spiegel and Grau Taleb, NN, 2012, Antifragile: Things that gain from disorder, New York: Random House Tetlock, PE, 2005, Expert political judgment: How good is it? How can we know?, Princeton, NJ: Princeton University Press Vickers, G, 1965, The art of judgment: A study of policy making, Thousand Oaks, CA: Sage, 1995 Wald, SS, 2013, Rise and decline of civilizations: Lessons for the Jewish people, a Jewish People Policy Institute Study, Boston, MA: Academic Studies Press Welch, S, 2013, The theory of political culture, Oxford: Oxford University Press

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INTRODUCTION

Policy analysis in Israel: a late developer’s story Amos Zehavi and Gila Menahem

Policy analysis is not conducted in a similar manner across states. Indeed, if this were the case there would have been little reason to publish a series dedicated to distinct national systems. Differences in national policy culture (Geva-May, 2002) and environment imply that policy analysis structure and focus is likely to diverge. Israel’s policy environment could be considered exceptionally challenging, consisting externally of security threats and internally of deep social cleavages. Its policy culture is often characterised as involving a high measure of improvisation and, accordingly, relatively little planning (Dror, Foreword to this volume; Geva-May and Kfir, 2000). For these reasons, it is no surprise that Israel is often considered a laggard in terms of policy analysis development (Dror, 1968; GevaMay and Kfir, 2000). At the same time Dror claims in the volume’s foreword that the State of Israel is an extreme case of a deliberate effort to radically change a trajectory of history. As such, it can serve as a test case of the potentials and limits of present mainstream policy analysis to help political leaders and other future-affecting decision makers significantly to influence alternative futures. As will be discussed below, while we concur with others that Israel’s relatively unstable policy environment complicates policy analysis, we nevertheless believe that policy analysis has much to contribute to Israeli policy making. Comparative work often looks for and stresses similarities (DeLeon and Resnick-Terry, 1998). We eschew, however, a depiction of Israel as moving on a course laid out previously by policy analysis leaders, primarily the United States. Although Israel is indeed a late developer, in terms of policy analysis, this very fact implies that the circumstances under which its development occurs are considerably different to those of policy analysis pioneers. Beyond its highly particular circumstances mentioned above, Israel’s contemporary policy analysis development draws on the experience of other countries and on the backdrop of generally slow economic growth, compared to other Western countries (BenDavid, 2013), that poses a relatively rigid financial constraint on policy resources. These two factors – policy analysis learning and relatively unfavourable economic circumstances – are likely shared by numerous other countries. Hence, despite Israel’s unquestionably unique international circumstances, a study of Israel as a policy analysis late developer could in fact provide important insights that are applicable elsewhere.

1

Policy analysis in Israel

Different lessons could be deduced from explorations of Israeli policy analysis and, as readers of the different chapters in this volume will discover, this volume’s authors are not always in agreement with each other. Although the conclusions of these different contributions are not always shared, and at times could be at odds, a broad interest in, and deep knowledge of, Israeli policy analysis’s evolution is common to all our contributors. To guide the authors, we asked them to address several important distinctions, or questions, in relation to their specific topic. First, policy analysis can take myriad forms. What constitutes policy analysis depends on one’s definition and there is no dearth of such definitions. A recent definition by Mintrom and Williams (2012), which we find serviceable, defines policy analysis in the following manner: ‘work intended to advance knowledge of the causes of public problems, alternative approaches to addressing them, the likely impact of those alternatives, and trade-offs that might emerge when considering appropriate governmental responses to those public problems’. It should be noted that this definition is sufficiently broad to include both what other authors have referred to as ‘positivist’ or ‘technocratic’ policy analysis – the use of technically sophisticated and quantitatively grounded analytical methods – and more open-ended methods of analysis – such as interpretive policy analysis methods (Yanow, 2000).1 Our contributors addressed policy analysis in different institutional settings and their work indicates that not only do different styles of analysis characterise different institutional settings, but also that different analytical styles often co-exist in a single institution. Second, we urged our contributors to take account of the inside–outside distinction in policy analysis with respect to the institutional terrain of policy analysis and policy advice in Israel. Although the lines between government and private actors – whether for- or non-profit have become increasingly blurred, the inside–outside distinction is still significant. In some cases, policy analysis is very much an internal government affair. This does not necessarily imply that dedicated policy analysis units conduct such work. In fact, ‘inside’ policy analysis could be conducted by office holders in an ad hoc fashion and in what appears to be a non-systemic way. Policy analysis from the outside is conducted by a wide array of actors. In recent years, the role of Third Sector organisations in policy analysis has grown. The same could be said for commercial firms that often specialise in performing analysis commissioned by governments. Naturally, moving beyond the question of ‘who does what’ leads to consideration of the implications of the shifting ‘inside–outside’ policy analysis boundaries. First and foremost, how does the expanding role of actors outside government affect policy analyses tendencies and biases? Third, we instructed the contributors to pay specific attention to the way that policy analysis as an advisory function is construed and employed. In this context, we ask: ‘Who initiates policy analysis: policy makers (that is, the demand side) or policy analysis experts (the supply side)?’ (Hird, 2005; Radin, 2000); ‘What type of access do policy analysts have to policy makers?’ (Fleischer, 2009); ‘Is there a broader audience beyond policy makers?’; and ‘How are the tasks performed by 2

Introduction

policy analysts conceptualised (for example, the taxonomy offered by Mayer, van Daalen and Bots (2004) and articulated by Howlett, 2010)?’ Clearly, we harboured no expectations that each and every chapter will address all three aspects in a systematic way. Nevertheless, taken together the different chapters do offer illuminating insights related to these three perspectives – and others – of which some could be profitably applied to policy analysis beyond the specific Israeli context. To complement the diverse perspectives on Israeli policy analysis offered in the different chapters, we (that is, Menahem and Zehavi) conducted a set of 11 semi-structured interviews with managers of policy analysis units: mostly within central government, but also from the Histradrut (Israel’s peak labour organisation). In addition, a detailed survey of research papers published under the auspices of different government ministries was conducted to discern patterns in terms of research volume, authorship, methods and so on. Insights from this research were integrated into the discussion presented in the next section. In the following section, we weave together insights from the different chapters and present our impressions of policy analysis in Israel. The Israeli experience is compared to that of other developed countries. In particular we focus on four themes: the type of policy analysis conducted in Israel; the locus of policy analysis – inside or outside government – and its evolution over time; policy analysis clients and the uses of policy analysis; and how Israel’s policy environment shapes and constrains its policy analysis. This is followed by an overview of the different chapters that make up this volume.

Analysing Israeli policy analysis Israel does not boast a rich policy analysis tradition. For at least the first four decades of its existence, up to the late 1980s, systematic policy analysis was not so much the norm as the exception within government (Dror, 1968; Geva-May and Kfir, 2000). Outside government, as was also typical of other states at the time, policy analysis was sporadic and largely ignored by policy makers. This is not to say, however, that policy analysis was non-existent in the early years (see Sharkansky, Chapter One in this volume). Policy advice, consultations, planning and some forms of evaluation were always present. Israel’s political economy, up until the 1980s, was generally organised along the lines of a neocorporatist regime predicated on the tri-partite cooperation of government, trade unions and industry representatives. Therefore both the Histadrut and the Industrialists’ Association conducted significant policy analysis in fields that were relevant to their constituency – pensions for example (Interview, 28 April 2014, Robbie Nathanson, Former Director of the Histadrut’s Institute for Economic and Social Research: 1989–95). Nevertheless, in terms of institutionalisation, professionalisation and scope, policy analysis was limited. The recommendation of the Kubersky Committee – a professional committee appointed by the government to study and recommend change in the public services (1986–89) – to institutionalise and upgrade government ministries’ policy 3

Policy analysis in Israel

analysis capacities indicated a change of course in the development of Israeli policy analysis. While it would be naïve to imagine that public committees necessarily launch change, the Kubersky Committee at the very least clearly articulated a desire for change and most probably sparked a process that gradually brought about a change in governmental policy analysis capacities over the following two decades. What change occurred and how does it compare with the experience of other countries? One vision of how policy analysis should be conducted, in terms of its form, is based on positivist thinking and emphasises rigorous quantitative methods that are well grounded in microeconomic theory. Such ‘positivist’, ‘technocratic’ or ‘rational’ policy analysis characteristically dominated the early years of the policy analysis profession in modern government (Radin, 2000; Dobuzinkis et al, 2007; Mintrom and Williams, 2012). Undoubtedly, the aspiration of both the Kubersky Committee and other commentators was that Israeli government would enhance its capacity to conduct ‘positivst’ policy analysis. In recent years, government emphasis on the use of ‘positivist’ techniques, most notably cost– benefit analysis, has been growing although it would be a mistake to think that it has become the norm for Israeli policy analysis practice. Indeed, in our analysis of government, or government sponsored, research under the auspices of either the Ministry of Welfare and Social Services or the Ministry of Economy, we found that even in the 2000s very few cost–benefit studies were conducted. However, at least in the Ministry of Economy, there is a marked increase in the volume of systematic policy evaluation studies in general (see Figure 0.1) and in the number of positivist studies more specifically.

Figure 0.1 Number of policy studies, Ministry of the Economy 35 30 25 20 15 10 5 0

Source: Ministry of Economy publications

4

Introduction

Interestingly, discussions in the literature of policy analysis development elsewhere, especially in the United States, stressed that the positivist approach to policy analysis, while far from disappearing has become the object of intense criticism and has been complemented, in recent decades, by broader visions of policy analysis. Indeed, Radin in her survey of policy analysis development in the United States distinguished between an early period dominated by the highly technical positivist approach and a later period in which policy analysis evolved into a far more methodologically pluralistic enterprise (Radin, 2000). The different chapters in this book indicate that Israel is following a different trajectory from the American ‘positivist to pluralistic’ one. In terms of policy styles, as mentioned above, there is a gradual expansion of the use of formal quantitative approaches. While in some cases it is state agencies that make use of these methods (see Flug, Chapter Eight in this volume, for the Bank of Israel example), in others, it is ‘outside’ analysts that contract with government, or are independent of government, that perform ‘positivist’ analysis. Yet it would be a mistake to conclude that Israel is following the American trajectory, albeit fifty-odd years later. Israeli policy analysis increasingly relies on a range of non-technical forms of analysis. Different government ministries now analyse policy based on ‘soft’ research techniques (for example, interviews with service clients) and plan policy in collaboration with a host of different actors, whether within or outside government. It therefore appears that policy analysis in Israel is skipping a stage by concurrently developing both positivist and post-positivist methods of policy analysis (for example, reliance on focus groups). The fact that Israel is following a different trajectory, in terms of policy style evolution, to policy analysis pioneers should be of no surprise. First, although a comparativist literature on policy analysis is only now taking shape, comparative literature in political economy has long ago demonstrated that ‘late developers’ – albeit from an economic perspective – do not, and should not, follow in the early developer’s path (Gerschenkron, 1962; Gourevitch, 1978). Circumstances for late developers are not identical to that of their predecessors. Obviously, this is true of Israel. Moreover, policy analysis learning has become increasingly common as one manifestation of globalisation. The implication of this is that policy analysis in Israel is developing on the backdrop, and informed by, current state-of-theart practices in other countries: the United States, Britain and others (see Alon (Chapter Three) for examples of how Israeli institutional policy analysis related reform is inspired by American and British structures). Israel, as a late policy analysis developer, is playing ‘catch up’ and therefore its trajectory is significantly different from the early developers. Israel obviously differs from the United States, Canada, Britain and other early developers in this respect, but it is likely that its experience as a late developer is shared by numerous other countries that have entered the policy analysis world relatively late. Moreover, policy analysis learning goes beyond institutional emulation and applies to policy content as well. As explained to us by the Chief Scientist of the Ministry of Transportation, recognising the Ministry’s limited ability to conduct (or contract for) original 5

Policy analysis in Israel

research, the Ministry relies heavily on the analytical work, and resulting directives, commissioned by the European Union (Interview, 6 April 2014, Shai Sofer, Chief Scientist Ministry of Transportation). Thus, for Israel, not only is policy analysis from outside government important, it appears that policy analysis from abroad is significant as well and complements the limited capacities of the late-developer. Finally, Israeli policy analysis also draws on established international expertise by recruiting international experts to serve on ad hoc advisory committees (see Rimmerman and Soffer, Chapter Six in this volume). In the post-positivist stage of policy analysis, an increasing number of actor types engage in policy analysis. It is difficult to disentangle the supply and demand push and pull driving this movement: both civil society and the corporate world are cognizant of the influence they can exert through policy analysis, and government across the globe – far more than before the 1980s – is actively engaging the private sector on all levels of government work. One important outcome is impressive growth in policy analysis outside of government. Notably, the third sector’s presence in the policy analysis world is rising (see Katz, Chapter Nine in this volume). Non-government organisations are well aware that making a compelling case for adopting a certain policy depends to a great extent on grounding it in policy analysis. Indeed, as Mintrom and Williams point out, one reason for the proliferation of policy analysis outside government is that interest groups venture into policy analysis to counter extant policy analysis that undermines their demands (Mintrom and Williams, 2012). Nevertheless, although as a whole third sector policy analysis is expanding, it should be noted that traditional neocorporatist strongholds have lost ground. In particular, the Histadrut’s Institute for Economic and Social Research, once one of the main policy analysis units in Israel, was closed down in the 2000s. Evidently, the transformation of Israel from a neo-corporatist to a liberal market economy influenced the policy analysis terrain as well. The intensification of ‘outsider’ engagement in policy analysis could be viewed from different perspectives. Proponents of the process present it as a welcome extension of the democratisation of policy analysis: policy analysis is gradually becoming a more inclusive practice that is constantly expanding beyond the traditional core of government ministry practitioners extended perhaps also to policy analysis units serving unions and employers in neo-corporatist regimes (as was the case in Israel). Nevertheless, the spectre of the ‘hollowing out of the state’, and the concomitant loss of state capacities, casts a shadow over this process (Rhodes, 1994; Rhodes, 1996). Indeed, as Oser and Galnoor argue in this volume (Chapter Two), the outsourcing of fundamental policy analysis functions, such as devising socio-economic strategies, could erode state capacities to guide policy in a coherent and impartial way. The danger that Israel’s reliance on external consultancy firms would prove to be over-reliance: policy analysis would become fragmented and biased, and the decline of internal government analysis capacities would lead to an inability to critically engage and intelligently

6

Introduction

internalise external analysis. It may very well be that Israel – under the spell of the neoliberal zeitgeist – is moving in this direction. Nevertheless, other chapters in this volume focus on policy analysis within government and their descriptions of analysis evolution in government could perhaps attenuate fears of government analysis capacity breakdown. Avrami, for example, in her chapter about the Israel’s Parliament Research and Information Centre (RIC) (Chapter Five), notes that the RIC was established in response to the growth in scope of ‘outsider’ policy analysis that increasingly influenced parliamentary work. The establishment of the RIC in 2000 did not occur because legislators lacked policy analysis sources. Rather because abundant ‘outsider’ policy analysis was inherently biased and of varying quality. Part of what the RIC’s function, as an ‘insider’ policy analysis body is to integrate the growing streams of external analysis and help legislator’s make sense of it. In recent years, we are indeed witnessing a growth of ‘outsider’ policy analysis and government is not oblivious to this development: indeed, its use of external sources undoubtedly motivates further growth. However, policy analysis capacities within government have developed as well. As is true of the RIC, the National Economic Council is also a recent addition (established 2006) to the government’s policy analysis infrastructure. While Oser and Galnoor focus on how it was bypassed in favour of an international consulting firm, it should be noted that less than a decade ago there was no need to bypass it because it did not exist at all. In an interview, the director general of the Prime Minister’s Office, during the period in which the National Economic Council was established, stressed that not only was the Council established, but that the government worked hard to strengthen and routinise the work of policy units within the different ministries (Interview, 23 July 2014, Raanan Dinur, former Director General of PMO 2006–09). Contrary to the situation merely a decade ago, all government ministries annually publish work plans and routinely measure performance. Then again, the practice of government contracting out for analysis is expanding even faster. Ben-Elia (Chapter Four in this volume) indicates some progress at the local level with the establishment of strategic planning units in local government since the 1980s. Still, progress has been uneven with numerous instances of units closing down. In our interviews with top level policy analysis practitioners within government, there was broad agreement that contracting out for policy analysis was becoming more prevalent. Developments within government were more ambiguous. Alon in his chapter (Chapter Three) states that the rate of establishing new policy units in different governmental units increased considerably between 2006 and 2013 including increase in their staff. However, one interviewee used the term ‘stagnation’ to describe the current state of affairs. Although he acknowledged the rise of the RIC and the National Economic Council as policy analysis practitioners, he argued that this constitutes ‘competition’ and might have in fact weakened the status of ministries’ internal units (Interview, 28 April 2014, Benny Fefferman, Head of the Research and Economics Administration, Ministry of Economy). 7

Policy analysis in Israel

In sum, ‘outsider’ analysis could overstep its democratically legitimate bounds and this might evolve into a problematic phenomenon in the future. For now, however, it appears that ‘insider’ analysis in Israel is growing – albeit at a slower pace – with ‘outsider’ policy analysis. As the RIC case suggests, this simultaneous growth is no accident. ‘Outsider’ analysis is not a perfect substitute for ‘insider’ analysis: it is fragmented, often biased (in different directions) and as an exclusive analytical source could undermine the legitimacy of policy predicated on it. Government therefore is in need of ‘insider’ analysis to complement and balance external sources. It could be the case that the fact that ‘insider’ growth is mostly expressed in the establishment of new institutions within government and much less in expansion of extant units reflects distrust in existing units. Regardless of the reason for this disjointed growth, the outcome is that the policy analysis infrastructure within government is more complex than it was two decades ago. The growing impact of outsider policy analysis and government’s increased use of diverse sources of policy analysis could be viewed as one important facet of a neoliberal turn in governance. As Mintrom and Williams (2012) note, it is not the only one. No less important is the fact that the balance within government has shifted due to the ideological re-orientation of different societies in the direction of greater reliance on markets. Ministries of Finance have grown in prominence, across numerous countries, as the government body most closely associated with market-centred economics. Israel could be considered as a prime example of this change. Since the economic stabilisation plan of 1985, the Israeli Ministry of Finance (MoF) emerged as the most powerful policy actor overshadowing all other ministries, with the possible exception of the Ministry of Defence (BenBassat and Dahan, 2006; Cohen, 2013). One might expect that given the MoF’s dominance in policy planning and policy making that it would also play a leading role in policy analysis. Dahan’s chapter on policy analysis in the MoF (Chapter Seven) uncovers a troubling state of affairs in the Ministry’s Budget Department: the ministry’s most powerful department. The Budget Department instigates policy change that is likely to have dramatic effects, but especially in instances in which analysis is conducted ‘in-house’, the policy evaluation procedures fail to adhere to any standard protocol of policy analysis. Given that the MoF is a proponent of positivist policy work, often preaching the virtues of performance measurement and associated reward, it is surprising to find that Budget Department planning is not guided by such principles. Thus a double paradox emerges: the ultra-positivist ministry is deficient precisely in this respect in its own work and high policy-making capacity is coupled with low evaluation abilities. The pivotal role played by the Budget Department, and the MoF in general, in policy formulation suggests a high degree of interaction with policy analysts from other departments within government and also, perhaps, with a range of analysts from without. Dahan’s description of policy analysis work through MoF appointed committees indicates that cooperation with policy analysts outside the ministry indeed occurs although it is infrequent. One reason for this 8

Introduction

relatively insular activity could be the ministry’s desire to retain a high degree of autonomy vis-à-vis interested parties, which could divert policy to what the Ministry considers as socially sub-optimal directions. However, the Israeli Budget Department is not overly attentive to other government analysis units, not just ‘outsiders’. For instance, the director of the Research, Planning and Training Division in the Ministry of Welfare and Social Services stated that the MoF pays only little attention to his division’s research (Interview, 29 April 2014, Yekoutiel Sabah, Director, Research, Planning and Training Division Ministry of Social Affairs and Services). As argued by March and Olsen (1989), a central function of policy analysis – even if undesirable in principle – is to legitimate established policy preferences and not truly generate an open-minded review of policy. As noted by others, the MoF’s policy preferences are closely guided by a socio-economic neoliberal worldview (Maman and Rosenhek, 2011). Policy analysis that would require that policy depart from a strict neoliberal script is likely to be unwelcome. Moreover, the dominance of the MoF is such that even ‘in-house’ policy analysis to legitimate extant MoF policy preferences may not be necessary. The MoF’s impregnable position might very well make quality policy analysis more of a luxury than a requisite. It is an open question how MoF dominance affects policy analysis elsewhere in government. One clear possibility is that not only does the MoF enervate policy work in other ministries, but it makes policy analysis a futile exercise: as Alon in his chapter dedicated to policy analysis in central government (Chapter Three) wonders: why practice analysis that would not be heeded by decisionmakers? If this is indeed the case, then one previously unnoted and unintended consequence of MoF dominance in Israeli policy making is the stultification of policy analysis evolution within government. Furthermore, as Ben-Elia argues in his chapter in this volume (Chapter Four), such disregard could also result in considerable implementation problems downstream due to ignorance of system limitations and stakeholder preferences. However, as Dahan notes, and Oser and Galnoor recommend, the MoF is gradually surrendering some ground to other ministries in Israel’s highly centralised policy formulation process. This process, we believe, would accelerate the policy analysis development trend in other government departments. MoF dominance, as suggested above, invokes the question of the impact of policy analysis. Obviously, policy analysis is intended to inform policy design. It is an open question, however, what causal chains – if at all – connect analysis to policy. It is worth noting that in Israel academics are involved not only in training the next generation of policy analysts (see Geva-May and Gofen, Chapter Ten in this volume), but are also central practitioners of policy analysis. Indeed, quite often academic policy evaluation studies are sponsored, contracted for, and funded by government. In two of the largest ministries – Education and Health – extending competitive grants to academic policy analysts is the most common form of administering policy analysis. Nevertheless, funding and influence should not be confused. Both the current and the former chief scientists in the 9

Policy analysis in Israel

Department of Education openly questioned whether department policy was informed by evaluation studies. In fact, the former Chief Scientist of the Ministry of Education stated that policy analysis had very little impact on policy and during his two years on the job he got to meet the minister only once and even then there was no serious discussion of policy (Interview, 11 May 2014, Zecharia Madar, former Chief Scientist Ministry of Education, 2011–13). This disconnect between policy and analysis was also reported in other contexts by our contributors. Rimmerman and Soffer, for instance, discuss the work of two ad hoc advisory expert panels, formed by government ministries, which while very different in many ways were quite similar in that their recommendations were mostly rejected and not at all implemented. Katz, in his chapter on the third sector (Chapter Nine), argues that the increase in policy analysis volume does not imply a corresponding increase in influence. This sentiment is shared by Ben-Elia who asserts that: ‘The conceptual and ideological frame, within which central government formulates and sustains its local government related policies, seems to be impervious to external influence, and dialogue with local think tanks is practically non-existent.’ This bleak assessment of policy analysis influence, however, is not shared by all. First, at least in some places and under certain circumstances, policy analysis can directly influence policy. For instance, Flug provides an interesting example of how government was responsive to a study conducted by the Bank of Israel dedicated to the Earned Income Tax Credit. Moreover, it is interesting to note that although ‘positivist’ policy analysis in Israel is certainly underdeveloped compared to the United States or Canada, Israel does boast a few institutions that have engaged in systematic policy analysis for decades. Chief among these is the Bank of Israel. Flug, in her chapter, describes policy analysis work in the institute that she now heads. Since the mid-1950s the Bank of Israel acts as an economic advisor to government and, accordingly, conducts policy analysis based on formal quantitative methods. Its policy analysis work is respected in government circles and influences policy. Second, policy makers are not the only consumers of policy analysis. Work done by policy analysts, whether conducted within or outside government, is increasingly accessible to the general public. At the very least, policy analysis could inform an interested public and shape their views on a range of policy issues. In fact, one of our interviewees, who manages a large policy analysis unit within government, explained that he actively disseminates the main findings and recommendations of studies conducted under the auspices of his unit to the media and advocacy groups. The primary purpose of this exercise is to create external pressure on government to respond to these studies – something that otherwise might not have happened (Interview, 15 May 2014, anonymous). Finally, Carole Weiss’s groundbreaking work is relevant here. Weiss focused on how academic policy studies inform policy and found that their influence was mostly indirect: they gradually shift the terms of public discourse and understanding of specific policy issues (Weiss, 1982). This insight could offer some consolation for policy 10

Introduction

analysts – whether academics, civil servants, or think tank employees: even if in the short run it appears that their efforts were for naught, in the long run their work could create a real change in policy discourse and, ultimately, policy reality.2 A different factor that greatly influences the form and development of policy analysis is the political and social environment in which policy analysis takes place (Weimer, 2012). Sharkansky’s chapter in this volume (Chapter One) also addresses the specific circumstances that shape policy analysis in Israel. Clearly, Israel’s geopolitical situation is exceptional among developed nations as is true of the huge immigration waves it experienced in the state’s early years and then again in the 1990s (primarily from the former Soviet Union). The upshot of external threats, security and immigration shocks is that Israel faces considerable resource demands that go beyond that of the average OECD country. Perhaps what is even more important is that major security and immigration events are almost impossible to predict – and therefore plan for – in advance. Uncertainty, which is of course common to all policy systems, appears to be even more extreme in Israel. It is of little surprise therefore, argues Sharkansky, that Israeli policy analysis follows a ‘muddling through’ pattern in which policy makers must learn to cope with a constantly changing environment instead of relying on orderly positivist policy analysis. Textbook policy analysis is of little value where the present is a poor predictor of the future. Pointing to similar conditions under which policy is made in Israel, Dror offers a somewhat different lesson. In the volume’s foreword, Dror singles out a number of ‘stressors’ (for example, intense value cleavages, extremely deep uncertainty and protracted war) that render much of mainstream policy analysis inappropriate for Israeli policy. Thus he argues that in order to assist decision makers under such extreme conditions to shape crucial aspects of the future for the better, policy analysis must undergo a quantum leap to what he calls ‘the study, theory and practice of grand-policy design’. It may be also claimed, however, that some of the factors that allegedly limit the applicability of policy work in Israel might be less restrictive than they initially appear. First, while Israel’s security budget is indeed burdensome, it limits Israel’s policy capacities, but not so much its policy analysis capacities. Indeed, as argued by Mintrom and Williams (2012) austerity could in fact prompt a growth in the scope of policy analysis as governments seek new ways of ‘doing more with less’. Second, systematic policy analysis under conditions of high levels of instability and uncertainty is undoubtedly problematic. Nevertheless, as Dahan points out in his chapter (Chapter Seven), Israeli policy instability might be overstated. In fact, Israeli economic policy has been remarkably stable since the mid-1980s. Policy stability occurred on the backdrop of a huge immigration wave, two waves of the Palestinian initifadah (uprising) and a small-scale war in Lebanon. Indeed, Israel weathered the 2008 economic crisis relatively well, a fact that some commentators attributed to sound and stable economic policy (Bank of Israel, 2008). Perhaps external circumstances push Israel somewhat towards more of a

11

Policy analysis in Israel

‘coping’ type of policy analysis. However, the record demonstrates that Israel’s particular circumstances far from determine such an outcome. Where we believe that Israel’s particular social and geopolitic characteristics play a central role in shaping policy analysis is in influencing the goals of policy and the actors that participate in policy analysis. One social-cultural dimension that is highly salient in Israel, perhaps more so than in any other developed nation, is religion (Zehavi, 2012). The majority of the Israeli public is Jewish and a growing share of the Jewish population adheres to a strict ultra-orthodox school of Judaism. Policy analysts often must take account of this fact when evaluating and planning policy. For example, in most countries, determination of the end of life is a health policy issue informed by the analysis of medical professionals. In Israel, a 2008 law pertaining to the determination of the end of life was formulated following extensive consultations and negotiations among medical experts on the one hand and religious authorities on the other. The reason for the inclusion of rabbis in the collaborative policy analysis process was that their views were critical for arriving at a procedure for determining death congruent with common interpretations of Jewish law. Absent rabbinical consent it was feared that religious people would refrain from accepting organ donations from the dead (Kellner, 2012). Israeli policy analysis also takes place on the backdrop of the national/religious divide in Israel between Jews and Arabs. Arabs make up about a fifth of the Israeli population and are very much a marginalised minority in socio-economic terms. During the first few decades of Israel’s existence, Arabs were nearly invisible either as objects or subjects of policy analysis. In recent years, Arab presence in policy analysis has been growing. One reason is the role of ‘outsider’ advocacy policy analysis. An impressive growth in Arab Israeli civil society organisations focused on Israeli state policy generates Arab-focused policy analysis (Haklai, 2004; Jamal, 2011). Thus, for instance, Sikkui, an Arab–Jewish nonprofit organisation dedicated to the promotion of Arab–Jewish equality, created and published a Jewish–Arab equality index that targets particularly government allocations. The organisation’s activity presents to both government and the public government’s unequal treatment of its Arab citizens (see www.sikkuy.org.il/publication_cat/ equality-index/?lang=en). This growth in ‘outsider’ policy analysis is one factor that influences government to become more inclusive in its own policy analysis practices. Indeed, these days numerous policy analysis reports centre on government policy towards the Arab public (see, for example, Prime Minister’s Office, 2012; Liss-Ginsburg 2013a; Liss-Ginsburg, 2013b). Moreover, as part of the policy analysis process as it pertains to Arab Israelis, government is increasingly including representatives of the Arab public in policy circles (Interview, June 10, 2013, Aiman Saif, Director of the Authority for the Economics Development of the Minorities Sector). What is interesting about this is that it constitutes an example of how ‘outsider’ policy analysis not only does not undermine ‘insider’ analysis, but how it, in fact, motivates it.

12

Introduction

The chapters In the foreword, Dror, based on the analysis of Israel’s circumstances and experience, calls for the development of ‘grand-policy professionalism’ to deal with the challenges facing humanity and the critical decisions needed. Contemporary mainstream policy analysis, he contends, has limitations in coping with fuzzy grand-policy choices, due to difficulties of thinking in terms of extremely deep uncertainty that characterises such situations. The foreword briefly sketches some of the features of ‘grand policy professionalism’ and how they relate to Israeli public policy. In Part One, which is dedicated to the styles and methods of policy analysis, we include two chapters. Ira Sharkansky writes about the constraints faced by policy analysts in Israel with an emphasis on the gap between limited capacity and unlimited policy aspirations. Sharkansky argues that inspired by the Jewish prophetic tradition, Israeli policy analysis tends to be highly critical of extant policy and institutions. An interesting example of this is the way in which the prophetic tradition is manifested in the work of Israel’s State Comptrollers. The Comptroller has a very broad mandate based on a law that makes mention of ‘moral integrity’. Widespread expectations that policy outcomes would mirror that of leading developed countries, however, fails to take into account Israel’s particular circumstances: a below OECD average economy, high defence expenditures and the demands made by powerful political constituencies such as the Ultra-Orthodox and the settlers in the West Bank. Given these challenging circumstances, Sharkansky argues, ‘coping’ is a sensible strategy even if it fails to meet the high expectations of Israeli policy analysts. Jennifer Oser and Itzhak Galnoor focus on the evolution of state capacity with a special emphasis on how privatisation trends in recent years affect policy analysis. Oser and Galnoor stress that despite Israel’s state-centred political-economic structure in the state’s early decades, its policy analysis capacity was underdeveloped. While in the early years, policy analysis capacity was constrained by political interference, since the mid-1980s, privatisation contributes significantly to its stultified growth. An illuminating example of this is how government decided in 2011 to outsource the formulation of its national socio-economic strategic plan to an international consulting firm. This naturally invokes questions about who determines the public agenda and what tasks should be considered as inherently public. In Part Two, Gal Alon discusses efforts to enhance policy capacity in the central government. Since the 1980s, several major attempts were made to dramatically reform policy-making, and with it policy analysis, in central government. However, these reforms were largely unsuccessful. Nevertheless, since the mid2000s some progress has been achieved in terms of designing work procedures for government ministries that would enhance their policy analysis capacity. Progress, however, is slow and Alon argues that to accomplish significant change in central

13

Policy analysis in Israel

government policy analysis, the government must encourage ministries to make better and more frequent use of professional policy analysis. Nahum Ben-Elia surveys how policy analysis is conducted within, and has an impact on, the local government level in Israel. The relationship of central to local government in Israel tends to be highly hierarchal. Ben-Elia argues that in Israel this relationship could be characterised as purely ‘top-down’ in which policy analysis at the central government level – especially at the MoF – pays scant attention to inputs from local government, public commissions, or think tanks. This inattentiveness, however, comes at a price: the likelihood of successful implementation is low without local government input and cooperation. The topdown nature of inter-government relations does not mean that local governments have no independent policy analysis capacity. Since the 1980s, Ben-Elia reports, Strategic Policy Units were established in several municipalities with the aim of creating a holistic perspective of the municipality’s work. However, these units generally receive little support and some have closed down. Shirley Avrami, who heads the Knesset’s (Israeli parliament) Research and Information Centre (RIC), discusses the development and operation of this new instrument that offers legislators an alternative to traditional government policy analysis. Most of the research reports written by RIC personnel respond to specific requests made by Knesset members. This implies an expectation that reports will be delivered in a relatively short time span (for example, ahead of a specific committee meeting in which the topic will be discussed), something that precludes the use of sophisticated policy analysis methods. Members of Knesset appear to generally value the policy analysis provided to them by the RIC, not because they lack alternative sources of information and analysis, but because they view RIC reports as professional and impartial. The RIC has another advantage in comparison to external policy analysis bodies: due to its legal standing, its researchers are able to access government data and information that is not publicly available. This part concludes with a chapter written by Arie Rimmerman and Michal Soffer dedicated to the role of ad hoc advisory expert panels in Israeli policy analysis. The authors point out that these government appointed panels constitute a relatively inexpensive way to evaluate policy in a specific field and produce a blueprint for a new policy direction. Nevertheless, as presented in two separate examples of expert panel work in the welfare field, panels’ work and recommendations are often rejected or not implemented by the relevant government ministry. One possible reason for this is that experts and government officials do not share the same goals (for example, economic efficiency versus dignified treatment of service recipients). Part Three recognises the ascendant position of public economic institutions in Israeli policy making. This requires that special attention be paid to the role of these institutions in policy analysis. Two chapters address this. First, Momi Dahan writes about how the Ministry of Finance conducts policy analysis and the impact of said analysis. Specifically, Dahan discusses, with recourse to specific examples, 14

Introduction

in-house analysis work in the Budget Department, inter-ministry committees and public committees as three forms of policy analysis. In-house policy analysis work is surprisingly poor. Committee work – whether inter-ministry or public – is more rigorous than the in-house alternative but even then standard practices, such as presenting government with policy alternatives, are usually absent. Dahan is adamant that the weakness of policy analysis in what is widely considered to be Israel’s most powerful executive department is not due to external inherent constraints (for example, a high degree of uncertainty in Israel); rather, it reflects the excessive power of the Budget Department that rarely deems it necessary to justify its chosen policies. Karnit Flug, Governor of the Central Bank of Israel, dedicates her chapter to policy analysis conducted at the central bank. The Israeli Central Bank is wellrespected by policy makers in Israel and abroad. This status has magnified the voice of the Bank’s Research Department, which deals with numerous issues that go well beyond macro-economic policy. To accomplish its formal role as the economic advisor to the government, the Bank employs a large research department with about 50 senior researchers well-versed in econometric methodologies. Perhaps due to its reputation, the Bank’s policy analysis products are widely cited and are often influential in government circles. The volume’s final part concentrates on policy analysis from the ‘outside’: Hagai Katz dedicates his chapter to policy analysis and the voluntary sector in Israel. Katz primarily discusses the convoluted government – voluntary sector policy network that has developed in recent decades and its impact on policy analysis. Katz describes the growth of the Israeli Third Sector and with it the growth of its policy analysis capacities. Policy analysis is conducted by a plethora of third sector organisations, some of them think tanks. The third sector’s relationship with government, however, is far from straightforward. Government’s use of the Third Sector’s analytical work is indeed increasing but government agencies prefer to establish a top-down relationship in which non-government organisations are fully subordinate to the government agency. In other words, in terms of policy analysis government – Third Sector relations are not about partnership, but about subordination. Furthermore, government also shows limited interest in policy analysis of the Third Sector that could potentially contribute to its development. Iris Geva-May and Anat Gofen, the series co-editor, collaborate in an exploration of policy analysis instruction in Israel. Policy analysis instruction in Israel is perhaps still in its infancy but it has developed considerably in recent years. The Kubersky Committee, mentioned above, stressed that government was in need of trained civil servants and, as Geva-May and Gofen report, higher education institutions created specialised programmes to address this need. In a thorough survey of seven such programmes in Israeli higher education institutions, the authors find that the intention of these programmes to contribute to the development of a more professionalised civil service in Israel is indeed backed by diverse instruction programmes that all involved a significant element of policy analysis instruction. Still, only two or three of the programmes offer stand-alone 15

Policy analysis in Israel

classes in policy analysis. Thus, Israeli programmes produce around 1,000 graduates a year, yet only a minority of them are specifically trained as policy analysts: clientoriented professional ‘problem-solvers’ that offer policy solutions in a short time. Notes In what comes next, we employ the term ‘positivist’ policy analysis to denote a form of policy analysis that tends to be narrowly instrumental and relies primarily on sophisticated quantitative techniques deployed by highly trained professionals. It should be noted, however, that the label ‘positivist’ is somewhat misleading because qualitative analysis could be equally ‘positivist’, in the classical sense of the term, insofar as the analysis is strictly predicated on empirical observations. Nevertheless, because the usage of the term ‘positivist’ in the literature is very common, we decided to employ it as defined above. 2 Indeed, the relatively recent experience of the National Task Force for the Advancement of Education (the Dovrat Commission) demonstrates that what at first may appear to be ineffective policy analysis could – even in a relatively brief period of time – affect policy. The Dovrat Commission’s report was published in 2005, two years after its appointment by the Minister of Education, and recommended the adoption of major reforms in teacher’s work conditions and requirements. Due to the opposition of the major teacher unions, the government refrained from adopting and implementing the report and it was widely considered all but dead. Nevertheless, two major reforms in teacher’s work conditions for primary and secondary schools, which were adopted three years later, were largely based on the Dovrat recommendations. 1

References Bank of Israel, 2008, Chapter 1: The economy and economic policy, Bank of Israel annual report 2007, www.boi.org.il/en/NewsAndPublications/ RegularPublications/Documents/Doch2007/pe_1.pdf Ben-Bassat, A, Dahan, M, 2006, The balance of power in the budgeting process, Jerusalem: The Israel Democracy Institute Ben-David, D, 2013, State of the Nation report 2013, http://taubcenter.org.il/ tauborgilwp/wp-content/uploads/State-of-the-Nation-Report-2013-Hebrew. pdf Cohen, N, 2013, The power of expertise? Politicians–bureaucrats interactions, national budget transparency and the impact of the Israeli finance ministry on health policy, Social Security [in Hebrew], 91, 59–88 DeLeon, P, Resnick-Terry, P, 1998, Comparative policy analysis: Deja vu all over again?, Journal of Comparative Policy Analysis 1, 1, 9–22 Dobuzinkis, L, Howlett, M, Laycock, D, 2007, Policy analysis in Canada: The state of the art, in L Dobuzinkis, M Howlett, D Laycock (eds), Policy analysis in Canada: The state of the art, pp 3–18, Toronto: University of Toronto Press Dror, Y, 1968, Public policy making re-examined, Scranton, PA: Chandler Fleischer, J, 2009, Power resources of parliamentary executives: Policy advice in the UK and Germany, West European Politics, 32, 1, 196–214 16

Introduction

Gerschenkron, A (ed), 1962, Economic backwardness in historical perspective, Cambridge, MA: Harvard University Press Geva-May, I, 2002, Cultural theory: The neglected variable in the craft of policy analysis, Journal of Comparative Policy Analysis 4, 3, 243–65 Geva-May, I, Kfir, A, 2000, Developments in policy analysis and evaluation in public administration, Public Administration 78, 2, 409–22 Gourevitch, P, 1978, The second image reversed: The international sources of domestic politics, International Organization 32, 4, 881–912 Haklai, O, 2004, Palestinian NGOs in Israel: A campaign for civic equality or ethnic civil society?, Israel Studies 9, 3, 157–68 Hird, JA, 2005, Power, knowledge, and politics: Policy analysis in the states, Washington, DC: Georgetown University Press Howlett, M, 2010, Designing public policies: Principles and instruments, New York: Routledge Jamal, A, 2011, Arab minority nationalism in Israel: The Politics of indigeneity, London: Routledge Kellner, V, 2012, To die according to Jewish law, Globes [in Hebrew], 23 Liss-Ginsburg, G, 2013a, The employment of Arab higher education Graduates in Israel: A survey (second report, in Hebrew), Jerusalem: Ministry of Industry, Trade and Labor Liss-Ginsburg, G, 2013b, Voucher program for minority higher education graduates: Stage 1 report, Jerusalem: Ministry of Industry, Trade and Labor Maman, D, Rosenhek, Z, 2011, The Israeli Central Bank: Political economy, global logics and local actors, New York: Routledge March, JG, Olsen, JP, 1989, Rediscovering institutions: The organizational basis of politics, New York: Free Press Mayer, IS, van Daalen, CE, Bots, PW, 2004, Perspectives on policy analyses: A framework for understanding and design, International Journal of Technology, Policy and Management, 4, 2, 169–91 Mintrom, M, Williams, C, 2012, Public policy debate and the rise of policy analysis, in E Araral, S Fritzen, M Howlett (eds) Routledge Handbook of Public Policy, pp 3–16, Independence, KY: Routledge Prime Minister’s Office, 2012, The authority for the economic development of the Arab, Druze and Circassian sectors: Annual report 2011 [in Hebrew], Jerusalem: Prime Minister’s Office Radin, BA, 2000, Beyond Machiavelli: Policy analysis comes of age, Washington, DC: Georgetown University Press Rhodes, RAW, 1994, The hollowing out of the state: The changing nature of the public services in Britain, The Political Quarterly 65, 2, 138–51 Rhodes, RAW, 1996, The new governance: Governing without government, Political Studies 44, 4, 652–67 Weimer, DL, 2012, The universal and the particular in policy analysis and training, Journal of Comparative Policy Analysis 14, 1, 1–8

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Weiss, CH, 1982, Policy research in the context of diffuse decision making, The Journal of Higher Education 53, 6, 619–39 Yanow, D, 2000, Conducting interpretive policy analysis, Newbury Park, CA: Sage Zehavi, A, 2012, Moving in opposite directions? Religious involvement in welfare provision in Israel and the Low Countries, Social Service Review 86, 3, 429–53

18

Part One The styles and methods of public policy analysis in Israel

ONE

Policy analysis under intense pressures1 Ira Sharkansky

This chapter is not so much about the techniques of policy analysis as about elements of the Israeli society, economy and politics, as well as its international environment, that affect policy analysis, and its capacity to influence Israeli policy. It is appropriate to describe these as the stimuli and constraints of policy analysis in a particular setting, which appears to distinguish it from other countries. Other chapters in this volume will deal with the details of policy analysis in Israel. Here, policy analysis is conceived as assessments by professionals of prominent issues on the public agenda, without pre-set or intense ideological commitments. The concern is to define by techniques of rational analysis the likely benefits and costs (economic and otherwise), as well as likely side effects of alternative ways of dealing with the demands and problems that present themselves to policy makers. Some reservations are in order. ‘Policy analysis’ lends itself to a wide variety of activities. It is customary to consider it to be the analysis by professionals of problems and alternative ways of dealing with them, with an emphasis on economic assessments of benefits and costs associated with each alternative. However, the term may be employed for more casual assessments, perhaps in a discussion by individuals reasonably well informed, of issues currently on the agenda, and how authorities might deal with them. Yet another reservation concerns the emphasis in this chapter of external and cultural constraints on policy analysis. Some of those constraints may in fact be the result of decisions taken at an earlier time by Israeli policy analysts and officials. If one external constraint is the frequency and severity of international condemnation, this may reflect attitudes held by outsiders who object to statements or actions of Israeli officials. It is also appropriate to note that while Israel is a distinctive country of important traits, it also shares many of the traits common to well-to-do democracies. These also shape Israel’s politics and public policies.

Constraints Israel is an especially contentious society, and is often in the world’s spotlight. Its own traditions define its people as Chosen by the Almighty, and a light unto the Gentiles. Those traits are associated with culturally-imbued intense selfcriticism. Israel’s location in the Promised Land also affects the political culture, 21

Policy analysis in Israel

and attracts the attention of outsiders who want their share of the Promised Land, or demand high – perhaps impossible to achieve – standards of excellence from those who live there. Israel is widely accused of violating international law by settling a significant percentage of its population on territory that is illegally occupied. The location of its capital is virtually unrecognised as such, and its government is said to be largely responsible for the lack of progress toward resolving international problems that have a prominent place on other countries’ agendas. Policy analysis and policy makers’ acceptance of analysts’ conclusions require at least a minimum of political dispassion. In contrast, internal and external pressures, including those which question the legitimacy of the country’s existence, make a profound level of insecurity part of the environment in which policy analysts and policy makers operate. Responses to those pressures add to the agenda proposals beyond the range of practical achievement, such as a complete withdrawal from the West Bank or – alternatively – the annexation of land that others consider to be theirs, and assure intense criticism – some of it motivated by religious demands that brook no flexibility – of whatever professionals might propose and policy makers decide. This chapter describes key elements of Israel that frustrate or constrain policy analysis: chronic issues of security; a culture imbued with intense self-criticism; an economy wealthy enough to provoke demands for services of the highest quality, but not wealthy enough to pay for them; and several elements in the population that constantly make demands that are anti-economic. A State Comptroller who is more aggressive and expansive than equivalent functionaries in other countries in criticising what authorities do and fail to do illustrates how these traits affect the policy analyses apparent in its official reports.A style of policy making that emphasises coping with insoluble problems – as opposed to solving them and removing them from the public agenda – reflects the traits already described and adds its own considerable constraint on policy analysis and the influence of analysts. The emphasis in this chapter is on traits that frustrate, or limit policy analysis. They do not prohibit policy analysis. There is a great deal of policy analysis showing a wide range of economic and intellectual sophistication. Those who say that Israel does no policy analysis are typically reflecting the country’s tendencies toward intense self-criticism. They may be saying that they do not agree with the results of policy analysis, or with the actions of policy makers who may pay attention to policy analysis, but give greater weight to political constraints. Or they may be saying that the argumentation about one or another option is not really ‘policy analysis,’ even though it may reflect an impressive level of intellectual sophistication.

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A problematic country Israel’s problematic status may be defined by the magnitude of its financial outlays on security, as well as the contentious nature of its territory. Israel’s military outlays were 7.3 per cent of gross domestic product in a recent year, compared to the average 1.8 per cent for 23 other western democracies (USCensus Bureau, 2012). An estimated 722,000 Israelis are living beyond the pre-1967 boundaries, in what many important countries and international organisations describe as ‘occupied territories’ (Hayom, 2012). The explicit or implicit message is that more than 9 per cent of the total population and more than 12 per cent of the Jews are living in violation of international law (CBS, 2011). As recently as November 2010, the President of the United States insisted that Israel stop construction in neighbourhoods of Jerusalem where Jews have been living since 1967. That produced a headline in Ha’aretz, ‘Netanyahu to Obama: Jerusalem is not a settlement’ (Ha’aretz, 2010). Currently there are about 200,000 Jews living in neighbourhoods of Jerusalem that the country’s most important ally has said are not properly part of Israel. They represent 30 per cent of the city’s Jews, according to Israel’s definitions of Jerusalem’s boundaries) (CBS, ndb, Table 2.7). In a situation where that percentage of a country’s dominant population group in the purported national capital is said to be illegitimate by its major ally, the country hardly seems to be of a normal type where dispassionate policy analysts are able to work in isolation from political pressures.

Israel’s cultural roots The extreme nature of self-criticism that is part of Israel’s political culture has its roots in the Hebrew Prophets. They were noted for their criticism of political and economic elites no less than for being visionaries (Urbach, 1987). There was Samuel against Saul, Nathan against David, Elijah and Micaiah against Ahab, Elisha against Jehoram, and – perhaps most extreme – Jeremiah against Jehoiakim, and Zedekiah. The prophets have achieved a sacred status in Judaism, but their lives were not easy. We might view them as ancient policy analysts, or at least as severe critics of those who made policy. If we accept the histories reported in the Hebrew Bible, Elijah fled to the desert in order to avoid the fate of other prophets killed on the orders of Queen Jezebel (I Kings 18, 19). The prophet Micaiah was last seen being imprisoned because of his unfavourable advice to Ahab (I Kings 22, 28). Amos was sent out of the kingdom of Israel on account of his prophecies (Amos 7, 10–17). There is a rabbinical tale that King Manasseh had Isaiah sawn asunder because of his prophecies (Urbach, 1987, 559). King Jehoiakim had Uriah killed for his prophecies (Jeremiah 26, 20–3). Jeremiah was in and out of trouble during the regimes of Jehoiakim and Zedekiah. However, King Zedekiah provided protection to Jeremiah against officials who wanted to kill him as a traitor 23

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for demanding that soldiers did not resist the forces of Babylon. The essence of Jeremiah’s prophecy was that the Babylonians were sent by the Lord to punish the Judeans for their wickedness (Jeremiah 38). Israeli Jews read the books of the Prophets as part of their religious rituals. The importance of criticism may be seen in a passage from Amos, to be shown below, that elevates justice above the rituals of sacrifice that were central to ancient Judaism (Amos 5, 22–4). It is useful to view the prophets’ concern with justice as carrying over to contemporary Israel. One place where it appears is in the traits of Israel’s State Comptroller. That institution may be unique among its counterparts in operating according to a law that authorises the review of public bodies on the criteria of ‘moral integrity’. The Comptrollers of other national governments focus largely on financial record keeping, or the balance between various reports of government income and spending. The more assertive of them deal with issues of government economy, efficiency, and the effectiveness of programmes to achieve their objectives (State Comptroller’s Office, 1991). In practice, other state auditors deal with improper, or corrupt actions that appear in the reports of Israel’s State Comptroller. However, the appearance of moral integrity in the law empowering Israel’s State Comptroller is distinctive, and suggests the concerns of Biblical Prophets. Whether there is more or less assessment of immorality in government, or more or less corruption in Israel or elsewhere, are questions that defy clear definition and systematic analysis.

The State Comptroller and policy analysis Official reports issues by Israel’s State Comptroller demonstrate the extremism of criticism generated by one group of policy analysts who examine what policy makers and administrators have done, or have failed to do. The reports generally receive headlines in the media. The controversy surrounding a recent Comptroller, Micha Lindenstrauss, demonstrates that policy analysis is not free of political controversy. Critics assert that Micha Lindenstrauss pushed the limits of his office beyond what is proper or reasonable. However, when his activities are examined in light of the law governing Israel’s State Comptroller, and the practices of his predecessors, it appears that he operated within the limits set both by the law and two of the Comptrollers who came before him (Sharkansky, 2002). Lindenstrauss’s reputation as an extremist comes partly from comparison with his immediate predecessor. Justice Elieazer Goldberg was not the aggressive seeker after sensitive issues and media publicity that marked Lindenstrauss’s tenure. However, Goldberg came after Justice Miriam Ben Porat. The more passive Goldberg may have been chosen, at least in part, to counter the view among Knesset Members (who choose the Comptroller) that Justice Ben Porat had been too aggressive in criticising public officials. When Ben Porat is viewed in context, however, she seemed to

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be operating according to a model set by an earlier State Comptroller, Yitzhak Tunik (Sharkansky, 2002). Each of the State Comptrollers noted for pushing the limits of their office – Tunik, Ben Porat and Lindenstrauss – did nothing of the kind. They were working in the context of a legal framework that may be the most far reaching in the world with respect to a country’s State Comptroller. Israel’s law provides the State Comptroller with access to governmental bodies in the widest sense of that term, including local authorities and governmentsupported entities that operate in the private sector (sometimes called ‘Quasigovernmental’). Israel’s law is conventional in allowing the State Comptroller to judge audited bodies in terms of the accuracy of their financial records, the legality of their operations, and their accomplishment of public policy objectives. Where Israel’s State Comptroller is unusual is the law’s endorsement of ‘moral integrity’ as appropriate criteria for the Comptroller assessments. What is ‘moral integrity?’ The concept is one of the most open imaginable. Its presence in the State Comptroller’s statute seems to reflect the respect for moral judgement and criticism that has been part of Judaism since the time of the Prophets. The prophet Amos said most clearly what is also apparent in the Books of Hosea, Jeremiah and Isaiah. They and other Prophets saw themselves as speaking the words of the Lord, finding fault with the behaviour of economic and political elites, and calling down God’s punishment for wrongdoing. According to Amos, God did not want religious ritual but justice. I hate, I despise your religious festivals; your assemblies are a stench to me. Even though you bring me burnt offerings and grain offerings, I will not accept them. Though you bring choice fellowship offerings, I will have no regard for them. Away with the noise of your songs! I will not listen to the music of your harps. But let justice roll on like a river, righteousness like a never-failing stream! (Amos 5, 21–4) If the typical product of a national Comptroller is the accuracy of financial record keeping, Micha Lindenstrauss wandered far from that. Perhaps the hottest of his concerns, in terms of riling the media and bothering elected politicians, was his willingness to examine, in what he called ‘real time’, issues already in the media spotlights: the forest fire that claimed lives on the Carmel, an individual’s finagling of real estate that became prominent when Yoav Galant’s appointment to the top position in the Israel Defence Forces was waiting confirmation, and the preparation of various public bodies for earthquakes (which gained media weight after the disaster touching nuclear energy in Japan). When the price of cottage cheese found its way to the headlines and set off social protests, Lindenstrauss wasted no time in indicating his willingness to examine that. The cartoonist for Ha’aretz portrayed him with a cunning, hungry look, asking for a spoon with which to taste the problem and, presumably, to gain more news coverage (Ha’aretz, 2011). 25

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Skipping over the more conventional and low-key Goldberg, it is difficult to differentiate Lindenstrauss’ focus on the spectacular issues from those of Yitzhak Tunik’s concern with the kiting of bank shares, the widespread and indiscriminate arrest of Arabs close to the scene of a terror event, the political appointments made by a foreign minister, or the benefit–cost analysis of the Lavi military aircraft. Soon after Tunik’s report on the Lavi, the high profile project was killed by a close vote in the government. An angry Prime Minister Yitzhak Shamir asked, ‘Who is the State Comptroller?’ Shamir’s remark had a later parallel when Prime Minister Ehud Olmert accused Lindenstrauss of unprecedented cynicism and criminality for leaking details of a report critical of the government’s handling of the 2006 Lebanon war. Justice Ben Porat also did not abstain from high profile reports about sensitive subjects. The list associated with her includes the criticism of the gas masks distributed to the entire population by the IDF, a comparison of education in Jewish and Arab sectors, a report about the activities of Interior Minister Ariyeh Deri that figured in the run-up to a criminal indictment, trial, incarceration, and the derailing, for more than a decade, of a political career that was one of the most promising outside of the major political parties. Justice Ben Porat was also responsible for one of the earliest inquiries into the behaviour of Ehud Olmert, and a report that faulted him as Minister of Health for improper contracting with a business run by a major player in Likud. Perhaps the most political and media-centred activity in the career of Justice Ben Porat was her willingness to enter the fray between two prominent politicians, Yacov Turner and Moshe Shahal, where each accused the other of lying about their roles in a quarrel concerned with a political appointment. Justice Ben Porat made a decision as to who had lied, but found herself overruled when the party she considered to be at fault brought a case against her in court. It may only be a minority of reports issued by Yitzhak Tunik, Miriam Ben Porat, or Micha Lindenstrauss that attract the attention of the media and the public. Much of what Israeli State Comptrollers do looks pretty much like the work of other national audit bodies. The bulk of the two thousand or so pages published each year by Israel’s State Comptrollers deal with financial record keeping, the administrative procedures followed by public bodies, or judgements as to whether they have achieved their goals with a reasonable expenditure of public money. What has made this triad of State Comptrollers interesting from the perspective of policy analysis is their willingness to examine the most controversial of issues. As such, they have all received their share of criticism, often of the kind that they are overstepping their office and competing with elected politicians. Yet with ‘moral integrity’ as one of the criteria written into the law, it is not appropriate to accuse any one of them of violating the mandate of their office. Moreover, there is no metric that allows the ranking of Tunik, Ben Porat, or Lindenstrauss as to the extreme nature of their reports, insofar as ‘moral integrity’ is a concept without borders.

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While the State Comptrollers appear to be within the normal ranges of Israeli activity as defined by law, precedent and political culture, it is appropriate to ask if their activity somehow threatens the appropriate balance between the various branches of government. This is an issue about as insoluble as the definition of ‘moral integrity’. More than 60 years after its birth, it is difficult to conclude that the Israeli polity is not a working success. Opposition to its activities is in plentiful supply, but not clearly beyond what is appropriate for a democratic regime with free media and a competitive, argumentative culture that recognises the value of criticism. An activist State Comptroller both reflects and reinforces the cultural norm of criticism that has been with Israel’s Jewish population for at least 2,500 years. The prophetic predecessors of the State Comptroller are the best testimony of that heritage. Between the Biblical Prophets and the most recent State Comptroller are two millennia of intellectual creativity spanning prominent figures in the rabbinic tradition, as well as leaders in various fields of science, humanities, and political protest. Israeli-Jewish culture being what it is, it would be remarkable if Israel’s State Comptrollers were not active in pushing the boundaries of what their counterparts do elsewhere. The activities of Israel’s State Comptroller demonstrate one form of policy analysis that has a high political profile. Its association with the open-ended value of ‘moral integrity’ both reflects ancient norms in contemporary politics, and provokes questions about the prospects of more conventional policy analysis – that operates at a lower emotional key with an emphasis on economic costs and benefits – to influence policy in a society where moral integrity and intense criticism are such prominent values.

An economy that is wealthy but far from the wealthiest Another feature of Israel that complicates dispassionate, professional modes of policy analysis is the level of its economy. The World Bank classifies Israel among the wealthiest countries, but it is not close to the top of that category. While the average of OECD members’ GDP/c was $38,217 in 2013, Israel’s was $32,065 (OECD, 2015). What this does to Israel’s political discourse, and issues of policy analysis, is that activists demand levels of service or social conditions similar to those of the wealthiest countries. However, those services or conditions reflect the level of a country’s economic resources. By following the prophetic style of intense criticism, and accusing Israel of failing to meet standards that prevail in Northern Europe or North America, activists – some of them using the tools of policy analysts – demand standards that Israel is not likely to meet within its economic constraints. The resources available to Israeli policy makers across the range of social services are even less than generally associated with measures such as GDP/c, insofar as Israel spends almost four times the proportion of its resources on national defence than is the norm among democracies.

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Israel’s policy analysis may also suffer from it being a small country, and – like others of its kind – highly dependent on others. Compared to the United States and the large countries of Western Europe, Israel sells a large proportion of its output on international markets, and buys on those same markets the raw materials that it cannot produce locally. Economic dependence exposes the government to the constant possibility of economic sanctions if it does not comply with expectations concerned with Palestinians, Jewish settlements in the West Bank, or other issues that attract the attention of Israel’s critics. Again we see the complexities in sorting out the influences on policy analysis from policy analysis itself. Israel’s environment includes activists motivated in part by the limitless aspirations of the Hebrew Prophets for justice, who demand what is necessary to produce an idealised peace as well as an optimum level of public services. They do not prevent policy analysis. Indeed, the realities that activists would change are themselves the results of earlier Israeli policy analyses and the actions of policy makers who did what they thought was necessary or appropriate. Nonetheless, the intensity of current demands adds to the problems of policy analysts to follow those prescriptions of their craft that may be appropriate in settings that are more benign and wealthier.

Coalition governments, with ultra-orthodox parties permanent fixtures or looming possibilities, and other problematic populations The nature of Israel’s political structure, the importance of religion in the culture, and the importance of ultra-Orthodox political parties also tip the scales against conventional ways of policy analysis. Relevant here is Israel’s perpetual character as a society ruled by government coalitions, and the role of ultra-Orthodox parties as present or potential coalition partners. This contributes non-economic or anti-economic constraints on prominent issues of public policy. It produces a situation where a substantial percentage of the working age population receives public financial support to remain outside of the workforce, where the primary and secondary education serving the same population is kept from providing courses in foreign language, mathematics, or science that will make a contribution to the students’ marketable skills, and where the same population receives financial support that encourage a rate of reproduction three or more times higher than that of the secular population. The ultra-Orthodox are not Israel’s only problematic population. Politically shrewd settlers in the West Bank pressure the government to support them, despite widespread condemnation in international forums. This is not only problematic for Israel politically, but skews economic decisions by the costly subsidies provided to the settlers. Prominent are the assignments of army units to guard them, and the construction of roads built for their exclusive use and forbidden to Palestinians in order to minimise the danger of drive-by shootings and roadside bombs.

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Israeli Arabs are also problematic for those aspiring to a large role of rational, non-ideological policy analysis. Arabs characteristically vote for anti-establishment political parties that make up close to 10 per cent of the Knesset. Knesset members of those parties spend their time challenging Israel’s legitimacy and refuse to support the government in exchange for benefits given to their constituents. There may be nothing a ‘realistic’ policy analyst could propose that would bring these Knesset members into the conventional political process of negotiating for benefits.

Coping Being in the world’s spotlight, accused of expropriating territory and blocking opportunities for peace, the heritage of the Biblical Prophets, a marginal economic condition and a sector having to be reckoned with in policy making that rejects modern norms of contributing to the workforce do not keep Israelis from practicing policy analysis. There are ample and impressive statistical compilations of what the country provides by way of services, and the comparative standing of Israel on social, economic and political indicators (CBS, nda). Government bodies, most notably the Finance Ministry and the Bank of Israel, routinely perform systematic analyses dealing with benefits and costs. Ministries concerned with infrastructure, such as Transportation, Communications, Construction and Housing, Environmental Protection, as well as the Ministry of Trade and Commerce, produce sophisticated analyses in their fields of activity. Nonetheless, frequent threats of warfare or lower level security problems, as well as a sizable and growing sector of religious extremists render several of Israel’s problems insoluble under present and foreseeable conditions. They join with intense and persistent criticism from external and internal sources, coalition politics, and the nature of Israel’s economy and culture to assure a major role for coping in Israel’s policy making and programme implementation. The synonyms of coping show that it does not seek to solve problems once and for all times: contend, deal with, endure, fight successfully or on equal terms, handle, hold one’s own, manage, struggle, subsist, survive, negotiate, bargain, barter, weather, adapt (Schaefer, 1986) and satisfice (Simon, 1976). These terms imply decisions that are ‘good enough’, even if they are not what any of the participants really want. Political scientists have tended to use coping casually to describe policy making in difficult settings, or to prescribe how policy makers should deal with vexing problems. A number of studies include coping in their titles or sub-titles, but do not provide any systematic discussion of the concept. In most of these cases, the prominent use of the word seems designed to emphasise the difficulties encountered (Crocker, 1981; Chazan, 1986) Daniel Patrick Moynihan used coping to convey good judgement, or a capacity to anticipate developments that require action (Moynihan, 1975). The concept of coping is more fully developed by psychologists, who use it to describe how individuals deal with stress (Coelho et al, 1974). More than 29

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political scientists, psychologists have been systematic in clarifying a variety of stresses and coping behaviours. There are differences between ‘active’ and ‘passive’ coping. Active coping responds to stress with challenge, commitment, creative information seeking, the definition and ranking of goals, organisation and discipline. It includes efforts to salvage something from a difficult situation; to keep a process going in the expectation of greater opportunities or holding off greater losses; surveying options and recruiting support; changing expectations in the face of conditions that are not likely to change in the short range; ranking priorities in order to achieve the more important at the expense of the less important. Passive coping responds to stress with a lack of control, hopelessness, confusion, rigidity, distortion, disorganisation, randomness, disorder, distress, depression, anxiety, withdrawal, flight or submission. It exhibits pointless emoting that involves loss of control and direction for oneself and potential allies; quixotic choice of options in an effort to do something! without taking account of likely costs and benefits; and frittering away resources in efforts that do not produce significant accomplishments. Psychologists have made impressive progress in classifying coping behaviours and analysing data about coping with different kinds of stress. However, there remains considerable dispute as to the capacity of particular coping behaviours to assure a relief of various kinds of stress (Folkman, 1984). Prominent among the stresses of politics are contradictory demands, as when one group demands increased spending for services while another group complains about taxes or government debt, and urges cutbacks. There are seldom enough resources to pay for everything that people want. Among groups willing to innovate there are further complications between those wishing to put resources into different programmes, or to pursue specific programmes in different ways. There is also likely to be competition between those who want the same prized appointment or contract. Uncertainty is the bane of public life. Policy makers are not sure that a proposal will accomplish what its advocates promise. Well laid plans go astray if there is an unexpected increase in the cost-of-living index, a change in the exchange rate of the national currency, or the threat of another uptick in terrorism. Coping is especially attractive in a society like Israel, in a hostile environment with heavy outlays on national defence, and actions that are never enough to solve those problems once and for all times, as well as insoluble problems associated with the ultra-Orthodox sectors, a feisty settler movement opposed to any likely arrangements with Palestinians, and activists who promote social policies similar to those of countries with richer economies. As a political strategy for dealing with problems, coping is associated with a variety of tactics. Or to put it more simply, there are several ways to cope. They include accommodation, improvisation, avoidance, indirection and ambiguity. There are no crisp definitions of these terms, or clear boundaries between behaviours associated with each. All are fuzzy enough to cause problems for 30

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policy analysts who aspire to clear definitions of one’s problems, the options available for solution or treatment, and precise measures of the costs and benefits associated with each option. Prominent among the examples of unsettled issues reflecting coping is the ambiguous legal status of Jewish settlements beyond the 1967 boundaries, and the financial aid that flows to the ultra-Orthodox sector from a variety of public sources without any noticeable payoffs for the values of equity or economic growth. Also on Israel’s agenda in recent years were calls for the reform of social and economic policies said to discriminate against the ‘middle class’. That in itself is a vague concept, which includes individuals having different aspirations as well as a range of economic resources and earnings potential. Street demonstrations in 2011 of perhaps 200,000 people returned to the headlines after the election of 2013 that made a new party the second largest in the Knesset, and created a coalition without ultra-Orthodox parties. Demands for evening the burdens (that is, prodding or forcing young ultra-Orthodox men into the military or social service, and then the workforce), and easing the financial burdens of the middle class coincided with a record budget deficit that was said to require cuts in services and increases in taxes. It was a time for coping with the demands of secular and ultra-Orthodox activists that contrasted sharply, pressed policy makers to formulate proposals that took account of intensely held secular ideology and religious doctrines, and raised questions as to the possibilities of actually implementing whatever proposals could find the appropriate majorities in the government and Knesset. Soon after, the United States President and Secretary of State embarked on a campaign to pressure both Israel and the Palestine National Authority to begin negotiations aimed at producing a ‘two-state solution’ and finalising a number of outstanding issues. Israelis in favour or opposed to territorial and other concessions promised to up the political ante of any assessments of what Israel should do in the presence of the opportunities and constraints that would be associated with Palestinian demands and American involvement. Jews have a history of coping. They have been doing it for the better part of 3,000 years. Their insoluble problems initially were those of a small and poor population occupying territory on the bridge between continents that was prized by powerful empires, and later being minorities, often set-upon by hostile populations and regimes. It is far beyond this chapter to rank nations on their coping skills, or to compare Israel with other polities as to the incidence of coping in its policy making. However, it should be no surprise that Jews were prominent in the development of psychology and psychoanalysis that rely heavily on treating clients by urging them to cope with issues of illness, depression, family difficulties and aging. Modern Israel has returned to the situation of the ancient country’s small population, occupying a strategically valuable piece of landscape in the midst of hostile populations. No Israeli political party has yet succeeded in winning a majority of votes in a national election, and thus having a relatively easy task of 31

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formulating and implementing public policy. Coping with hostile others and its own contentious politics is, arguably, the primary style of Israeli politics and policy making. It is likely that Israel’s proclivity to cope via actions that are amorphous or that evade aspirations of solving complex problems once and for all is also factored into the work of the country’s policy analysts. Coping is flexible in the extreme. An ideal mode of policy analysis seeks firm answers with respect to the worthiness of one policy option or another. Coping avoids firmness or controversy. It is likely to give at least a little bit to each interest. Often the ‘little bit’ is defined in the amorphous atmosphere of negotiations, or ‘feeling out’ the opposition. These ways of coping are likely to leave aside the reports and recommendations of policy analysts.

Where does this leave policy analysis? Even in a polity that most often seems to be coping with intractable problems, there is room for policy analysis. Intelligent coping is better than a haphazard or panicked selection of tactics, or the shifting of postures from one fashionable activity to another. Knowing the likely costs, effectiveness and side effects of an action comes from policy analysis, even if the ‘analysis’ is little more than extended discussion in a committee among individuals with some knowledge of the issue, the policy options and their constraints. It is tempting to say ‘the more the better’ in terms of the sophistication of what goes into a policy analysis. Yet Israel’s social, political, economic and international constraints are always somewhere in the near background. If the issue is one of dealing with troublesome neighbours by means of military force, realism involves taking account of what the great powers will tolerate. Realism also involves taking account of the partners in the governing coalition, including the ultra-Orthodox. Even if they are not members of the present coalition, the ultra-Orthodox are potential partners of the next coalition. Realism also involves taking account of Israel’s economy. For the foreseeable future, the country seems likely to be among the less wealthy of the wealthiest countries. That is a setting that provokes aspirations for the best of policy options, but without the resources that make them practical. There is a lot of policy analysis in Israel. As other chapters in this volume demonstrate, the Finance Ministry and the Bank of Israel are staffed by professionals. There are professionals in other ministries that produce detailed studies that fit within most conceptions of policy analysis. The State Comptroller aspires to assess accomplishments in some of the most sensitive issues faced by the country. Those who say that there is no policy analysis, or not enough, often seem to be saying that current policy does not conform to their desires. Even if policy making in response to sophistical analysis in its idealised image suffers, the country has done well. Among the one hundred or so countries that 32

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emerged in the period after the Second World War, Israel has been outstanding in its records of economic growth and the quality of its democracy.

Israel is different, but not in all ways While the theme of this chapter is Israel’s peculiarities, it is unwise to carry that theme too far. Concepts of the Promised Land, Chosen People, and Light unto the Gentiles have served the Jews well. Since biblical times they have been associated with selfesteem despite adversity. We can surmise that Jewish self-esteem has contributed to communal solidarity and survival, as well as individual success in economics, culture and politics. There is no denying that Israel has distinctive traits. The period 1945 to 1967 saw a change in Jewish fortunes from victims to victors, a mass migration of Jews that recalled the return from Babylonian exile described in the biblical books of Ezra and Nehemiah, and the uniting of Jerusalem under Jewish rule for the first time in two millennia. Believers saw all of this in the context of Judaic themes of redemption. Even non-religious and anti-religious Zionists also saw parallels with the Hebrew Bible (Benvenisti, 1989; Harkabi, 1983). Modesty may be more than can be expected from a people thought to be chosen by God. For those who are not satisfied with a reasonable level of aspirations, as defined by the country’s resources, an insistence on ever greater achievements in a favoured field of policy can produce a distortion of allocations. The results may be shortfalls in the accomplishments of other public policies that are not currently fashionable, or damage to the private sector as a result of taxes that are higher than in counties that are its competitors in international markets. Political intensities attach to several of the items that have long been on Israel’s public agenda, and intensities do not sit well with dispassionate policy analysis that seeks a rational balance among competing interests. No one should deny that economic claims and counter claims also figure prominently in Israeli policy disputes. Whether those economic considerations do better or not as well in competing with other considerations prominent in national politics – as compared to other democracies – is a tantalising question that is beyond the realm of this chapter.

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Note 1

My thanks to Mattan Sharkansky, Department of Political Science, University of Rochester, for helpful comments on an earlier draft.

References about.com, nd, HDI – The Human Development Index, http://geography.about. com/od/countryinformation/a/unhdi.htm Benvenisti, M, 1989, The shepherds’ war: Collected essays (1981–1989), Jerusalem: Jerusalem Post CBS (Central Bureau of Statistics), 2011, Statistical abstract of Israel, Table 2-1, Jereusalem: Central Bureau of Statistics CBS (Central Bureau of Statistics), nda, Publications and products, www1.cbs.gov. il/reader/cw_usr_view_Folder?ID=141 CBS (Central Bureau of Statistics), ndb, Statistical abstract of Israel 2011, Table 2.7, www1.cbs.gov.il/reader/ Chazan, N, 1986, Ghana: Coping with uncertainty. Boulder, CO: Westview Press Crocker, CA, 1981, South Africa’s defense posture: Coping with vulnerability, Beverly Hills, CA: Sage Publications Folkman, S, 1984, Personal control and stress and coping processes: A Theoretical analysis, Journal of Personality and Social Psychology, 46, 4, 839–52 Coelho, GV, Hamburg, DA, Adams, JE, 1974, Coping and adaptation, New York: Basic Books Ha’aretz, 2010, 9 November, www.haaretz.com/news/diplomacy-defense/ netanyahu-to-obama-jerusalem-is-not-a-settlement-1.323825 Ha’aretz, 2011, 21 June, Amos Biderman Harkabi, Y, 1983, The Bar Kokhba syndrome: Risk and realism in international relations, Chappaqua, NY: Rossel Books OECD, 2015, Gross national income (indicator), doi: 10.1787/8a36773a-en, www.oecd-ilibrary.org/economics/gross-national-income/indicator/ english_8a36773a-en IsraelHayom, 2012, 15 January, www.israelhayom.com/site/newsletter_article. php?id=2676 Moynihan, DP, 1975, Coping: On the practice of government, New York: Vintage Books Schaefer, RH, 1986, Coping with life crises: An integrated approach, New York: Putnam Press Sharkansky, I, 1999, The promised land of the chosen people is not all that distinctive: On the value of comparison, Israel Affairs, Winter–Spring Sharkansky, I, 2002, Israel’s State Comptroller and public administration, in DN Menahem, Public policy in Israel, pp 133–50, London: Frank Cass Simon, H, 1976, Administrative behavior, New York: Free Press State Comptroller’s Office, 1991, State audit and accountability, Jerusalem: State Comptroller’s Office

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State Comptroller, nd, The State Comptroller and Ombudsman of Israel, www. mevaker.gov.il/serve/homepage.asp Urbach, ET, 1987, The sages: Their concepts and belief, Cambridge, MA: Harvard University Press US Census Bureau, 2012, The 2012 statistical abstract: The national data book, Table 1406, Washington, DC: US Census Bureau

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TWO

Policy analysis evolution in Israel: building administrative capabilities Jennifer Oser and Itzhak Galnoor

Introduction This chapter examines how policy analysis has evolved in Israel over time in relation to governmental public administration. The main question we will address is how policy is formulated and policy-making capabilities have evolved over time in Israel, despite the relative dearth of policy analysis as formalised practice in the public sector. We address this question by examining governmental public administration in its broadest meaning, focusing mainly on the civil service for which government ministers have ministerial responsibility. The civil service is first and foremost a state institution, and due to its permanence and continuity it is in some ways even more representative of ‘the state’ than elected institutions. In the Israeli context this raises several questions: is the weakening of the state also evident in the civil service? Has the relationship between the civil service and the political echelon changed over time? Is the Israeli civil service capable of making an autonomous, professional contribution to better policy-making? Since the governmental civil service plays a key institutional role in making and executing policy decisions, this chapter begins by examining the evolution of its role and functioning. We first review the basic elements of public administration in Israel, and then contextualise this description in comparative perspective in order to assess the changes that have taken place in Israel since the founding of the state. Subsequently, we review shifting sector boundaries between the public, private and civic spheres. A consideration of these boundaries provides the context of the trend toward privatisation, meaning the shifting of responsibility from the governmental–public sector to other spheres. To consider privatisation and its limits, two cases in the 2000s are considered – the attempt to start the privatisation of the prison system, and the tender for international consultants to outline a strategic plan for Israel’s socio-economic future. Since these cases are so recent to the time of this writing, the assessment of their ultimate impact on policy change is necessarily speculative in nature. These examples, however, serve as useful windows for gaining insight about key factors that have influenced the evolution of policy analysis in Israel, and will continue to do so in the foreseeable future. The chapter concludes with a consideration of how administrative capabilities in Israel can be developed in the years to come. 37

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Even though it is beyond the scope of this chapter to add to the literature that attempts to define the term ‘policy analysis’ (compare Howlett and Wellstead, 2011, 613), a definitional note is in order. The evolution of policy analysis in Israel in this chapter is analysed through the lens of the evolution of the administrative capacities of public institutions and public officials who are charged with the responsibility of policy analysis and implementation, broadly defined. This scope is intentionally broad, drawing on recent insights that the work of highquality policy analysis is not generally conducted by technocrats using formal policy analysis techniques (such as cost–benefit analysis) but rather by ‘process generalists’ working in an institutional environment that develops individual skills and organisational learning over time (Howlett and Wellstead, 2011).

An overview of public administration in Israel1 It has been claimed that politics is the art of the possible; if this is so, then public administration is the institutional mechanism which makes politics possible (Galnoor, 2011, 12). We should therefore begin with an overview of this mechanism. In a democratic system, it is the elected officials – the politicians and no one else – who are accountable to the public for carrying out collective missions, and for producing public goods. To carry out the public functions for which elected officials are ultimately accountable, executors are required, and these are the civil servants. A prime area of commonality between politics and public administration is that in democratic regimes the legitimacy of the political system, as well as its management mechanism, is rooted in efforts to achieve common goals. In addition, ‘politics’ in the conventional sense also exists within public administration since bureaucrats in public offices are not immune from managing conflicts. However, two simple distinctions are crucial for understanding how politics and public administration differ. First, political and administrative processes are fundamentally different due to the fact that politicians are elected, whereas civil servants are appointed. Second, power struggles in the political realm are more external and directed at mobilising support, whereas power struggles in the realm of public administration are primarily intra-organisational. In Israel, the civil service performs three main functions. First, to participate in the process of policy-making and to take responsibility for its implementation. Second, to provide services to individuals, groups and organisations. Third, to establish and implement the regulatory function of overseeing tasks performed by others in order to protect the public interest and safeguard individual rights. While the ‘civil service’ narrowly defined as state employees still plays a central role in carrying out these three functions, one of the main developments in Israel over time is that organisations outside of the confines of the governmental civil service ministry are increasingly carrying out all the above listed functions. A useful distinction for our purposes is to assess to whom the organisation is accountable in political-administrative terms. 38

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Three main categories of organisations must be taken into account in order to understand the political-administrative capacity of the state in context. The first of these three categories – public sector organisations – are further delineated in Table 2.1. In particular, this table demarcates the distinction between governmental public administration organisations in the executive branch which together constitute the civil service, as distinct from public sector entities that are not part of the executive branch.

Table 2.1: Public sector organisations in Israel Governmental public administration (civil service)

Governmental ministries and subsidiary units Statutory authorities Government corporations Service provision to individuals, groups and organisations Nongovernmental public administration1

Office of the President State comptroller Knesset administration Bank of Israel Public administration in local authorities2

Departments Municipal corporations Notes 1 This category sometimes includes the ‘national institutions’ – the Jewish Agency, World Zionist Organization, Jewish National Fund, Keren Hayesod/United Israel Appeal and its affiliates – as well as the institutions of higher learning, health funds and religious institutions. 2 In addition, there are municipal nonprofits as well as associations formed by several local authorities for purposes of sharing services.

Table 2.1 shows that the civil service is only one part of the public sector. It is therefore necessary to have a broader picture of the institutions which constitute the ‘public sector’ outside the executive branch. Namely, nongovernmental public administration and the local authorities are both prominent public sector organisations in Israel that operate beyond the boundaries of the civil service. This categorisation is intended to provide a framework for understanding the different bodies that are responsible for governmental public administration, broadly defined.

The development of the civil service in Israel Understanding the evolution of the relationship between policy analysis and the civil service over time requires a clear snapshot of the civil service at its inception in Israel. Initially, the civil service was part and parcel of the political party structure, which created inherent difficulties in fulfilling the distinction between

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politics and public administration. The close connection between political parties and the civil service at the founding of the state has, by necessity, had an impact on the civil service’s complex and subdivided organisational structure. It also affected civil service performance in all three functions of government described in the previous section – policy-making, service provision and regulation. In short, professional non-ideological policy analysis was rather rare in that period (Galnoor and Blander, 2013). In the early years of the state, the Israeli civil service dealt with almost every task, similar to new states whose social and economic institutions are evolving, but even more so due to a number of special circumstances: integrating scores of new immigrants, building an army, constructing new towns, developing and managing water resources, promoting industry and providing services to an evergrowing population. Even as these tasks kept governmental departments extremely busy carrying out state functions, senior public bureaucrats also assisted political leaders with their policy-making tasks. Despite its structural stability, the Israeli civil service has undergone significant changes since its inception that have emerged from two transformations in Israeli society. First, the standard of living in Israel has increased dramatically to be on a par with other developed nations, which has led to increased demands from citizens for better services from government ministries. Second, the state and its institutions have weakened over time. Consequently, the political-bureaucratic system that dominated the state in the early years and penetrated all social spheres has gradually surrendered its monopoly to new institutions – the economic market as well as social organisations. In some senses, the weakening or contraction of the state and its institutions is characteristic of the evolution of a state-in-the-making. An example of a policy area that has experienced a contraction of state involvement is the reduced direct governmental involvement in handling immigration and the absorption of new immigrants. Initially, this task was the responsibility of governmental ministries, the Jewish Agency and the Histadrut. In the 1990s, the public coffers still bore the cost of absorbing the wave of immigrants from the former Soviet Union and Ethiopia, but the task was increasingly handled by nongovernmental and social organisations, as well as the local authorities. Yet, in the twenty-first century, it is clear that the central government still affects all aspects of the lives of Israeli citizens, and therefore the importance of its policy-making capacity has not diminished. For example, a glance at the State Budget Law reveals that it deals with a vast range of issues, in addition to the classic tasks of the state of maintaining the rule of law, defence, and taxation.

Contraction of the Israeli civil service and the state: changing sector boundaries Despite the continued involvement of the state in a broad range of policy issues, the scope of activity of the governmental civil service in Israel has contracted 40

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significantly over time. State expenditure constituted some 30 per cent of GDP in the 1960s, reaching a high of approximately 80 per cent after the Yom Kippur War in 1973 (Galnoor, 2011, 44). Public expenditure decreased significantly by 1990, to 56 per cent of GDP, but even with this steep decline Israel was still placed second highest (behind Sweden) on the rate of state expenditure in comparison to 23 OECD countries. However, public expenditure as a percentage of GDP in most OECD countries has grown in recent years, whereas in Israel it has continued to decline to 45 per cent in 2010, which was lower than 16 of the 23 nations surveyed (Ben-David, 2011, 57–8). Concurrent with this decline in public expenditure, a major institutional shift has taken place in the division of labour in comparison to the first three decades when public activity was shared by the government, the Histadrut and the Jewish Agency, with these three partners comprising about 50 per cent of the national product (Barkai, 1964, 25). The turning point took place in 1985 with a new economic plan, after which a process of privatisation began as part of overall reform of the government market structure (Galnoor, 2015). An important component of the new economic plan in 1985 was ‘The Arrangements Law’, which was designed to allow the Finance Ministry to take drastic measures to overturn policy made by the Knesset in order to ensure economic stability at a time of unprecedented financial crisis. Though instituted as a short-term fix to an unusually dire economic situation, the Arrangements Law was never revoked, and over time the Finance Ministry has consistently used it as a powerful tool for instituting or cancelling policies by bypassing regular processes of democratic legislation. Structural changes instituted through this law have at times included matters only tenuously related to the Arrangements Law’s stated purpose of facilitating long-range efficiency. The ascendance of the Finance Ministry as a policy actor following the economic crisis of 1985 went hand in hand with an ideological effort to enhance the market economy at the expense of the welfare state. The state contraction is clearly reflected in the human resources employed by the governmental public sector. Between 1950 and 2005, the number of civil servants increased from 22,885 to 60,527, but the number per capita decreased by a factor of 2.2 (Galnoor, 2011, 25). Since the 1980s, ministries have shrunk due to contraction of the core civil service, while other components have simply been eliminated. These numbers however can be partly misleading because some employees of government ministries were transferred to authorities or government corporations, and because the number of nonpermanent civil servants employed through contractors has increased considerably. Still, the overall picture is clear: government ministries accountable to ministers have significantly diminished in size over the years. In addition, some public services are now provided jointly with private and third sector organisations, so even the label ‘public sector’ has become less clear. Some praise this change on the grounds that it reflects greater efficiency, while others view it as damaging to the scope and quality of services provided by the state to citizens. 41

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In sum, since the 1980s, public policy-making in Israel has taken the same direction as in Western democracies writ large: reduced involvement of the state in the economy at the expense of public welfare services. The push for this change came from a number of factors, including public pressure to improve services in exchange for taxes, globalisation trends that created pressures on governments to open the economy to competition, an increased tendency to rely on market mechanisms for the provision of public services, and the rapid development of technology that enabled new administrative processes (Galnoor et al, 1999, 117). Differences between countries aside, Israel has experienced changes in public administration which have been prevalent in advanced democracies in general, including the following: • Ideologically, the monopoly of the state has been increasingly challenged in all arenas. • Institutionally, independent organisations created to carry out state functions, known as ‘quangos’ (quasi-NGO’s), have become more common and more prominent. • In terms of state budgets, governmental funds have been transferred to private business firms and nonprofits to provide services on a contractual basis, leading to the increased prevalence of extra-budgetary public authorities and government corporations. The main implication of these changes for policy-making is that the boundaries between the public, private and third sectors have become blurred in terms of the responsibility and capacity for deciding upon, designing and implementing policy. In the 1960s in Israel, sector boundaries between the government, society and the private economy were almost non-existent, given the strong presence of a centralised government, a developing business sector, and a very weak autonomous civil society. Over the years, political parties lost their pivotal position in shaping the public agenda, and in their place came influences of public bureaucratic mechanisms, the media, and a variety of interest groups (Nachmias and Sened, 1999, 28). In the current era, the boundaries have shifted: the scope of state tasks continues to narrow given the contraction of a traditional welfare state; the economic market has become increasingly dominant, both ideologically and practically; and civil society and the third sector have prospered and have replaced government services in many fields. All of these shifts have taken place to some degree in most advanced democracies in recent years. In Israel, however, they have been fairly dramatic and rapid given the initial dominance of the governmental public sector. While the growth of civil society worldwide in recent decades has been referred to as an ‘advocacy explosion’ (Berry and Wilcox, 2007) and an ‘associational revolution’ (Salamon, 1994), the relatively vibrant civic life in contemporary Israel is particularly remarkable in comparison to the Israel of only 30 years ago. Independent extraparliamentary activity was not encouraged in the early years of the state, and 42

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a series of unsuccessful attempts to pass a law governing associational activity shows governmental efforts to control civic activity (Hermann, 1996; Yishai, 1991). Yet, the government’s tendency to restrict the right of association has been challenged over time by civil society activity on behalf of freedom of association (Kabalo, 2006). The subsequent liberalisation of civic associational regulation led to a rapid increase in the number of civic associations beginning in the mid-1970s, and an increased willingness to challenge the state (Yishai, 2003). A new generation of Israeli political activists came of age which led to the appearance extraparliamentary activity in the 1970s, along with the Black Panthers movement in the early 1970s, post-1973 war protests, and the prevalence of mass rallies on a range of social and economic topics (Gidron et al, 2004; Hermann, 2002). Although the degree of autonomy and influence of Israeli civil society is open to debate, its capacity for democratic engagement has increased considerably since the founding of the state (Oser, 2010; Silber and Rosenhek, 2000). The summer protests of 2011 are a recent and prominent example of the call from citizens and social groups for changes in the social-economic policy. Indeed, these protests exemplified objections to the contraction of the state and support for reinstating welfare services as well as opposition to the private sector influence on governmental policy-making. The public outcry led to the establishment by the government of the Trajtenberg Commission in the wake of the protests (Hermann et al, 2012, 69). The policy claims of the protesters were wide-ranging, as was the list of policy changes recommended by the Trajtenberg Committee. Protesters demanded a decrease in the cost of living for middle and lower classes, increased investment in public housing and education, health and welfare and the reversal of the growing regressive tax system. In addition, more general claims were raised to strengthen the welfare state, to stop privatisation and outsourcing, and to take social solidarity into consideration in establishing national policy. The Trajtenberg Committee’s recommendations directly related to many of the protesters’ claims, and the government confirmed the report in October of 2011. Yet, at the time of writing (in mid-2015), few of these recommendations have been implemented, and the ultimate impact of the protests on subsequent policy-making is yet to be determined. What is clear, however, is that the protests evidenced changes in the perceptions of the public regarding citizens’ direct participation in policy-making, and their demands for a stronger presence of the state in policy-making regarding central issues of social and economic policy (Galnoor and Paz-Fuchs, 2015).

Privatisation: examples of changing boundaries and policy implications The reason for discussing privatisation here is that one of the assumptions underlining this policy is that rather than building policy analysis and administrative capabilities, it is better to shift responsibility to the non-governmental sectors, 43

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either private or non-profit. Yet, the governmental sector and its policy-making capacities in Israel are not simply ‘crowded out’ by the increased capacity and breadth of the private sector and civil society. Rather, privatisation is a deliberate attempt to change the public policy-making structure and processes. Policy analysis is of course still performed when policy-making responsibility is shifted to the nongovernmental sector, and the primary authorities for conducting the analysis become the private or nonprofit actors who have gained responsibility as a result of privatisation. Without sufficient governmental accountability, however, the public sector may lose the capacity to weigh in on policy change over time, and to regulate these nongovernmental actors accordingly. Therefore, in addition to providing an overview of general trends of Israeli privatisation policy, this section also presents two examples that test the boundaries of state responsibility: the attempt in the 2000s to begin privatising Israeli prisons and the growing trend to outsource Israel’s socio-economic planning to international consultants. Privatisation is the most meaningful, wide-ranging and consistent reform in the political-administrative system in Israel since the 1980s, with major implications for policy-making and policy analyses (Galnoor, 2015). Privatisation can be understood as the redefinition of the responsibilities of the state, by shifting the public sector boundaries, in one or more of the following elements: transferring assets, goods and services from the management or the financing of state organisations to profit or to non-profit organisations through the transfer of ownership (for example, selling a government corporation); cancelling or decreasing financing from the state budget (for example, institutions of higher education); cancelling supervision over selling a product (for example, foreign currency); or changing regulation practices (for example, cell phone regulation) (Galnoor et al, 2015). Without opening here the broad (and rather ideological) discussion on whether functions of the state should be privatised, several cases in Israel have raised the question of whether privatisation has in effect begun to cede significant areas of inherently governmental functions, including policymaking and implementation, to non-governmental bodies with inadequate or nonexistent government oversight. The first example is the attempt to privatise a prison in Israel in the 2000s.4 Prisons in Israel operate within the framework of the Ministry of Interior Security, and prison workers – like police officers – are civil servants subject to ministerial responsibility. In 2004, the Ministry of Finance initiated a legislative amendment aimed at establishing a pilot private prison. The Israeli variant of prison privatisation proposed by the government was among the most complete in ceding state authority to a private business company including financing, planning, building and management – a model copied from the prison system in Texas in the United States. The government proposed several potential benefits to privatisation, including the improvement of prisoners’ conditions along with budgetary savings. The pilot was legislated by the Knesset, but it was challenged by a petition to the Supreme Court in which the petitioners claimed that even if the government’s positive expectations were fulfilled, the prison system is a 44

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special public good which must remain under the complete responsibility and governance of the state (Galnoor, 2015). In 2009, the Supreme Court of Israel made a precedent-setting decision by ruling that a private prison in Israel was illegal, thus positing that the imprisonment of citizens and the protection of their rights is the responsibility of the state. In essence, much like the public good of collecting taxes and running a court system, it would simply not be possible to write out a contract that would completely detail how privatised prison workers must operate in each situation that would arise. Privatisation of this sort could potentially lead to an undesirable influence of financial interests over decisions of citizens’ rights. The Supreme Court’s decision clarified that a main concern regarding the potential implications of the privatisation would be ceding policy decisions on preserving prisoners’ rights – a sensitive state function – to for-profit companies. The profit motive of these businesses would potentially clash with the public’s interest of taking responsibility for prisoners who are inherently vulnerable and marginalised members of society. Beyond the specific details of this case, what could be the impact of the Supreme Court decision on policy analysis in Israel and perhaps elsewhere? First of all, it requires a much wider vista of state responsibility than mere economic cost– benefit calculations. When scholars who opposed prison privatisation warned against the emergence of private ‘prison industry’ (Timor, 2006) the predictions of deregulation, reduced supervision and longer prison terms seemed entirely imaginary. The so-called ‘kids for cash’ scandal that erupted later in a Pennsylvania county in the USA showed the dangerous outcome of the prison privatisation policy. Juvenile offenders were punished for minor offences with incarceration rather than community service or suspended sentences to provide ‘customers’ to the private prisons (Ecenbarger, 2009). Eventually two judges were sent to prison for receiving bribes for their good services from the private prisons companies. Second, the lesson from this case is that privatisation does change the method of structuring the relevant information for policy analysis and limits the scope of the choices for policy makers (Gill and Saunders, 1992). When the overriding assumption is that governments do not know how to manage and therefore the first (and sometimes only) choice is to contract out, there is no more room for public policy analysis. In Israel, the Supreme Court ruling led to the specific act of closing the door to prison privatisation. At the same time, this ruling led to the more general act of opening a new door for facilitating the discernment of overarching principles that determine whether or not an inherently governmental function is suitable for privatisation.. Moreover, even though the Supreme Court decision by definition could not create a general policy for other areas, it established a precedent that the burden of proof for the economic and social worthiness of privatisation rests on the shoulders of the state. The second example of testing the boundaries of the state was a tender in 2011 for an international consultant firm to prepare Israel’s socio-economic strategic plan. This example raises fundamental questions regarding policy analysis and policy-making. Vigoda-Gadot and Cohen (2011) describe this tender as the 45

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‘privatisation of policy-making’, and ask whether the privatisation of the process of developing strategic plans and thus formulating or even determining policy is in fact ‘one step too far’. In addition to the general influence of business practices on the public sector in advanced democracies within the framework of the New Public Management, Hood and Jackson (1991) coined the term ‘consultocracy’ to describe the increased power of external management consultants over democratic governmental systems and decision-making. In other words, there has been an increased reliance on private consulting companies for the purpose of receiving advice – and often guidance as well – on public policy-making and implementation. In the abovementioned tender Israel’s government has joined other countries in embracing this approach. The use of international consulting firms is not a new phenomenon in the Israeli public sector. For example, in 1988, the Israeli government adopted a ‘Master Privatisation Plan’ which was developed by ‘First Boston Bank’, an American investment bank. This plan suggested criteria and techniques for privatising governmental corporations. In just a few years, this plan served as a basis for the privatisation of 25 governmental corporations, including some of the largest and most prominent companies in the Israeli economy (for additional examples of the extensive involvement by international consulting companies see Deloitte and Touche, 2001). In March 2011 the Prime Minister’s Office published a tender for the sum of NIS 3.5 million requesting consulting services for the development of the state of Israel’s socio-economic strategy (Ben Simhon-Peleg, 2011). The tender by definition limited the potential applicants to international consulting companies by establishing the requirement of prior experience of consulting to a foreign government or an international state corporation or entity like the European Union. The ‘Rand Corporation’ won this tender, and is expected to develop a two-pronged long-term plan: first, to improve the processes of strategic economic planning with a particular focus on increasing long-term planning capacities; and second, to assess the strengths, weaknesses, threats and opportunities that face the Israeli economy in the 15 years to come (Vigoda-Gadot and Cohen, 2011, 8). The decision to ‘privatise’ such high-priority domestic tasks can be seen as a move to overcome internal and external criticism of the lack of long-term thinking and strategic development in Israel compared to other advanced democracies. To be sure, there is also external pressure, such as the demands of the OECD to carry out certain reforms in order to meet minimal standards to gain membership into the organisation. However, the decision to outsource Israel’s socio-economic strategic planning raises a number of questions regarding the long-term development of public policy in Israel, including responsibility for setting the agenda, and the degree of oversight of consultants over the policies they suggest. In fact, critics of the tender have noted that it bypasses the institutional responsibilities of existing governmental bodies to supplement the strategic planning of public institutions such as the National Economic Council with the 46

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kind of uncoordinated advice sought in this tender (Vigoda-Gadot and Cohen, 2011). Likewise, the Governor of the Bank of Israel who is legally mandated to serve as an advisor to the government on economic matters was not invited to assist in this plan and has not participated in it (Hazani, 2011). The act of bypassing such central public institutions brings us full circle to the opening overview discussion of public administration in Israel, and the delineation of specific public sector organisations in Israel in Table 2.1. As in any organisational bypass action, the implications for the public sector organisation include weakened authority, lessened organisational experience, and decreased budgetary and operational capacity. Each case in which these key public sector organisations are bypassed in favour of private actors, this results in the weakening of public sector organisations at the same time that private actors are strengthened. The cases of privatisation efforts reviewed above are by no means unique in the Israeli context. An additional example is the call from the Minister of Improvement of Government Services to a number of consulting firms to propose standards of service in governmental units. Hiring international companies for preparing a strategic plan implies an orientation which will necessarily be international and global (Ben Simhon-Peleg, 2011) and there is no guarantee that the perceptions of the advisers will reflect the needs and socio-economic context of the Israeli society. It can be claimed that even with the use of international consultants on the strategic development of a project this sensitive in nature the government remains ultimately responsible for making decisions. Yet, outsourcing the public discussion of such a central governmental responsibility to private consultants is akin to outsourcing Israeli democracy with an emphasis only on the final product. This kind of privatisation of strategic advice is by no means unique in other countries as well. In response to these kinds of privatisation efforts in New Zealand, Jonathan Boston (1994) reviewed a number of key theoretical considerations about the ‘limits to contracting out’ when nations choose to purchase policy advice. Although concerns for efficiency or effectiveness are often invoked as the motivating factors behind the choice to contract out such advice, Boston reviews a range of potential pitfalls that must be considered, including the potential lack of relevant expertise and/or trust, the risk of opportunistic behaviour, and higher ‘transaction costs’ of hiring external experts. Even though this important topic has received relatively little attention by scholars in the field, a recent study of outsourcing strategic policy advice in Estonia (Raudla, 2013) is particularly informative for the Israeli case. In addition to fleshing out how the problems reviewed by Boston (1994) manifested themselves in a single case study, Raudla (2013) identified an additional problem that is highly relevant to Israeli policy analysis: the difficulty of contracting out for strategic advice in small countries, in which the potential market for actual competition is greatly reduced, thereby increasing the likelihood of opportunistic behaviour and/or lack of appropriate expertise. The Estonian case highlights another key problem that is highly relevant to the concern of building administrative capacities: contracting out for advice led to a fragmented and inconsistent reform plan that also hindered the public 47

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service’s capacity to learn from past iterations of the policy process in order to manage and lead necessary reforms. In sum, as boundaries between the governmental–public, business–private, and civil society–nonprofit sectors have shifted in recent years, there is greater need to clarify the responsibility for policy-making and implementation in contemporary democracies. Extensive privatisation can be beneficial in terms of short-term results, but can also create problems in terms of the long-term capacity of public administration to develop policy analysis writ large. It could hinder the development of internal policy-making mechanisms, and is therefore likely to leave the public sector lacking in terms of the skills, experience, and the capacity to carry out this work on its own. In the examples above the state has evaded its responsibility for core areas of its activity under the pretence of being merely assisted by others or by experts, while retaining the final say for the outcomes. States that do not perform such inherently governmental functions cannot regulate them well, simply because the public interest is gradually removed from the policy-making equation.

Conclusion In comparison to the unusually strong state-centred model regarding the responsibility for policy analysis and implementation at the founding of the state, it can be argued that Israel is now more similar to other advanced democracies in the more balanced roles of different sectors. The presumption that policy is set and carried out only by official public authorities is no longer valid, when in practice many organisations in all three sectors carry out complicated policyrelated activities. However, Israel still lacks the policy-making capacities that would accompany an effective civil service with a clear division of responsibilities between the political and administrative echelons. It is not incidental that the review of policy analysis evolution in this chapter paid close attention to recent cases of privatisation. In many ways, the shift of governmental responsibility and activity to the private sector – to both business and nongovernmental organisations – is the main way in which policy analysis has evolved in Israel in recent years. Israel is on par with other advanced democracies regarding increased privatisation since the mid-1980s. However the Van Leer research project cited above shows that privatisation has been a consistent policy, regardless of which party has been in power, even in the absence of any evaluation of the results of this policy. Moreover, the process of privatisation in Israel was rapid without complementary steps to strengthen regulatory governance in order to guard the public interest. The resulting ‘regulatory deficit’ is likely to harm the Israeli government’s policy-making capacity to advance the welfare of its citizens (Levi-Faur et al, 2015). While reforms instituted in most western democracies since the 1990s have emphasised the effective management of public institutions as an integral part of administrative capacity-building (Fukuyama, 2004, 122), attempts at overall 48

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reform in public administration have not yet succeeded in Israel (Galnoor, 2011; Galnoor et al, 1999). We therefore conclude by proposing a number of reforms that would strengthen the capacity of the state in conducting policy analysis and implementation. Past failures at civil service reform have led to a vicious circle of doubts regarding the feasibility of broad reform: an unstable political system leads to controversial political decisions, causing frequent changes of ministers and directors general, which in turn contribute to lowered standards and diminished public trust in politicians and administrators, alike. With the backdrop of increased privatisation, this vicious circle leads to an erosion of administrative capacities. The first prerequisite for implementing civil service reform would be the creation of an agency within the executive branch that would be granted the authority to launch and sustain reform for a significant period of time – at least ten years. We suggest the establishment of a Public Administration Department headed by a minister with extensive authority over the civil service and public sector reforms. Restructuring the civil service to build administrative and policymaking capacities would entail four key elements: 1 legislation: enacting a ‘Basic Law: Civil Service’ in order to constitutionally anchor the civil service in the executive branch, and to integrate existing laws and fill in gaps where necessary; 2 structural changes: redefining the basic structure and ministerial responsibilities in the executive branch, in government ministries, in statutory authorities, and in government corporations. The reforms would create autonomous executive agencies, and set clear guidelines for regulation and deregulation; 3 deregulation of authority: decentralising the current structure by delegating authority from the Finance Ministry divisions to other ministries, and from these ministries to executive agencies and local authorities; 4 budgeting: ending the Budget Division’s monopoly over the budgeting process to increase transparency in all stages of the process, foster discussion about the alternative options for socioeconomic policies, ensure the professional contribution of the ministries, and abolish the arrangements law. Considering the changing role of the Finance Ministry in Israel over time, it comes as no surprise that two of the elements reviewed above (deregulation of authority and budgeting) are directly related to balancing the growing power of the Finance Ministry with other administrative capacities of the state. Delegating authority would arguably reduce wasted resources by producing sounder ministerial planning, and increasing incentives for creative and effective policy making and public management. Structural reform in the budgeting process as suggested above would reform the processes and tasks related to the budgeting process, as well as the public perception of lack of transparency and democratic accountability in the budgeting process.

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A necessary step in carrying out these structural changes to build administrative and policy-making capacities will be to redefine the civil service itself, and transform ministries into professional policy units. Central to the success of this transition would be the creation of a cadre of senior civil servants as a professional corps that would include the directors general, and the directors of statutory authorities and the echelons below them. The training and development of this kind of an elite corps of public administrators would break the current departmentalisation within the civil service and increased general administrative and policy-making capacities. In an era where the sharp distinction between public and private management has come to a close, the collaboration between sectors described by Donahue and Zeckhauser as ‘collaborative governance’ (2011) requires advanced training and ongoing professional development of civil servants throughout the public sector. In the face of increased privatisation in Israel in recent years, however, this kind of broad proposal for public sector reform has become a necessity for building the policy capacity of the state. Notes 1 2

This section is based on Galnoor (2011). The claim was presented by the Human Rights Clinic of the Academic Center for Law and Business of Ramat Gan in the High Court of Justice claim 2605/05, Academic Center of Law and Business and others versus the Minister of Finance and others.

References Barkai, H, 1964, The public, Histadrut, and private sectors in the Israeli economy [in Hebrew], Jerusalem: Falk Institute Ben Simhon-Peleg, S, 2011, Outsourcing of the State of Israel, The Marker [in Hebrew], 28 April Ben-David, D (ed), 2011, State of the nation report: Society, economy and policy in Israel, 2010, Jerusalem: Taub Center for Social Policy Studies in Israel Berry, JM, Wilcox, C, 2007, The interest group society, London: Longman Boston, J, 1994, Purchasing policy advice: The limits to contracting out, Governance 7, 1, 1–30 Deloitte and Touche, 2001, Survey report on international electric sector reform, Jerusalem: State of Israel, Inter-Ministerial Steering Committee on Electric Sector Reform Donahue, JD, Zeckhauser, R, 2011, Collaborative governance: Private roles for public goals in turbulent times, Princeton, NJ: Princeton University Press Ecenbarger, W, 2009, Luzerne’s Youth Court scandal: How? Why?, The Philadelphia Inquirer, 25 October Fukuyama, F, 2004, State-building: Governance and world order in the twenty-first century, Ithaca, NY: Cornell University Press Galnoor, I, 2011, Public management in Israel: Development, structure, functions, and reforms, NY: Routledge

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Galnoor, I, 2015, Privatization policy: Who bears the burden of proof?, in I Galnoor, A Paz-Fuchs, N Zion (eds) Policy of privatization in Israel: National responsibility and the borders between public and private [in Hebrew], Jerusalem: Van Leer (an English version to be published by Palgrave, New York in 2016) Galnoor, I, Blander, D, 2013, The political system in Israel, Jerusalem: Am Oved and Israeli Democracy Institute Galnoor, I, Paz-Fuchs, A, 2015, Conclusion: Privatization policy in Israel, in I Galnoor, A Paz-Fuchs, N Zion (eds) Policy of privatization in Israel: National responsibility and the borders between public and private [in Hebrew], Jerusalem: Van Leer (an English version to be published by Palgrave, New York in 2016) Galnoor, I, Rosenbloom, D, Yaroni, A, 1999, Reform in governmental administration in Israel, in D Nachmias, G Menahem (eds) Public Policy in Israel [in Hebrew], pp 117–57, Jerusalem: The Israel Institute for Democracy Galnoor, I, Paz-Fuchs, A, Zion, N, 2015, Introduction, in I Galnoor, A PazFuchs, N Zion (eds) Policy of privatization in Israel: National responsibility and the borders between public and private [in Hebrew], Jerusalem: Van Leer (an English version to be published by Palgrave, New York in 2016) Gidron, B, Bar, M, Katz, H, 2004, The Israeli third sector: Between welfare state and civil society, New York: Kluwer Academic/Plenum Publishers Gill, JI, Saunders, L, 1992, Toward a definition of policy analysis, New Directions for Institutional Research 76, 5–13 Hazani, G, 2011, The strategic economic suggestion to the government: To give up on double advice, Calcalist [in Hebrew], 27 March Hermann, T, 1996, Do they have a chance? Protest and political structure of opportunities in Israel, Israel Studies, 1, 144–70 Hermann, T, 2002, The sour taste of success: The Israeli peace movement, 1967–1998, in B Gidron, SN Katz, Y Hasenfeld (eds) Mobilizing for peace, pp 94–129, Oxford: Oxford University Press Hermann, T, Atmor, N, Heller, E, Lebel, Y, 2012, The Israeli democracy index, Jerusalem: Israeli Democracy Institute Hood, C, Jackson, M, 1991, Administrative argument, Dartmouth: Aldershot Howlett, M, Wellstead, AM, 2011, Policy analysts in the bureaucracy revisited: The nature of professional policy work in contemporary government, Policy & Politics 39, 4, 613–33 Kabalo, P, 2006, Constructing civil society: Citizen associations in Israel in the 1950s, Nonprofit and Voluntary Sector Quarterly 35, 161–82 Levi-Faur, D, Gidron, N, Moshel, S, 2015, The regulatory deficit of the privatization era: Towards regulatory reform in Israel, in I Galnoor, A Paz-Fuchs, N Zion (eds) Policy of privatization in Israel: National responsibility and the borders between public and private [in Hebrew], Jerusalem: Van Leer (an English version to be published by Palgrave, New York in 2016) Nachmias, D, Sened, I, 1999, Reform in governmental administration in Israel, in D Nachmias, G Menahem (eds) Public Policy in Israel [in Hebrew], pp 11–34, Jerusalem: The Israel Institute for Democracy 51

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Oser, J, 2010, Between atomistic and participatory democracy, Nonprofit and Voluntary Sector Quarterly 39, 3, 429–59 Raudla, R, 2013, Pitfalls of contracting for policy advice: Preparing performance budgeting reform in Estonia. Governance 26, 4, 605–29 Salamon, LM, 1994, The rise of the nonprofit sector, Foreign Affairs, 73, 4, 109–22 Silber, I, Rosenhek, Z, 2000, The historical development of the Israeli third sector, Beer Sheva: Ben Gurion University Timor, U, 2006, Privatization of prisons in Israel, Israel Law Review 39, 81–104 Vigoda-Gadot, E, Cohen, H, 2011, Privatizing policy formation: One step too far? [in Hebrew], Jerusalem: The Center for Social Justice, Van-Leer institute Yishai, Y, 1991, Land of paradoxes: Interest politics in Israel, Albany, NY: New York Press Yishai, Y, 2003, Civil society in Israel [in Hebrew], Jerusalem: Carmel Publishing

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Part Two Policy analysis by the executive and the legislature

THREE

Policy analysis in Israel’s central government: latest developments and challenges ahead Gal Alon

Abstract Recent years have seen a sharp increase in the number of policy professionals serving in the Israeli government. The sixth floor of the Prime Minister’s Office accommodates more than 30 employees working in policy units, crafting government strategies and providing professional analyses. New policy planning departments are being set up all across government following new incentives and regulations introduced by the Civil Service Commission. Since 2006, ministries have been presenting their annual performance plans and the requirement for outcome and output indicators was recently adopted by the Budget Department at the Ministry of Finance. This chapter explores the current state of affairs on the Israeli government’s road to improving its performance. It presents the current policy structure of the PMO before delving into the actions taken across government between 2006 and 2012. Reforms were designed both to create an infrastructure for policy analysis and to establish routines for policy planning. However, it is unclear whether the Israeli government moved to a culture of performance management or created performance bureaucracy, as there is no systematic measurement of the reforms’ outcomes. The chapter sets two challenges that lie ahead: the need for greater incentives to use professional policy inputs and the necessity of professional training to keep policy units effective and influential.

Introduction The Israeli public service was modelled after its British predecessor. But whereas Britain and several other OECD countries have been through several structural reforms (see, for example, the Ibbs Report [HMSO, 1998]), until recently, Israel paid little attention to the way its public service functioned. In the US, an executive order issued in the 1970s led to the appointment of Under Secretaries for Policy Planning and Evaluation in most federal departments. At the same time, in Britain, the first central Policy Unit was set up at 10 Downing Street by Prime Minister

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Edward Heath. Similar reforms intended to improve government capacity to deliver better outcomes have been instituted in several other OECD countries. In Israel, there have been three major attempts to pursue structural reforms in government, all of them ending with marginal, incremental changes. The first of these was the Kubersky Report published in 1989. Headed by a former director-general of the Ministry of Interior, the Committee sought to devolve authority to ministries, strengthen their capacity for policy analysis, design and delivery, and simplify internal bureaucracy (Kubersky Report, Government of Israel, 1989; Galnoor, 2011). It recommended setting up units in each ministry to focus on policy and evaluation and to create a central unit for policy analysis under the Government Secretariat. Four years later, the cabinet approved its recommendations ‘in principle’ (Government Resolution 1240, 1990), but most of the practical recommendations were shelved for almost three decades. The second attempt to introduce significant reform in central government was in 1995. State Civil Commissioner Itzhak Galnoor devolved elementary managerial authorities to several ministries, assuming that authority would help them deliver their outcomes. It was argued that the inability of ministries to manage their own staff (recruit employees, promote them, and define their roles and responsibilities), was preventing directors-general from managing change and delivering outcomes. How can ministries lead contested policy reforms when they have no authority to prioritise their budgets or change job titles of their employees? Policy analysis should eventually lead to action, but action requires authority. The hopes for a new era faded as Galnoor’s successor reversed the reforms several years later. The latest attempt to reform the public service was in 2001. A newly appointed taskforce for Civil Service Reforms set up in the Prime Minister’s Office published a series of proposals – to be consigned to the State Archives only a few months later. The founding principles were similar to Kubersky and Galnoor: devolving authority to ministries, strengthening their internal capacity for policy analysis, and helping them deliver. However, with the early fall of Ehud Barak’s administration, these efforts were also shelved. While western governments were trying to reinvent government following the pioneering thinking of Osborne and Gaebler in 1992, Israeli executives could barely revise their employees’ job titles. Remarkably, all three reforms targeted a similar weakness in the Israeli government. Ministries were preoccupied with micro-management of resources, instead of designing and evaluating policies. They had limited authority to make decisions on appropriation or regulation and had almost no professional capacity for policy analysis, policy design and policy delivery. There was rarely a policy unit that tracked outcomes, analysed data, evaluated programmes and facilitated change. It was not research that was lacking, but a culture of synthesising data and inputs from various sources into a coherent policy proposal, and making informed decisions on appropriation and regulation. The lack of policy capacity in central government emphasised the dominancy of the Budget Department, the Accountant General, the Legal Advice Unit and 56

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the Civil Service Commission in setting priorities and making policy tradeoffs. All four internal regulators (often defined as ‘the Quartet’) have powers vested in them by Parliament. Thus, not only the Accountant General approval was required for every significant joint venture ministries initiated (such as ‘Birthright’ that funds a free trip to Israel for young Jewish people), but it was also needed for ridiculously insignificant transactions (such as a $100 gift to retired officials). Fears from corruption turned the legal advisors into a dominant power in approving funding criteria, so that even the Prime Minister could not allocate funds to exceptional proposals of cities. The latest effort to improve the way government functions began in 2006 with a low profile low expectations approach, and virtually no committees. Unlike previous efforts, the first goal was to strengthen the ministries from within, not to weaken the internal regulators at the Ministry of Finance or the Ministry of Justice. Changing the balance of power by reinforcing the spending ministries was defined by former Prime Minister Ehud Olmert as a key element for success (2007). The strategy designed by his Director-General Raanan Dinur, Head of Policy Planning Department Ehud Prawer, and the author focused on building capacities, establishing routines and providing incentives. Instead of a ‘top down’ approach, it created a ‘bottom up’ infrastructure for planning and evaluation. Policy planning and policy analysis are related but not identical. The efforts to bridge the gap between the two can be seen in various governments, but the methods and language used by policy units are still different to those used in Mintrom and Williams’ definition of policy analysis (2012). In the US, the Government Performance and Results Act (GPRA) of 1993 makes no mention of ‘policy analysis’ or ‘alternative approaches’, nor does the GPRA Modernisation Act of 2010. In the UK, the ‘Strategy Survival Guide’ published by the Prime Minister’s Strategy Unit in 2004 relies heavily on research and analysis, but major emphasis is on outcomes and effectiveness. The methods developed by OECD countries are also outcome-based (2007). The Israeli case followed its international counterparts, and not the academic narrative as taught in the Israeli public policy schools. Box 3.1 presents the guiding principles and the building blocks of the reform that has been implemented by the PMO since 2006. The effort was directed at ‘leveraging government’s capacity to define and achieve its goals, as part of deliverable reform of planning, management, execution, and monitoring’ (PMO, 2008). Although policy analysis was not stated as an objective, the ability of ministries to define outcomes, explore alternatives, gather data, and decide on trade-offs was almost equivalent. Back in 2006, the Israeli government did not even know how many children at risk received state support, how many classrooms should be built or what training is currently needed in the labour market.

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Box 3.1: Parts of the internal guidelines written and revised in the PMO from 2007–09 Goals and tasks: Reforming the Israeli government

(Version No 9, dated 17 March 2008) Goal: To leverage government’s capacity to define and achieve its goals, as part of deliverable reform of planning, management, execution, and monitoring. The Ministry will be at the centre of this reform. Strategy: Creating a balanced package of shifts in the allocation of authority, scopes of responsibility, and work routines, leading to fundamental reform in the performance of the Ministry and the functioning of Government.The package will include gradual changes to strengthen capacities, institutionalise procedures, and create incentives, backed by binding government resolutions and parliamentary legislation. Major shifts: •

•

•

Strengthening the Head: creating incentives and building capacities for outcomebased policy making; creating incentives and building capacities for monitoring outcomes, while pursuing self-evaluation of policies; adjusting budgeting procedures and budget structure to the concepts of planning and evaluation. Strengthening the Body: expanding Ministry authority by devolving significant powers from the Civil Service Commission, Budget Department, and the Accountant-General; improving the quality of new government employees by changing the recruitment, promotion and compensation procedures. Strengthening the Legs: transferring most of the operational activities to independent executive agencies.

Key objectives: 1 2 3 4 5

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Authority and responsibility: expanding the authority and responsibility of the Ministry’s Director-General. Planning: building policy capacity, planning procedures and an evaluation framework in central government. Budgeting: adjusting budgeting procedures to support planning and evaluation, while reflecting national priorities. Monitoring: strengthening procedures of monitoring implementation, while shifting the focus from resources to outputs. Execution: moving government units to an evaluated, outcome-based framework of executive agencies.

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Before describing the transformation in the ministries, further elaboration on the new structure within the Prime Minister’s Office is required. Clearly, the PMO’s capacities were an essential prerequisite for changing government as a whole. To create a solid ‘backbone’, one policy unit was re-created, one policy council was founded, and the entire structure and methods were redesigned. As of today, three policy units and two policy councils operate in the Israeli PMO. Three of them report to the Director-General (Department of Society and Government, Department of Interior and Development, and the Department of Economics and Infrastructure) and two report directly to the Prime Minister (the National Economic Council set up in 2006 and the National Security Council set up in 1999). During the Olmert administration, the number of employees in these policy units tripled. The transformation was not welcomed by all. The new reality sparked a fierce battle between the Prime Minister’s Office and the Ministry of Finance. In 2008, the Director of the Budget Department refused to send his staff to meetings at the PMO, arguing that decisions on appropriation can only be made at the MOF. At the same time, the newly established NEC issued a paper that sought to revolutionise the way budget decisions are made. Notably, policy units at the PMO approved their policy recommendations directly in government – sometimes against the will of the MOF. The ability of the PM policy units to provide quality analysis of policies, compare alternatives, and recommend changes in appropriation or regulation exposed the weakness of other government departments, which rarely had such capacities.

Figure 3.1: Policy units and councils in the Prime Minister’s Office in 2012

The Prime Minister National Security Council (NSC)

Department of Society and Government

Director-General (DG)

Department of Interior and Development

National Economic Council (NEC)

Department of Economy and Infrastructure

There are various differences between the units and the councils (see Figure 3.1). The NEC and the NSC are more independent in nature (the Head of the NEC is also the Prime Minister’s Economic Advisor, and the NSC’s status is enshrined in law). Both Councils also have a relatively high number of academics on their staff. Practically, they are more likely to focus on long-term challenges and their occupation with the daily management of government is limited. There has 59

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been a long debate in Israel over the impact – or lack of impact – the NSC has on policy making (Arad and Harel, 2012; Eiland et al, 2011). As for the NEC, a professional committee found that its ‘long-term advice is not sufficiently integrated into the government’s work plans’ (PMO, 2012, 16). The three policy units are monitored by the Director-General and coordinate several government resolutions every month – but they lack the academic rigour of the NEC. There is no official borderline between the units and the two councils, although the units are more involved in the short-term management of ministries’ resources, and each has a list of ministries which it handles. Their methods of operation echo the UK Prime Minister’s Strategy Unit (2004) and the Delivery Unit (Barber, 2008). Whereas the narrative of policy analysis involves problem definition, policy alternatives and selection criteria – the units’ strategic work places greater emphasis on outcomes, effectiveness and efficiency. The tension between the two narratives translates into tension between the various units. The new structure of the PMO was a first step to create greater capacity for policy analysis in the ministries. Notably, the Israeli public administration has neither a mission statement nor a written vision. Whereas the ‘Basic Law: Government’ (dating back to 1968) defines the role of the executive branch as a political vehicle, the Civil Service laws are occupied mostly with appointments, discipline and procedures. The words ‘vision’, ‘goals’, ‘roles’ and ‘mission’ are also absent from the Internal Regulation File (the ‘Takshir’). A conceptual framework of the civil service’s goals has never been created. Government is the greatest vehicle invented for collective action. Citizens forego some of their liberties and contribute production to a common pool of resources managed by the civil service to achieve these goals. Policy making can thus be seen as the profession that bridges the gap between election pledges (defined in outcomes) and government production (defined in outputs and reflected in resources). Minimising the gap between outcomes defined and outcomes delivered can be seen as the goal of government. Holding government accountable for effectiveness by measuring the ‘outcome gap’ turns the civil service into a vehicle for public change. Reducing the outcome gap was officially defined by the PMO as its goal. From a point in which almost none of the ministries could set measurable outcomes, today almost all of them prepare and publish annual performance plans and around half have functioning policy units (see Figures 3.2 and 3.3, prepared by Roei Dror of the Prime Minister’s Office). The roles of these units vary between ministries, but their horizontal responsibility for preparing the ministries’ plans gives them influence in decision making. Mintrom and Williams defined policy analysis as ‘work intended to advance knowledge of the causes of public problems, alternative approaches to addressing them, the likely impact of those alternatives, and trade-offs that might emerge when considering appropriate governmental responses to those public problems’ (2012, 4). Considering the tension between pure policy analysis as produced in academic departments and the daily pressures

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Figure 3.2: Outputs of policy units in ministries today

Prepared assessments

Have a policy unit

Submitted a plan

0

5

10

15 Yes

20

25

30

No

Source: Roei Dror of the Prime Minister’s Office

Figure 3.3: Number of policy units in ministries 2006-14 25 20 15 10 5 0 Before 2006

2006

2007

2008

2009

2010

2011

2012

2013

2014

Planned

Policy Units Source: Roei Dror of the Prime Minister’s Office

of drawing up action plans, policy units are fighting to find a middle way. They look for ‘what works’, spur innovation, integrate research and data into decisions but rarely rank theoretical alternatives. The change occurred first at the PMO itself. Back in 2006, the PMO planned a $1 billion plan to ‘Strengthen the North’. However, the plan was based on no data, no predefined outcomes and no delivery plan. Political pressures from mayors to receive funding ended up with dozens of cities getting insignificant amounts. Hundreds of millions of shekels were spent without any evidence of ‘what works’. Years later, principles of inclusive policy making were adopted to 61

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design policies for holocaust survivors, ‘Welfare to Work’ reforms and a national Programme for Children at Risk. All of these reforms were based on data and analysis, as well as collaborative mechanisms. The Programme for Children at Risk entailed pre-defined mechanisms for defining and evaluating outcomes. This rarely happened before. Having said that, most of the existing government programmes are yet to be modified, and there is no systematic evaluation of the overall progress made in data-driven policy making. Nevertheless, the request for outcome and output measurements has become a common practice among civil service professionals. The Ministry of Welfare and Social Services expanded its ‘performance venture’, inviting social workers to proudly show what works (and what doesn’t). The Ministry of Economy has started to measure the effectiveness of its employment programmes in the Arab and Ultra-Orthodox sector. Policy units are constantly asked to lead cross-governmental reforms in the fields of environment, education, health and economics. The difficulties of modifying the language and culture of government required new routines, innovative methods, greater capacities and clear incentives. In order to track the changes made in the Israeli central government, there is a need to differentiate between the four. The central government currently has written methods for policy planning and evaluation; it draws on two sources of capacity to manage the task (internal policy units and licensed consulting firms); and it follows two annual routines that require continuous analysis and evaluation. As the years passed by, there was, however, a lack of incentives for professional policy making: apart from sympathy and professional support, there were no real public or financial rewards for cutting ineffective expenditures and focusing on what works. The Israeli experience shows that changing the way government works requires a ‘soft power’ paradigm rather than an authoritarian one. Ministries were not obliged to opt in the new reform, but they realised the advantages of doing so. Under such circumstances, the need for tangible incentives is even higher. This might explain why the ‘soft power’ paradigm has changed in recent years, as the PMO has become more of a regulator than an ally. In certain fields, such as reducing the burden of regulation, the PMO will have a dominant role in approving ministries’ plans. The consequences of this shift remain to be seen. Nevertheless, the methods, capacities, routines and (lack of) incentives stayed largely in place. The methods developed in Israel echo the US Government Performance and Results Act (GPRA) of 1993 and the ‘Strategy Survival Guide’ issued by the UK Prime Minister’s Strategy Unit in 2004. Historically, under Ariel Sharon’s administration, government ministries were required to present a list of goals and rank their delivery in a ‘traffic light’ model: red for ‘failure’, yellow for ‘in progress’, and green for ‘delivered’. There was no distinction between outcomes, outputs and processes, and no central framework of policy analysis to evaluate performance in terms of efficiency and effectiveness.

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The lack of a conceptual framework was evident in January 2007, when the directors-general of all ministries were asked for the first time to present their plans. There was not even one similar concept between the Ministry of Defence’s relocation of army camps to the Negev, the Ministry of Energy’s efforts to reduce water consumption and the Ministry of Health’s efforts to better regulate health providers. Following that experience, the need for a cross-government method and language of performance was clear, as well as the need of a national dashboard to manage government. Months later, an inter-ministerial taskforce began to draft the first Government Planning Manual (GPM). A first version, edited by the author, was published in December 2007 (PMO, 2007). The fourth version was published in 2013, edited by Dr Michal Tabibian-Mizrahi and Roei Dror. The GPM integrated several methods in one, non-binding paper. It introduced the Annual Circle of Planning (ACP) and synced it with the Annual Circle of Budgeting (ACB), so that policy analysis would feed decisions. It defined three hierarchical levels of long-term planning and differentiated between measurements of process, output and outcome. It also provided tools for strategic assessment and evaluation of spending priorities based on effectiveness (outcomes/outputs) and efficiency (outputs/resources). Methods of policy analysis were part of the resources explored for the preparation of the GRM, but they were less relevant in comparison with other methods used by the British and the American government. The basic guidelines presented at the GPM have been widely adopted and implemented across Israeli central government. As of 2014, 27 out of 29 ministries have published their annual performance plans and 14 ministries prepared a strategic assessment at the beginning of the year. The PMO invested significant effort in communicating the new language. Since 2007, the GPM has been distributed in hundreds of copies, explanatory software has been distributed to hundreds of public officials, and dozens of seminars have been held to spread the language of outcomes and outputs. Thus, when the government wanted in 2013 to shrink regulatory burden on businesses, the need for clear outcomes was enshrined in the cabinet resolution. A similar requirement was integrated into the cabinet decision to design new policy for the inclusion of the Ethiopian community in 2014. Two annual routines are widely followed by government ministries in Israel, as designed by the ministries themselves. The first routine leads to the preparation of a strategic assessment in April, before each ministry begins its budget negotiations with the Ministry of Finance. The underlying idea was to strengthen the capacity of management to think of future policies while the MOF is willing to listen. The second routine leads to the publication of an annual performance plan in December, which includes indicators and milestones for delivery. At that point, the budget is approved and delivery begins. Notably, these routines have been partially voluntary since 2006. There is no formal obligation to follow the ACP. Nevertheless, most senior managers in government have realised that taking their

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policy commitment seriously brought them benefits in their relationship with the PMO’s team. Another routine was cancelled a short time after its introduction. Whereas the ACP set up annual routines, the PMO’s team was eager to make policy analysis and evaluation compulsory by changing the way government resolutions are submitted. This reform was submitted to the Cabinet on 14 September 2008. Resolution No 4085 was approved unanimously. It required each proposal to be categorised, so that any appropriation of NIS 30 million or more would include process, output and outcome indicators. The government’s commitment to ‘inclusive, accessible and transparent’ routines of ‘planning, budgeting, evaluating and monitoring’ – was enshrined for the first time. A new template for future resolutions was adopted, along with clear definitions of the responsibilities of the Government Secretariat, the PM’s Delivery Unit, and the PM’s Planning Unit. The technical implications of the decision were incorporated in new software developed in the PMO to track cabinet performance. The system, entitled ‘Government Delivers’, was intended to enable the Prime Minister to finally manage the government. Up to that point, nobody had tracked the delivery and impact of cabinet resolutions. The lack of assessment had direct implications on the demand for data. However, this pioneering effort to monitor the delivery and effectiveness of government resolutions eventually perished after the government transition in 2009. Its only remnant was the categorisation of government resolutions, which will enable them to be better managed. The third dimension of the transformation taking place in the Israeli government has to do with capacities. As stated in the Kubersky report (Government of Israel, 1989), the Prime Minister’s Office and the ministries themselves lacked the professional capacity to define and monitor outcome measures. The language of outcomes, effectiveness and performance was still obscure for the heads of department and was rarely taught in academic departments of public policy. As concluded by the International Committee for the Evaluation of Public Policy and Administration Departments, appointed by the Israeli Council for Higher Education, ‘Israeli public affairs programmes need to do a better job preparing people with these skills’ (CHE, 2011, 7). The lack of trained staff to work closely within top decision makers and spread the methods of performance management and policy analysis has inhibited progress for many years. There were two alternatives for capacity building in government: establishing policy units with professional staff (as historically recommended in the Kubersky report) or hiring external consultants. Both routes were taken in 2008, though the latter materialised much quicker than the former, triggering justified concerns of privatised policy making (Paz-Fuchs and Bensimhon-Peleg, 2014). In only a few months, the Government Procurement Administration (GPA) had published a central competitive bidding for consulting firms, which provided bureaucratic and financial incentives for ministries willing to lead the change (GPA, 2008). As for the policy units, three years were to pass before the Civil Service Commission (CSC) published new guidelines and job descriptions for policy units across 64

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government (CSC, 2011). Bureaucratic assistance to bypass normal regulations of procurement and hiring was a resounding success. Today, half of the ministries have policy units and many others hire consulting firms to support their policy planning and analysis work. The integration of methods, capacities and routines enabled the PMO to prepare the first delivery report of the Israeli government in mid-2009. The figures showed that ministries achieved around three fourths of their key milestones and outputs – even though some milestones were achieved only after significant delays and others were far from ambitious. This was at once surprising and encouraging: surprising, since many feared the figures would be much worse; encouraging, since there was finally a basis for analysis and improvement. The very existence of milestones, outputs and outcomes opened the way for new analytical capacities within ministries and between them. The new measures affected directly and indirectly a variety of spending programmes. In light of a massive relocation of army camps to the Negev, the Ministry for the Development of the Negev and Galilee was leading a crossgovernmental policy-making process to fulfil the regional growth potential. Several policy units were involved in the process, and a consulting firm was hired to analyse data and make recommendations. The plan was integrated in the planning routines of various ministries and presented with clear measurements. The Programme for Children at Risk was required to report its outcomes on a regular basis and built a national database for community programmes and children’s progress. The integration of measurements among welfare providers was reinforced by the work done by the policy unit at the Ministry for Social Services. At some point, the GPM was adopted by the Budget Department at the Ministry of Finance, which asked its staff to propose outcomes to any proposal they make. This is first and foremost a cultural change. While progress is certainly made, it is unclear whether the new outputs translate to real outcomes. The effort to build an infrastructure for performance management needs to be subject to the same analysis and evaluation as any other investment in government. However, the failure of the PMO track its own performance (State Comptroller, 2015) makes it difficult to assess the impact of the reforms and find ways to make them work better. The amount of data collected and presented is indeed rising, but it is unclear whether decisions have been changed following the resources invested in planning. As there is no measurement of the change in government outcomes, assessing the effectiveness of the new infrastructure is almost impossible. Notably, such a framework is also missing in other OECD countries developing similar concepts. In light of these changes, there are two challenges facing the Israeli government. The first concerns incentives provided to ministries in order to make decisions based on rigorous analysis. Directors-general who invest resources in improving their policy performance benefited from the sympathy and support of the PMO – but were granted no powers to manage their own resources. As evident from 65

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Box 3.1 (see p 58), the devolution of managerial powers was the undelivered element in the 2006–09 reforms. One might argue that ministries must invest in policy analysis regardless of their ability to use the outputs of the analysis, but this does not correspond with the reality of government. Policy capacity and managerial capacity cannot be separated from each other. In recent years, the plethora of procedures required to approve any appropriation and regulation has become a major barrier for change. Investment in policy analysis is rendered useless when decisions are taken by internal regulators who have the de facto ability to change policy recommendations or even ignore them, no matter how much analysis was done. Internal regulation was rightly set up to guarantee an impartial public service. It was never meant to leave ministries with no authority to hire, reward or dismiss employees, to reallocate their existing budgets, or to make decisions as part of their procurement procedures. The 2008 PMO document defined four internal regulators with powers essential to enable ministries to fulfil their public responsibilities, but little has so far changed: • the Budget Department at the MOF still has to approve every transfer of funds between thousands of budget items; • the Accountant-General in the MOF still has to approve every procurement transaction, especially those not open for public bidding; • the Legal Department still has to approve any new criteria for appropriation or any new regulation proposed by the Ministry; • the Civil Service Commission still manages the ministry’s hiring procedures and approves every promotion or structural change. The lack of coherency between public responsibilities and formal authorities has been repeatedly mentioned as a key barrier to more effective management in the Israeli public services (Shapira, 2001; Ben Bassat and Dahan, 2006; Olmert, 2007; NEC, 2009; Galnoor, 2011). Since effective management requires better policy analysis, one can assume that greater responsibilities will trigger ministries to invest more time and resources in improving their decision-making processes. In 2011, the Trachtenberg Committee for Social and Economic Change recommended the appointment of two reform committees to consider the delegation of powers to ministries. In June 2013, both reports were submitted and approved by the cabinet (Resolutions 481 and 482). Their implementation is underway. Incentives can also propagate from the public. Senior decision makers in government need courage to define what government should be doing with its limited resources – and what it should not. The output of policy analysis often requires them to make tough decisions that levy certain costs on a specific group. By nature, when public resources and liberties are at stake, every change creates friction. Some changes have a redistributive impact, either a vertical one (redistribution between different classes or groups) or a horizontal one (redistribution between different ages or generations). Every decision has winners and losers. Professional analysis, innovative solutions and greater authority can 66

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hardly replace the courage needed to change existing allocations, ineffective or inefficient as they may be. There are very few public rewards for making tough decisions or integrating professional policy analysis into policy making. Senior officials are not assessed by the outcomes of their units; they are rarely asked to report on performance; and their employment contract has no indicators at all. Academic institutes and the press neither ask decision makers to discuss their performance nor publicly track and report it. Lack of discussion naturally reduces the need for professional policy analysis, which is seldom perceived as a necessary resource in managing a ministry. Public discussion can provide an incentive to change and reward proponents of change. This might also replace the suspicion that all too often develops into hostility towards every reform. A second challenge faced by the Israeli government is the one of training its future policy analysts. As elaborated in another chapter in this volume, government currently has dozens of training programmes operated mostly by external providers. Some of them have been changed in recent years due to their inability to support the reforms described here. The Israeli academic departments for public policy are mostly detached from government routines and challenges. As stated by a former director-general of a major government ministry, ‘In order for policy units to impact on government, they must be capable of finding solutions and not creating problems.’ There is an urgent need for a different training that integrates academic and practical skills. It needs to unite government around evidence-based, practical solutions and not only write analytical papers suggesting what should be done. This was well propounded by the international evaluation committee of public policy study programmes in Israel, headed by Steve Kelman of Harvard University. The words chosen by the International Committee evaluating Israeli academic departments for public policy reflect the challenge for the entire policy infrastructure created in government. In its report, the Committee stated that the Israeli master’s programmes ‘need a dramatic shift of emphasis away from a liberalarts approach limited to explanation and understanding to a professional one with significant elements of prescription and action’ (CHE, 2011, 7). The Committee called for a reorientation of the curriculum toward professional education, expressing their fears that ‘the problems of cynicism and blinkered viewpoints in some of the programmes’ resulted from a ‘non-professional approach’. Teaching and training are essential elements in improving policy analysis in central government. The lack of integration between strategic planning as performed in government and policy analysis as taught in universities does no good to either field. Policy units operating in ministries need policy analysis in order to produce effective solutions. Academic departments must know how government functions in order for policy analysis to be useful. The absence of government-related materials from academic curricula makes it difficult for public policy schools to understand and affect the way policy is made. The lack of academic input to government policy routines makes it difficult for government 67

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to discover what works. Teaching and training are therefore major requisites for better policy work in Israel’s central government. Recent years have seen significant progress in the quality of policy making procedures in the Israeli government. Policy units, performance plans and strategic assessments are now part of the government’s narrative. The changes described here reflect a transformation in at least three dimensions: structures, procedures and capacities. They incorporate many of the analytical components from the theory behind policy analysis; 25 years after the Kubersky report was approved by the government, some of its key recommendations have been implemented by the Prime Minister’s Office. The investment needed to build such a strategic infrastructure is considerable. It requires new employees, expensive management time and direct expenditures on consultants. Whereas outputs can be measured in the rising number of papers and plans published by government, little has been done to assess their effectiveness in terms of ministries’ outcomes. The desired impact is mainly the reduction of the outcome gap between what government plans and what it delivers. Whereas the first is heavily influenced by the collective will as reflected in elections, the latter was defined by the Prime Minister’s Office as the goal of the civil service. Another impact can be defined as the change in terms of budgets and regulations ministries decided on. The lack of clear indication of outcomes poses a major threat. The level of talent in the top echelons of Israeli government is remarkable. If senior managers do not perceive policy units as being capable of helping them perform better, they will be less likely to invest resources in supporting them and time in listening to them. If policy analysts cannot help government close the ‘outcome gap’, they will eventually be displaced in the decision-making rooms and find themselves in the back corridors. There is however a long way to go. The formal methods, capacities and routines might improve the level of policy analysis in Israel’s central government, but formality is not always associated with substantial impact. The lack of systematic evaluation leaves questions open on the effectiveness of these steps. The onus is on the PMO’s team: if the value for ministries is not significant, the entire infrastructure will slowly lose ground. Keeping the ‘bottom up’ approach, creating meaningful incentives, and re-designing the less-effective elements should enable government to enhance its policy infrastructure and gradually close the gap. References Arad, U, Harel, A, 2012, Is there a future for Israel’s National Security Council?, in BESA Perspectives 180, Tel Aviv: The Begin-Sadat Center for Strategic Studies (BESA) Barber, M, 2008, Instruction to deliver: Fighting to transform Britain’s public services, London: Methuen Publishing Ben Bassat, A, Dahan, M, 2006, The balance of power in the budgeting process, Jerusalem The Israel Democracy Institute 68

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CHE (Council for Higher Education), 2011, The committee for the evaluation of public policy and administration study programs, Jerusalem: CHE CSC (Civil Service Commission), 2011, The establishment and empowerment of policy and planning units in government ministries and government agencies, Circular 5/2011, Jerusalem: CSC, www.csc.gov.il/DataBases/Hozrim/Pages/2010-2966.aspx Eiland, G, Halevy, E, Ivry, D, 2011, Does the National Security Council have a chance in the Israeli political-security reality?, in M Elran, O Alterman, J Cornblatt (eds) The making of National Security Policy, Memorandum No 110, Tel Aviv: Institute for National Security Studies (INSS) Galnoor, I, 2011, Public management in Israel: Development, structure, functions and reform, New York: Routledge Government of Israel, 1989, Report of the Public–Professional Committee for an overall review of the civil service and other organizations supported by state budgets, Chairman: Chaim Kubersky, Jerusalem (‘Kubersky Report’), Jerusalem: Government of Israel Government of Israel, 2012, The committee for the examination of the structure of the Prime Minister’s headquarters, headed by Yosi Kucik, Jerusalem (‘Kucik Report’), Jerusalem: Government of Israel Government Secretariat, 1990, Report of the Public–Professional Committee for an overall review of the civil service and other organizations supported by state budgets (Kubersky Report) – Discussion, Decision No 1240, Approved 14 January, Jerusalem: Government Secretariat Government Secretariat, 2008, Planning, measurement and evaluation in proposals brought to government, Decision No 4085, Approved 14 September, Jerusalem: Government Secretariat Government Secretariat, 2013a, Report of the Committee to Improve Human Capital in the Civil Service, Decision No 481, Approved 30 June, Jerusalem: Government Secretariat Government Secretariat, 2013b, Adoption of the recommendation of a team to improve executive capacities of government ministries with regard to budgeting and procurement (‘Governance Committee’), Decision No 482, Approved 30 June, Jerusalem: Government Secretariat GPA (Government Procurement Administration), 2008, Tender 42/2008: Consulting services for the imitating of culture and routines of planning, monitoring and evaluation in government, Jerusalem: GPA, www.mr.gov.il/CentralTenders/ Goods/Pages/michraz10.aspx HMSO, 1988, Improving management in government: The next steps (‘Ibbs Report’), London: HMSO Mintrom, M, Williams, C, 2012, Public Policy Debate And The Rise Of Policy Analysis, in E Araral, S Fritzen, M Howlett, M Ramosh, X Wu (eds) Routledge Handbook of Public Policy, New York: Routledge, 3–16 NEC (National Economic Council), 2009, Building a state budget in Israel: Fiscal rules, the budgeting process and the Omnibus Law, Jerusalem: The Prime Minister’s Office 69

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OECD (Organization for Economic Cooperation and Development), 2007, Performance Management in OECD Countries, Paris: OECD Olmert, E, 2007, Prime Minister’s speech on reform in the functioning of government, Israel Center for Management [in Hebrew], November, Jerusalem: PMO, www.women. gov.il/NR/rdonlyres/FF5EB956-E850-4C24-B357-C506972F65DA/0/mil. pdf Osborne, D, Gaebler, T, 1992, Reinventing government: How the entrepreneurial spirit is transforming the public sector (Plume), London: Longman Paz-Fuchs, A, Bensimhon-Peleg, S, 2014, On the seam between public and private: Privatization and nationalization in Israel, Annual Report 2013, The Center for Social Justice and Democracy, Jerusalem: The Van Leer Jerusalem Institute PMO (Prime Minister’s Office), 2007, The Government’s Planning Manual, Version 1.0, Edited by Gal Alon, Jerusalem: PMO PMO (Prime Minister’s Office), 2008, Goals and tasks: Reforming the Israeli government, Version No 9, dated 17 March 2008 (Internal Document). PMO (Prime Minister’s Office), 2012, The Committee to Examine the Structure of the Prime Minister’s Bureau, Chairman: Yosi Kucik (“The Kucik Report”), Jerusalem: PMO, www.pmo.gov.il/Secretary/sederyom/Documents/900.pdf Prime Minister’s Office of Public Services Reform, 2001, Better government services: Executive Agencies in the 21st Century, London: Crown Shapira, M, 2001, Position paper: Government headquarters’ work and the way towards an efficient public sector in Israel [in Hebrew], Jerusalem: Prime Minister’s Office State Comptroller, 2008, Annual Report 58b for Year 2007 [in Hebrew], Jerusalem: State Comptroller State Comptroller, 2015, Annual Report 65c for Year 2014 [in Hebrew], Jerusalem: State Comptroller UK Prime Minister’s Strategy Unit, 2004, Strategy survival guide, London: Cabinet Office US Congress, 1993, Government Performance and Results Act of 1993 US Congress, 2010, GPRA Modernization Act of 2010

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FOUR

Local government and the challenge of policy analysis Nahum Ben-Elia This chapter aims to portray, analyse and interpret key issues of policy analysis, of local government and in local government, affecting the institutional capability for informed policy choices and responsible policy priorities and decisions. Fundamental shifts in Israeli public policy during the last decades have been reshaping the relationship between central and local government, their responsibilities and competences. The neoliberal paradigm embraced by Israeli governments since the mid-1980s and its concomitant policies have been redefining the boundaries of government, organisational modes of action and the financial basis of public institutions – among them local authorities.1 An array of explicit and tacit policies have attempted to reform local government – including spatial reorganisation (amalgamation), changes in financing and service delivery modes, and more systematic regulatory controls. Policy analysis of local government refers, here, to the conceptual and factual grounds which have shaped the central government’s strategy for change and informed its derivative policies. Policy analysis in local government focuses the attention on the analytical capabilities of local authorities to assist decision-making processes. For more than two decades Israel has witnessed the emergence of local government as the most active and entrepreneurial force in the public scene. A variety of independent and disjointed forces – political, institutional and economic – has been molding a new type of local government characterised by greater autonomy, public assertiveness and functional responsibilities. A de-facto institutional decentralisation has expanded the role of local government, transforming it into a multi-purpose entity handling a widespread range of critical services and activities. The need for well-informed local policies has increased proportionally. The discussion is set in a quadrangular perspective: policy analysis in central government, policy analysis at the border of government, external policy analysis, and local policy analysis. A selective number of concrete cases and issues allows for the identification of key challenges facing policy analysis of and in Israeli local government.

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Local government in Israel: a brief contextual introduction The municipal system Local government in Israel is a single-tier system with no regional/meso-level mediating between the central government and local authorities. It comprises 254 local authorities characterised by high heterogeneity in terms of size, geographical coverage, socio-economic level, ethnicity and organisational capabilities. Israel is the only western country that in the last three decades has enlarged the number of local authorities, a partial expression of rapid demographic growth and political considerations (for example, the 23 Jewish local authorities established in the occupied West Bank). The relative large number of local authorities fragments the national space through a geographical patchwork of municipal boundaries, lacking a convincing planning or administrative logic. The formal boundaries define political and functional enclaves of self-perceived local ‘autarkies’, with limited inclination towards inter-municipal cooperation. They are reinforced by their economic value. Because of fiscal benefits related to land-use planning and development (betterment levies, development fees and an expanded tax basis), the local space is perceived as a financial lever and as a mean for potential growth. Israeli local government is highly unequal. There are great economic disparities among local authorities, a composite result of physical characteristics (such as location, accessibility, the quality of infrastructures), level of development and fiscal strength. They mirror socio-economic fault lines within Israeli society and the spatial distribution of the population. Ethnicity plays a role as well, due to the collinearity between minority status and socio-economic level, as expressed in the relative economic status of Arabs and Druzes – two main minority groups encompassing a third of all local authorities (within the pre-1967 borders) and 20 per cent of the total population. Local authorities in Israel play a key role in the provision of local services. Based on competence and funding, these services are divided into two main categories: services characterised by shared (central–local) responsibility and funding – such as education and social welfare services, and traditional municipal services in which the local authority holds sole responsibility for their provision and funding. Due to their size and limited fiscal base, many local authorities cannot guarantee appropriate services without substantial government subsidies. Compounded by sustained management liabilities, a result of local political cycles and wanting professional expertise, a large segment of local government have faced periodical fiscal crises and required bailout assistance. Central–local relationships Central–local relationships have a dual character. On the one hand, there is a functional axis linking service-oriented ministries and local authorities. As coproducers of public services and programmes, their relationships are grounded on 72

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common interests and, in some areas, on shared professional values. On the other hand, there is a control axis patterned by Ministry of Interior and the Ministry of Finance, within a top-down model of regulation and supervision. The Ministry of Interior is legally responsible for local government, its organisation, geographical areas of jurisdiction and functional competences. It has the power to establish new local authorities as well as to initiate their dissolution (or amalgamation). A web of laws, procedures and instructions define the conditions for local authorities’ expected conduct of affairs, and compliance is supervised by means of external and internal auditing.2 Notwithstanding these powers and means, the most dominant force shaping central–local relationships is the treasury. Since the mid-1980s, the Ministry of Finance has gained disproportional power in determining the state budget and a tight control over policy and its budgetary implications as well as spending discipline (Strawczynski and Zeira, 2002; Ben-Bassat and Dahan, 2006). It has further magnified its policy steering power by means of a legislative device known as the ‘Arrangements Law’ (the ‘Economic Policy Law’ or the ‘Israeli Economic Recuperation Law’ in later version). 3 Local authorities are hardly subservient organisations, however. The uncoordinated nature of Israeli governance (that is, central government as a loose federation of ministries) and the ubiquity of political (party) considerations in public decision-making, allow for a surprising degree of local autonomy. Local government is frequently capable of neutralising, de facto, central decisions through quiet political negotiations or active parliamentary lobbying.

Policy analysis of local government: analysis from within In the last two decades central government embarked in a number of policy initiatives to reform local government structure, competences and management. Three of these attempts will serve to analyse representative patterns of policy analysis within government: the urban water reform initiated in the mid-1990s, the amalgamation of local authorities of 2003 and the Municipalities Bill initiated in the mid-2000s.

The urban water reform In 1995, the Israeli government approved a Ministry of Finance’s proposal, as part of the ‘Arrangements Law’ draft for fiscal year 1996, to transfer the responsibility for urban water and sewage services from local authorities to independent regional utilities. It set the issue of urban water and sewage services no longer in the context of standard, non-profit, municipal services but as public utilities, self-financed from rates and charges collected from its customers, and subject to public control and regulation by an independent regulator. An interorganisational commission was charged to analyse the basic issues and submit the required recommendations for the implementation of the adopted policy.4 The appointment of ad-hoc professional commissions is a typical pattern of Israeli 73

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governmental policy-making, as ministerial proposals are frequently approved in principle, without the submission of an ex-ante informed analysis of options and implications. The Commission’s final report is of particular interest because it illustrates the character and content of the underlying policy analysis. The report is an argumentative device legitimising the ex-ante policy resolution. It challenges the traditional conception of the discussed services through a neoliberal discourse in which both the substance and nature of the services are reconstructed (Water and Sewage Corporation Commission, 1997). Water is no longer a public resource but a commodity subject to the logic of a market economy. Public responsibility for delivery is trusted in the hands of dedicated utilities that as independent ‘business units’ can optimise the use of resources while opening venues for private sector collaboration. 5 Despite serious disagreements among its members, the Commission’s recommendations provided the legitimacy for translating the approved policy into legislation. In 2001, regardless of local government’s opposition, the Knesset passed the new Water and Sewerage Corporations Law. Although a comprehensive piece of legislation, the law lacked the backing of a sound policy analysis on the complexities of the implementation, a miscalculation that set the conditions for a protracted and inconsistent process. Disregarding the complexities of the corporatisation process and the need for policy learning, by means of analysis and experimentation, the reform’s implementation evolved into spastic policy efforts lacking coherence and credibility. It took a decade to bring a majority of local authorities to accept the corporatisation of water and sewage services, mostly through financial enticement and legal coercion. The outcomes, though, are messy (Ben-Elia, 2009a). The number of corporations is far larger than originally intended and at least half of them are in deficit. These ‘unexpected’ results have forced the government to initiate a new policy cycle aimed at reducing drastically the number of corporations. Once again, policy analysis plays a problematic role. Outsourced professional analysis is requested now to corroborate pre-conceived assumptions about the existence and benefits of ‘economies of scale’. Complex organisational and public issues concerning this retro engineering, appear to become ignored by simplistic, one-dimensional economic analyses.

The 2003 amalgamation reform At the turn of the century, Israel confronted a serious fiscal crisis that brought the government to emergency steps. They crystallised in 2003, in an draconian policy (‘Plan for the Recovery of the Israeli Economy ‘), aimed at downsizing the state, accelerating market liberalisation, lowering of the cost of labour and the contraction of social welfare arrangements (Bank of Israel, 2004). It set the conditions for the revitalisation of dormant initiatives, among them a major restructuring of local government through a reduction in the number of local authorities.6 The call for reform was not groundless: there were then serious questions concerning the large number of small local authorities and their relative 74

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organisational and financial capabilities to provide suitable services. An interorganisational commission entrusted some years before to analyse the issue of municipal amalgamation, has already submitted a concrete programme as well as policy recommendations concerning required minimum size for municipal accreditation (Amalgamation Commission, 1998). The proposed amalgamations encountered immediate political resistance from those threatened by the reform, forcing the Commission to dilute its original recommendation: from 50 local authorities to 20. Sensitive to the political repercussions, the Ministry of Interior procrastinated and the proposed changes entered a dormant state. From a theoretical-methodological perspective, it embraced a multi-criteria approach as a basis for amalgamation decisions.7 The recommendations, though, hardly followed the stated approach: there is no public evidence that the Commission had the required data or an operational model that could meet the methodological requirements of a multi-criteria analysis. Its proposal for spatial reorganisation of specific municipal clusters relied on urban-geographical and land-use considerations, and contextual knowledge of the relevant local authorities. No analysis was conducted, not even considered, of the potential implementation issues confronting the proposed changes. In March 2003, the Cabinet decided to reduce drastically the number of local authorities by legislative means, proposing the amalgamation of 155 local authorities (58 per cent of the total authorities at that time) into 62 new municipal clusters. The scheme was based on a policy analysis prepared by a former Ministry of Finance official by request of a governmental task force headed by the Prime Minister Office’s General Director and the General Directors of the ministries of Finance and Interior (Amalgamation Commission, 2003). The analysis, never made public, embraced nominally the principles (the criteria) of the 1998 Commission but actually disregarded them. Based solely on the most accessible data – that is, gross aggregates of current revenue and spending from current financial accounts, it was geared to show the inefficiencies of the targeted local authorities and the expected economic benefits of amalgamation. It fitted perfectly the government’s argumentation.8 Parallel to the submission of the Bill draft, the Ministry of Interior decided to appoint seven public commissions (one for each national district), which, based on public hearings and further analysis of the proposed amalgamation, were expected to provide a list of relevant local authorities for inclusion in the final legislation. The Commissions shown unexpected independence; they publicly challenged the government’s reliance on cost-savings assumptions as a rationale for amalgamation and questioned the validity of the government’s methodology.9 In sharp contrast to the original merges proposed by the government, they sustained the amalgamation of only 23 of the 155 local authorities included in the Bill. The gap between these two figures exposed the weakness of the initial policy analysis embraced by the government and its conceptual biases. Yet, the more robust analyses conducted by the regional Commission were soon to expose their own limitations – mainly their disregard for critical contextual factors affecting implementation.10 75

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The Municipalities Bill In 2007 the government placed on the Knesset’s agenda a new, and long expected, piece of legislation: the Municipalities Bill. Since the creation of the state, local government based its status and competences on the Municipal Corporations Ordinance (1933), a legacy from the British Mandate. The Ordinance was not a local adaptation of the then legal municipal system in Britain but a colonial concoction that, by virtue of practical wisdom, resulted in a highly resilient and flexible framework. Nonetheless, the evolution of Israeli local government and its increasing complexity set the conditions for a new legislation, a need compounded by periodical demands for additions and modifications of the 1933 Ordinance as a result of policy developments and administrative practices. The new Municipalities Bill was to be the answer to these need and demands. In the late 1990s, at the time of his exit, the then Ministry of Interior’s legal adviser was trusted by the Ministry to draft the new municipal bill, a task that he will share later with his successor. The first stage of this undertaking was devoted to a policy and legal analysis of contemporary developments of local government in Western countries and Israel – including central–local relationships, approaches to local autonomy and central regulation, local democracy and new modes of management. An inter-ministerial team oversaw the progress of the work. This background study was never made public. Based on personal communications by some of those who read the final report as well as on public professional references by the drafters, it seems that the study was sound and comprehensive. It provided key principles, concepts and practice modes upon which, paralleling international trends, a new legal framework could be built. The bill draft, presented for public discussion in the first half of the 2000s, seemed to have internalised these promising principles, concepts and modes. The drafters proffered the proposed legislation as a reformatory effort to promote local government autonomy, greater accountability, and transparency (Zinger and Dana, 2009). At first glimpse, the proposed Bill seems to echo political and administrative decentralisation reforms embraced by most western countries, aimed to upgrade the role and competences of local governments within a joint system of intergovernmental governance. It seems to sustain as well new modes of public management (various components of the New Public Management approach) and greater accountability. A critical reading of the Bill exposes, though, a perverse mistranslation and even manipulation of central concepts and values embedded in these international efforts. They serve as rhetorical devices that allow for a codification of a consistent set of ideological and normative premises that guided the central government’s municipal policy for the past two decades. An illustrative example of this perverse mistranslation is that of local autonomy, a highlighted issue in the Bill. Modern local government is based on the recognition of the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population; it assumes full discretion to exercise their initiative with 76

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regard to any matter that is not excluded from their competence nor assigned to any other authority (Council of Europe, 1985). This dual expression of local autonomy structures the relationships between central and local government. In the new Municipalities Bill, local autonomy becomes a mistranslation for reduced bureaucratic supervision and control. It is not a fundamental right but a granted conditional privilege based on budgetary discipline – that is, the local capacity to sustain non-deficitarian finances, the criterion of ‘successful self-management’ according to the drafters. In the financial reality of Israeli local government, the release from onerous central burdens can only be the privilege of a minority of local authorities. The background policy analysis provided no deep understanding of the reasons why most local authorities face chronic financial constraints and disregarded the fundamental factor underlying these conditions (Blank and RosenZvi, 2009).11 Legitimising the gradual withdrawal of the state and its commitment to quality public services, the Bill’s financial blindness is a reflection of the nonpresence of central government. In this legal script, central government plays a deus ex machina role. Free of any positive responsibility towards local government and binding duties, its main role is the supervision of local authorities and punitive intervention in case of ‘unsuccessful’ self-management (Ben-Elia, 2009b).12 Challenged by the effective lobbying of influential mayors who felt threaten by the proposed restructuring of power and competences among the local authority echelons – the mayor, the council, and the professional level. The draft never reached the final third reading and it has remained in a legislative limbo since 2009.

Policy analysis of local government: analysis at the border of government Policy analysis at the border of government refers here to analysis performed by the State Auditor (the ‘State Comptroller’), an institution that maintains an ‘arm’slength separation’ with government as auditee. Local government is a subject of auditing examination by the State Auditor, including central government policies and programmes and the analysis of horizontal local policy and management issues. International Supreme Auditing standards nowadays embrace policy analysis as ‘goal achievement’ analysis – that is, the assessment of effectiveness by comparing outcomes or impacts with the goals set down in the policy objectives (INTOSAI, 2004; Lonsdale et al, 2011). Converging with this trend, policy analysis is an integral component of State auditing in Israel, mainly at the central government level.13 Within its formal mandate to oversee local government’s activities and performance, the State Auditor has produced a substantive analytical body on the interface between central government and local authorities and on systemic issues of the national municipal system. Overall, it is a mixed bundle of works in terms of analysed issues, approaches and depth. At times, there are problematic issues about internal reasoning, in terms of logical links and standards of assessment (Dery, 2005). The public importance of the auditing reports, though, cannot be 77

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underestimated. In many areas and issues, the responses to audit reports reveal the extent of policy influence, not only in terms of explicit criticism to government policies but also by suggesting other policies in their place – the State Auditor as ‘policy-maker’ (Sharkansky, 1988). The State Auditor has analysed the allocation policies of central ministries concerning local government budgeting, periodically reviewing, in the context of substantive issues, the formulation of these policies and their implementation. Such is the case of the State Auditor’s analyses of the equalisation grant granted to local authorities by the Ministry of Interior (Annual Reports, 2000; 2008). Historically its allocation was an issue of contention because of the lack of transparency in its determination; the grant was subject to political manipulation and biased in the past against the Israeli–Arab local authorities. The analyses conducted by the State Auditor assessed the actual allocation policy in the light of the more systematic and equitable formulas adopted in past years. They confirmed improvements in the allocation of the grant but also unresolved issues. What is more important is that the findings showed clearly that the grant, at present levels of funding, was incapable of serving its equalising function because of the great fiscal gap between wealthy and poor local authorities.14 A more recent report on the issue of local municipal services, illustrates the State Auditor’s emergent shift towards policy formulation assistance. As mentioned earlier there is an unequal provision of local services across and within local authorities, in terms of kind, scope and quality, mainly because of financial disparities. The Ministry of Interior has never institutionalised, as a policy principle, the public’s right to proper local services nor the right to know what is being delivered, at what level and at what cost (Ben-Elia, 2006).15 Recently, the State Auditor produced a dedicated report outlining a services policy, based on a normative service basket and a built-capacity for service performance measurement (performance indicators) (State Comptroller, 2012). Internationally the need for service accountability and comparative benchmarking is hardly a new idea but in the Israeli context, its advancement is an important public contribution. The analytical influence of the Auditor’s reports, though, is less clear. Some of them have had particular repercussion because of the public salience of the reviewed issues, in terms of risk (for example, the depletion and mismanagement of water resources) or public integrity (for example, political corruption); others seem to escape due consideration. In the local government field, the Auditor seems to have greater impact on procedural, administrative malfunctions, or issues that expose the incumbents to possible judicial appeals, than on substantive policy issues. It is possible that what is required here, given the powerful and authoritative status enjoyed by State Auditor is a focused and steady analytical effort on key policy factors.

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Policy analysis of local government: analysis from outside Policy analysis in Israel has been, largely, an activity conducted outside government, mainly by independent think tanks and to a much lesser extent by academicbased research centres. In the last decades, an expanding number of local think tanks sought to inform public policy, bridging the gap between knowledge and decision-making. Despite their differences, in term of affiliation, source of funding and field of interest, these research bodies share two main assumptions. First, that key issues facing Israel require in-depth understanding and systematic analysis and, second, that public policy is frequently poorly informed – by itself a compound outcome of organisational deficits, high-pressure decision-making and a political and management culture that prefers to improvise ‘facts on the ground’, rather than a disciplined process which includes analysis and a thorough examination of alternatives (State Comptroller, 2003; Sharkansky and Zalmanovitch, 2000). Their organisational mission and their identification of relevant public issues determine the activities of these think tanks. There is little dependence on government as a demand source for policy advice. Only a minority of think tanks have defined local government as a field of interest. Probably the earliest think tank to recognise local government as a key issue in the public policy agenda was the Jerusalem Centre for Public Affairs in the mid-1980s. The Centre produced the most comprehensive study at that time of local government in Israel (Elazar and Kalchheim, 1988).16 In the following years, though, the Centre let up its interest in local government affairs as its attention shifted to other areas. In the 1990s, a new think tank gained substantial prominence for its leading role in local government policy analysis: the Floersheimer Institute for Policy Studies, a Jerusalem based non-profit organisation established and supported by a Swiss donor. Active between 1991 and 2007, the Institute aimed to research fundamental processes taking place in the multicultural Israeli society likely to engage the attention of decision makers, to analyse the long-term implications of these processes and to propose alternative strategies of action. Despite this wide and ambitious agenda, there were primarily local government and local governance related policy studies that became its trademark and built its unique reputation. During its 16 years of existence the Institute produced over 80 policy studies, the most extensive and comprehensive research effort in these fields in Israel.17 They reached a wide audience within local government and central government through effective distribution channels of relevant publications and well-attended periodic public events (open conferences and discussion forums). In 2007, funding-related issues brought the Institute to close its doors. Occasional contributions have been made by other think tanks, even though local government is not a central issue in their public agendas, such as the Israel Democracy Institute. 18 The quantitative and qualitative output of these institutions warrant the question of their impact – that is, to what extent have they been capable of enriching the policy agenda and informing decision-making? It is extremely 79

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difficult to provide a convincing answer since there is no identifiable causal link between the think tanks’ contributions and concrete policy decisions. They are credited fingerprints in areas such as public law (some policy studies have served as supporting evidence for judicial decisions by the Supreme Court), legislative support (research utilisation by the Knesset’s Research and Information Centre), and State auditing. It is gratifying to see, for example, a policy study (Ben-Elia, 2006) being embraced and sustained by the State Auditor in one of its annual policy reviews (State Comptroller, 2012); it is less so to realise its lack of influence among those ministries in charge of local government policy formulation. Occasionally, issues and solutions entering the policy-making agendas suggest a possible link between analysis and policy.19 However, these instances are no more than a timely convergence of independent streams of ideas (Kingston, 2002) rather than a causal bond.

Policy analysis in local government The increasing complexity of local affairs, the continuous demand for improved services to a growing population and the constraints and dilemmas of changing financing modes, have forced local authorities to develop a greater capacity for informed guidance and control. This capacity has been sustained by external expertise (the occasional support of outsourced professionals), and by internal development of analytical capabilities. The need for improved internal analytical capabilities was already recognised in the early 1980s and was translated in a sustained effort by ‘Joint-Israel’, an entrepreneurial Jewish American NGO involved in the development of innovative social and community services in Israel. The central concept was the creation of dedicated internal units (later known as Strategic Planning Units), capable of supporting policy processes through informed inputs and more systematic decision-making.20 After a successful pilot project in a mid-size municipality, Joint-Israel actively supported the expansion of the project – financially and professionally. In the following decade, 30 units were established nationwide, covering a wide spectrum of local authorities.21 Some municipalities co-opted the idea independently (for example, Tel Aviv). The insertion of a dedicated analytical unit within a local authority is a problematic endeavour. The municipal organisation is based on functional divisions/departments with limited interactions among themselves. Their activities stem from specific, at times statutory, mandates, funding sources and professional affiliations. A dominant profession shapes each division/department and molds the main interests, the values stressed and the favoured approaches. This organisational assumptive world evolves into silo thinking, a trait that makes it difficult to deal with cross-sector issues. The operational perspective focuses on short-term considerations and the horizon of concern is usually dominated by the time-span of the annual budget. Operational management eclipses the need for strategic management – that is, a better understanding of trends, options and choices. Political cycles and the concomitant interests of a dominant mayor – as 80

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directly elected incumbent, and as active head of the local authority – reinforce short-termism. The Strategic Planning Units have attempted to promote a more holistic view of the local authority and its public tasks through critical information, at times counter-information, comprehensive and integrative policy inputs – issue analysis, scenarios and forecasts. Although subordinated to the mayor but lacking the functional legitimacy and power of each division/department, the Units’ influence is felt through its capacity to build professional bridges in a proactive and responsive approach, within the organisation and across organisations, based on cross-sector issues (or issues without an organisational address). They have been highly involved on matters concerning local growth, economic development, services delivery and community integration. They turned, at a later stage, to reflective policy analysis, through their involvement in the formulation of annual organisation work plans (Janner-Klausner and Felsenstein, 1997).22 From a wide municipal perspective, the success of these units is inconclusive. Some of the original Units came to an early end, victims of internal financial cuts or lack of organisational support. Others seem to have lost their original drive due to personnel wearing down over time. New Units were established after the Joint-Israel’s innovative project ended, a development based on internal needs and despite the lack of external funding support. The total number of units has remained steady.

Frames In linguistics, a polyseme is, in the strict sense, a word with multiple related meanings. It is possible to argue that ‘policy analysis’ as presented here can be conceived as a polyseme. In each of the four contextual backgrounds, the meaning of ‘policy analysis’ is different because of the different frames in which the policy issues are identified, conceptualised and problematised. As interpretative constructs, frames influence attention, selectively filter new information in the context of preconceived ideas, provide meaning and inform actions. Institutions frame issues and problems within prevailing system of beliefs, classifying schemes, styles of argument and action (Schön and Rein, 1994; Laws and Rein, 2003). In the case of policy analysis from within – policy analysis of local government in central government – the framing of this endeavour has been structured by fundamentals of the dominant neoliberal paradigm, led and sustained by the Ministry of Finance’s economic and fiscal policies. It permeates all areas of public interest and challenge the purpose, structure and management of the public sector, in line with what Peck (2010) has referred to as the ‘roll-back’ of the state, a restructuring processes focused on the dismantling of institutions, disorganising alternate centres of power, deregulating fields of bureaucratic control and disciplining disobedient actors. Local government is also subject of a paradigmatic reconceptualisation, based on an atomistic view in which local authorities are no more than quasi-autarchic ‘business units’, expected to rely

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on self-revenues, to conduct themselves according to economic considerations, while central government aims at minimum involvement.23 This local version of the neoliberal paradigm frames central–local relationships and provides a tacit rationale for key reforms.24 It sustains them through a discoursebased structuring of public issues that logically lead to particular conclusions. Its vocabulary is extremely effective because by means of a narrow set of leading ‘keywords’ it facilitates conceptual shortcuts, selective focusing on single aspects of complex issues and economic (heuristic) modes of decision-making. Their unquestioned reiteration, through multiple means of communication, normalises them and internalises them in inferred patterns of thinking. Consider, for example, the concept of ‘economies of scale’, a frequent ‘keyword’ in the government’s argumentation in its call for local government reforms. The claim that larger local authorities are more economically efficient and service effective has been a fundamental premise behind numerous policy initiatives, among them municipal amalgamation and the corporatisation of local services. Its non-challenged acceptance would seem to suggest a robust concept, grounded in empirical evidence. However, the mixed results that emerge from international studies do not support the proposition (Byrnes and Dollery, 2002), and considerable uncertainty surrounds local evidence as well (Ministry of Interior, 2006). The leading ministries, though, are not concerned with evidential validity but with confirmation and legitimation. In this context, analysis is not intended to inform policy but to sustain, ex-post, an already adopted course of action. Analysis at the border of government, that is analysis performed by the State Auditor, is conditioned by a multicentric conceptual scheme, based on distinct values and styles of argumentation. Following Pollitt’s classification of the auditors’ roles (Pollitt et al, 1999), it is possible to conceptualise the frame of auditing in terms of four different and complementary pillars: the law (the State Auditor as judge/magistrate), accountancy rules and standards (the State Auditor as public accountant), organisational improvement (the State Auditor as management specialist), objective evidence (the State Auditor as researcher/scientist). Compliance to the law and to professional standards of financial accountability (regularity) has been conventional frames guiding the work of the State Auditor. An additional value pillar complements and reinforces the principles of legality and regularity: ‘moral integrity’. The state auditing has not bound itself to a restrictive view of legal or technical auditing, by law and institutional conviction it has embraced moral integrity as an integral perspective in the review of government activities (Sharkansky, 1995). These three frames determine as well, the expectations of the auditees and the public at large vis-à-vis the State Auditor. In comparison, the management frame is less consensual. The State Auditor has implicitly adopted, as most Supreme Auditing Institutions worldwide – some of them explicitly – the philosophical principles of the New Public Management doctrine, mainly the principles of economy, efficiency and effectiveness. By implication, policy and management derivatives condition language and argumentation, as well as normative and practical reasoning concerning proper 82

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organisational conduct and performance. Israeli public institutions, in contrast, have not embraced the New Public Management doctrine, even if they have been localised adoptions of terminology and instruments, including local authorities.25 As a result, there is a conceptual and practical lack of synchrony between the analysis and recommendations of the State Auditor and the discursive, political and operational world of the national and local public administration. From the perspective of the final pillar (auditing as research), it is worthwhile to note the inevitable constrained framing of analysis: mainly focused on ‘goal achievement’, analysis is framed in the context of a given policy. The Auditor has been critical of implemented policies when inconsistent or incoherent, but rarely questioning policy on more fundamentals aspects: why a particular policy has been adopted? under what assumptions? were other options considered and, if so, why were they discarded?26 Complementing this issue is that of professional standing. Not infrequently, audit analyses include professional judgments on issues lacking disciplinary consensus or robust supporting evidence, tacitly legitimising policy decisions.27 Policy analysis of local government outside central government, that is analysis by independent think tanks, is set in a different frame. Despite their organisational differences and affiliations, all think tanks involved in the policy study of local government share three common traits: an adherence to scholarly principles of analytical conduct, a problem-orientation and independence. Based on systematic methods of inquiry and argumentation, in line with social science standards, they actively embrace issues of public interest, by means of timely studies attempting to untangle policy incongruities and outline possible solutions. Their voice is independent; interested stakeholders do not fund them.28 Despite their impressive output and their willingness to ‘speak truth to power’, their capacity to influence the policy agenda and the policy-making process is uncertain. It is possible that this is a particular case of a generic problem – that is, the lack of clear-cut answers about the success of think tanks at large to influence public policy. Different think tanks might contribute in shaping public policy preferences and choices but in different ways and at different stages of the policy cycle, some through greater argumentation and others through more robust research (Rich, 2004; Abelson, 2009). In Israel, there are undecided assessments about the policy influence of local think tanks (Meyers, 2009). In contrast with recognised references in judicial decisions (at the Supreme Court level), in audit analyses (the State Comptroller), or in legislative policy briefs (the Knesset’s Research and Information Centre) it is difficult to establish a direct link between the produced studies as inputs and policy processes within central government. It is not enough to ‘speak truth to power’, there must a willingness to listen, to establish a dialogue. The conceptual and ideological frame, within which central government formulates and sustain its local government related policies, seems to be impervious to external influence and dialogue with local think tanks is practically non-existent. The frame has become a ‘firewall’.29 Policy development within local government is a pragmatic endeavor and policy analysis is framed largely by expediency considerations. The local authority 83

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agenda has a short-term focus as public and operational demands impulses the decision-makers to react to emerging problems through quick solutions that allow them to move on to the next set of issues. Most decisions are not dependent on systematic analysis but on political intuition and professional working knowledge of municipal subject areas. Under these conditions, there is narrow space for formal longer-term research and evaluation. Policy analysis is frequently ‘quick and dirty’, maximising the best available information, and largely based on assumptions linked to comparative experience and data from similar issues – within the locality or elsewhere. The incorporation of analytical inputs involves, often, opportunistic processes, in the context of emerging issues or uncertain options. A more formal type of analysis is required at special policy cycles, such as the strategic planning of services or strategic development plans. Analysis here relies in a dual set of frames. The first one is disciplinary-based and follows the tenets, assumptions and practices of the relevant professions – for example, urban planning, education, human services. The second one is less evident, even transparent: it embeds the local outcomes of the central neoliberal policy. The reversal of the financial centre of gravity, from central to local revenues, shapes overtly and tacitly the strategic thinking of local government. The need to strengthen the local fiscal base set most local authorities in a competitive market for people and investments. Local development and financial sustainability become a central policy issue and the subject of analysis and deliberation. Local services are also the subject of analysis due to the constant tension between supply, coverage and equity and financial constraints.

Conclusion The ongoing decline of public services and growing socio-economic gaps in Israeli society, including regional gaps that add a territorial dimension, render the need for a new public agenda and a realignment of government policies, national and local. The complexity of the issues requires informed public decisions pertaining to the role of government, the division of responsibilities and competences between and across levels of government, the quality and the equity of public services irrespective of place of residence, and the fair allocation of public resources. These decisions also touch on the future of local democracy. Policy analysis has yet to find effective ways of bridging knowledge and decision-making. Each of the four reviewed institutional settings engage in different forms of policy analysis but all of them seem to share a common trait: they have a limited capacity for bridging – either because of self-inclusive framing or because of a systemic impairment for dialogue. The problem is compounded by a missing additional mode of policy analysis: public policy analysis. In the summer of 2011, under the rallying cry ‘The people demand social justice!’, hundreds of thousands of protesters in Israel took the streets opposing the continuing rise in the cost of living, the lack of affordable housing and the deterioration of public services, such as health and education. It was a massive 84

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and unprecedented social protest that presented the most serious ideological challenge to the dominant neoliberal policies of the Israeli governments. The need to crystallise social needs into policy proposals compelled the leading protest’s activists to a reflective recess for analysis and thinking, with the voluntary advice and support from a wide array of experts (Jerusalem Post, 2011). ‘Thousand Table’ events aimed to hold local roundtables across the country to discuss pertinent social issues, in lieu of the mass protests, expanded the number of people involved (Haaretz, 2011). Thus, for a short time, policy analyses became democratised. Although massive social protests are not ordinary contexts for policy analysis, it illustrates a convergence point of social reality and disciplinary theory. These events can be seen as a local expression of Hajer’s observation that ‘policy making now is as much a matter of citizens (and their associations) and enterprises acting in a concerted way as it is a matter of direct government intervention’ (2003, 191). It further supports the idea that in modern, heterogeneous and polycentric, societies, there is need for rethinking policy analysis in terms of practices of deliberation. If, from an argumentative perspective, policy-making is a process of deliberation, then, as argued by Dryzek and Hendriks (2012), political systems need to facilitate multiple deliberative spaces by which policy making can be informed by a diverse range of argumentation and communication. It is, further, a prerequisite for the building of public trust – among relevant social actors, and between civil society and government (Sztompka, 1999). In the Israeli context, the need for multiple deliberative spaces for policy making has reached a critical point. Unfortunately, in their resistance to reflection, the central and local policy systems refuse to recognise the need for opening public agendas to multiple actors and alternative frames of interpretation, inquiry and evaluation. Notes 1

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By neoliberal paradigm I mean a set of assumptions, concepts, values, and practices shared by diverse reform policies based on macroeconomic (for example, monetary stabilisation, fiscal austerity) and institutional (for example, reduced role of the state in the economy and public services’ provision) considerations. It frames, as we will see, the issues, modes and uses of policy analysis. Lack of compliance to key administrative and financial rules or cases of gross local mismanagement allow the Ministry to dissolve municipal councils or to dismiss elected mayors, an option that has exercised in recent years. As mentioned in a previous chapter, (see p 41), this law, first introduced in 1985 as an emergency supporting instrument for the Economic Stabilisation Programme adopted that year, has served since as an omnibus set of bills and amendments regarding diverse issues of economic concern, as well as a convenient mechanism for rush legislation on structural reforms. The appointed commission included senior representatives of three relevant ministries – Finance, Interior and the Ministry of National Infrastructures, a representative of the Union of Local Authorities and two external professionals – one of them acting as chairperson. 85

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This view was a local, albeit independent, expression of an international Zeitgeist. In the last two decades of the past century the meeting of growing resource constraints and environmental challenges and the dominance of neoliberal discourse resulted in a paradigmatic shift: from a state-based paradigm to market environmentalism (Haughton, 2002; Bakker, 2003). The Commission opted, though, to be oblivious of the multiple models evolving worldwide and their possible relevance (Ben-Elia, 1998). The demand for municipal amalgamation was not a new one. Since the mid-1990s the Ministry of Finance was pressing for the reorganisation of local government, both as a component of a larger contraction of the public sector and as necessary step towards a greater economy in sub-national public spending. These criteria included issues such as allocative efficiency, economic efficiency, performance effectiveness, enhanced professional capabilities, better service delivery, improved land use planning, social cohesion and equity. As stated clearly by the government’s proposed bill, ‘the general conditions of the national economy and the limited resources that can be granted to local government demand major steps towards a reduction of public expenditures and greater efficiency; there is serious concern that otherwise the local authorities will be unable to perform their public-duties as service providers’ (explanatory note of clause 10). The Commissions’ members were senior academics and ex-public officials, most of them with a proven record in local government affairs. All the conducted analyses failed to consider required supporting factors for successful merger, mainly : (a) the need for financial assistance to involved local authorities – most of them suffering from crippling deficits and debts; (b) the management of staff redundancy even though labour laws protect their security and the municipal labour sector is part of a powerful trade union openly opposed to massive personnel reductions; (c) the incorporation of an effective process capable of bridging sociological and organisational differences among amalgamated localities; and (d) the development of a positive public climate towards amalgamation. Mainly the untenable assumption that local authorities lacking a sound fiscal base can rely on self-revenues as primary finance sources, the central government’s reluctance to provide financial equalisation measures capable to redress the structurally unequal distribution of resources, and serious inequalities in central funding allocations. The Ministry has developed a powerful arsenal of extreme interventions, including – the appointment of Financial Controllers, accountable to the Ministry, with full command of all financial transactions and budget allocations, the dissolution of incumbent councils or the dismissal of elected mayors and their replacement by convened committees. For a contextual analysis of this issue, see Kimhi (2012). As stated by a former State Auditor: ‘the State Comptroller, among other things, addresses the following questions: did the actions of the audited body result in achieving the goals it set for itself and the implementation of the policy it established? Did it employ the most effective and efficient means at its disposal? Were the most economical means chosen for reaching the objectives?’ (Ben-Porat, 1995, 63).

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Although the grant is equitable, the involved sums are not capable of meaningful equalisation. In 2003 the total grant allocation was severally slashed and its present amount is still lower than a decade ago. The Ministry of Interior has repeatedly avoided a normative say on the issue of an equitable normative service basket. Its reluctance to confront the issue of equalisation is paralleled by the Ministry of Finance concern of potential implication on public funding and expenditures. Although an impressive piece of work, it is essentially a descriptive analysis of local government ‘as is’; there is no systematic attempt to analyse critically the policies affecting local government or the emergent policy trends – for example, the implications of an unfolding new political (neoliberal) economy and the retrenchment of the state. They cover a wide range of critical policy issues, including: central–local relationships, the spatial structure of local government, the finance of local government, local management and professionalism, the structure, performance and standards of local services, structural inequalities in the allocation of public resources – between Jewish and Arab local authorities and between fiscally wealthy and fiscally poor local authorities, and so on. For examples of this analytical endeavour see the body of work by Razin (www.fips.org.il/Site/p_publications/list_by_author_ en.asp?AuthorID=477), Ben-Elia (www.fips.org.il/Site/p_publications/list_by_ author_en.asp?AuthorID=439), and Khameisi (www.fips.org.il/Site/p_publications/ list_by_author_en.asp?AuthorID=456). As illustrated by the work on ‘Reform of Local Government’, a policy analysis advancing the idea of differential decentralisation (Efrati et al, 2004) and ‘The crisis in local governments in Israel’, a series of policy studies on financial policies and management (Ben-Bassat and Dahan, 2009). Such, for example, is the case of revenue redistribution among local authorities. In the early 2013, there were reports in the media about the intention of the Ministry of Finance and the Ministry of Interior to enforce the redistribution of revenues through inter-municipal sharing – from fiscally well off to poorer local authorities (The Marker 2013a; 2013b). The policy need for equitable revenues and mechanisms for sharing and redistribution were discussed in a number of policy analyses conducted in the past decade and before (inter alia, Ben-Elia, 1998; 2000; Razin and Hazan, 2006, for an analysis in depth). I was fortunate to serve as senior consultant for this programme, to share its conceptual development, and to implement, as a field demonstration project, the first municipal strategic planning in the country. For a participant view by a former director of this programme, see Forester, 2001, 176–7. At this stage, the units gained the recognition of the Ministry of Interior that, for some time, assisted in their funding. Beyond its direct organisational contribution as an operational-managerial framework, the work annual plan was an instrumental device for the Strategic Planning Units to bring the local authority to analyse critically its current activities through analysis

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23

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in action. This, in the context of local policy objectives, programmes’ relevance and effectiveness and resource utilisation. This view was first expressed in a policy report produced in the early 1990s, on the issue of the general grant as a government funded equaliser (see, Equalising Grant Commission, 1993). Neoliberalism has an almost hegemonic status in central government policy, not only because it is embraced and sustained by the most powerful ministry (the Ministry of Finance), but also because of the absence of alternative institutional perspectives that can challenge the dominant tenets. Despite its statutory responsibility for local government, the Ministry of Interior has been incapable of developing an independent vision and has embraced uncritically the neoliberal precepts. Israel’s reformers never embraced NPM as a conceptual framework for change. The hegemonic economic thinking has opted for a ‘degovernmentalisation’ of the State – that is, a deconstruction of the traditional public sector by means of quasi-privatisation of public entities, ‘contracting out’, marketisation of social services, and de-facto transfer of responsibilities, rather than internal modernisation. These questions pose an additional one, should professional policies’ formulation rest outside the State Auditor mandate? See Dery (2005) on the issue of professional judgement and professional legitimacy. Professional differences do exist but they are mainly expression of individual approach. They are those who analyse policy from an instrumental (ends–means) perspective while others adopt an openly normative standpoint, questioning not only the proper means to given ends but what the ends themselves should be. Laws and Rein (2003) argue that once a frame is embedded in policy making, self-evident and tacitly taken for granted, it resists reflection and can no longer be problematised or criticised.

References Abelson, DE, 2009, Do think tanks matter? Assessing the impact of Public Policy Institutes, Montreal: McGill-Queen’s University Press Amalgamation Commission, 1998, Final report [in Hebrew], Jerusalem: Amalgamation Commission Amalgamation Commission, 2003, Municipal amalgamation and changes of local government map [in Hebrew], Jerusalem: Prime Minister’s Office Bakker, K, 2003, An uncooperative commodity: Privatizing water in England and Wales, Oxford: Oxford University Press Bank of Israel, 2004, Annual report: 2003, Jerusalem: Bank of Israel Ben-Bassat, A, Dahan, M, 2006, The balance of power in the budgeting process [in Hebrew], Jerusalem: The Israel Democracy Institute Ben-Bassat, A, Dahan, M, 2008, The local authorities’ budget crisis [in Hebrew], Jerusalem: The Israel Democracy Institute Ben-Bassat, A, Dahan, M, 2009, The political economics of the municipalities [in Hebrew], Jerusalem: The Israel Democracy Institute 88

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Ben-Elia, N, 1998, The privatisation of water and sewage infrastructure: Between local initiative and government policy [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Ben-Elia, N, 1999, Government finance and the fiscal crisis in Israeli local authorities [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Ben-Elia, N, 2000, The fiscalisation of local planning and development [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Ben-Elia, N, 2006, Core local services: Expanding the public responsibility of the Ministry of Interior [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Ben-Elia, N, 2009a, Israel’s corporatisation of water and sewerage services: An unresolved reform [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Ben-Elia, N, 2009b, The Municipalities Bill: A codification of a barren doctrine [in Hebrew], Hukim [Journal of Legislation] 1, 135–82 Ben-Porat, M, 1995, The State Comptroller and Supreme Court decisions, in A Friedberg, B Geist, N Mizrahi, I Sharkansky (eds) Studies in state audit, Jerusalem: State Comptroller’s Office Blank, Y, Rosen-Zvi, I, 2009, The Municipalities Bill: Present without a past, reform without a future [in Hebrew], Hukim [Journal of Legislation] 1, 49–134 Byrnes, J, Dollery, B, 2002, Do economies of scale exist in Australian local government? A review of the research evidence, Urban Policy and Research 20, 4, 391–414 Council of Europe, 1985, European charter of local self-government, Strasbourg: Council of Europe Dery, D, 2005, The state audit: Standards and proverbs, Jerusalem: School of Public Policy, The Hebrew University Dryzek, JS, Hendriks, CM (eds), 2012, Fostering deliberation in the forum and beyond, in F Fischer, H Gottweis (eds) The argumentative turn revisited: Public policy as communicative practice, Durham, NC: Duke University Press. Efrati, Y, Razin, E, Brender, A, 2004, Local government reform: Decentralising the deserving and equipping the disadvantaged [in Hebrew], Jerusalem: The Israel Democracy Institute Elazar, D, Kalchheim, C, 1988, Local government in Israel, Jerusalem: The Jerusalem Center for Public Affairs Equalising Grant Commission, 1993, Final report [in Hebrew], Unpublished, Jerusalem: Equalising Grant Commission Forester, J, 2001, Israeli planners and designers: Profiles of community builders, Albany, NY: State University of New York Press Haaretz, 2011, Israel social protest leaders to hold ‘Thousand Table’ discussions throughout country [in Hebrew], Haaretz, 10 September Hajer, M, 2003, Policy without polity? Policy analysis and the institutional void, Policy Sciences 36, 175–95 Haughton, G, 2002, Market making: Internationalisation and global water markets, Environment and Planning A 34, 5, 791–807

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INTOSAI (International Organization of Supreme Audit Institutions), 2004, Performance audit guidelines: ISSAI 3000–3100, Copenhagen: International Organization of Supreme Audit Institutions Janner-Klausner, D, Felsenstein, D, 1997, New professions in local authorities in Israel [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Jerusalem Post, 2011, Social experts gather to help protest leaders, 15 August, Jerusalem Post Kimhi, O, 2012, Chronicle of a local crisis foretold: Lessons from Israel, Fordham Urban Law Journal 39, 3, 101–45 Kingston, J, 2002, Agendas, alternatives, and public policies, London: Longman Laws, D, Rein, M, 2003, Reframing practice, in M Hajer, H Wagenaar (eds) Deliberative policy analysis: Understanding governance in the network society, Cambridge: Cambridge University Press Lonsdale, J, Wilkins, P, Ling, T, 2011, Performance auditing: Contributing to accountability in democratic government, Cheltenham: Edgar Elgar Meyers, HE, 2009, Does Israel need think tanks?, Middle East Quarterly Winter, 37– 46 Ministry of Interior, 2006, Performance indicators system for local government [in Hebrew], Jerusalem: Ministry of Interior Peck, J, 2010, Constructions of neoliberal reason, Oxford: Oxford University Press Pollitt, Ch, Summa, H, 1997, Reflexitive watchdogs? How supreme audit institutions account for themselves, Public Administration 75, 2, 313–36 Pollitt, Ch, Girre, X, Lonsdale, J, Mul, R, Summa, H, Waerness, M, 1999, Performance or compliance?: Performance audit and public management in five countries, Oxford: Oxford University Press Razin, E, Hazan, A, 2006, Redistributing municipal wealth in Israel: Reducing inequalities in the revenues of local authorities [in Hebrew], Jerusalem: Floersheimer Institute for Policy Studies Rein, M, Laws, D, 2003, Reframing practice, in M Hajer, H Wagenaar (eds) Deliberative policy analysis: Understanding governance in the network society, Cambridge : Cambridge University Press Rich, A, 2004, Think tanks, public policy, and the politics of expertise, Cambridge: Cambridge University Press Schön, D, Rein, M, 1994, Frame reflection toward the resolution of intractable policy controversies, New York: Basic Books Sharkansky, I, 1988, Israel’s auditor as policy-maker, Public Administration 66, 1, 77–89 Sharkansky, I, 1995, Expanding the frontiers of state audit: Israel’s auditor as critic of political morals, in A Friedberg, B Geist, N Mizrahi, I Sharkansky (eds) Studies in state audit, Jerusalem: State Comptroller’s Office Sharkansky, I, Zalmanovitch, Y, 2000, Improvisation in public administration and policy making in Israel, Public Administration Review 60, 321–29

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State Comptroller, 2003, The decision-making process in the government preparatory staff work in government ministries and cabinet secretariat prior to cabinet decisions and follow-up on their implementation: Annual report of the State Comptroller [in Hebrew], Jerusalem: Government Printing Office State Comptroller, 2007, The allocation of the equalizing grant, annual local government report of the state comptroller [in Hebrew], Jerusalem: Government Printing Office State Comptroller, 2009, The financial recovery programs: Planning and implementation, annual local government report of the state comptroller [in Hebrew], Jerusalem: Government Printing Office State Comptroller, 2012, The municipal basket of services: Annual report of the State Comptroller [in Hebrew], Jerusalem: Government Printing Office Strawczynski, M, Zeira, J, 2002, Reducing the relative size of government in Israel after 1985, in A Ben-Bassat (ed) The Israeli economy, 1985–1998: From government intervention to market economics, Cambridge MA: MIT Press Sztompka, P, 1999, Trust: A sociological theory, Cambridge: Cambridge University Press. The Marker, 2013a, Treasury’s plan: Revenue sharing from fiscally wealthy to fiscally poor local authorities [in Hebrew], 5 March, The Marker The Marker, 2013b, Ministry of Interior’s model will harm fiscally wealthy local authorities [in Hebrew], 6 March, The Marker Water and Sewage Corporation Commission,1997, Final report [in Hebrew], Unpublished, Jerusalem: Water and Sewage Corporation Commission Zinger, Sh, Dana, S, 2009, The Municipalities Bill: From external supervision to internal checks and balances [in Hebrew], Hukim [Journal of Legislation] 1, 7–48

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Policy analysis and the legislature Shirley Avrami1 The Israeli parliament (Knesset) Research and Information Center (RIC) has a unique role in Israeli policy analysis. This role is built upon, among other factors, the governance system; the young age of the state of Israel and its parliament in general, and the Research and Information Center in particular; the lack of soundly based policy analysis methods both in the government and in the parliament; and the power of the government, especially the ministry of finance. This chapter describes the background for establishing the RIC, including its rationale and vision; the building of working methods, understanding parliament members’ roles and needs and accordingly defining the product, RIC papers and documents; and branding it as a trustworthy alternative to professional governmental information, resources, including personnel qualifications. The main targets, working methods and outcomes are briefly discussed, followed by insights into RIC’s empowerment of parliamentary activity and its importance to the young Israeli democracy.

Literature review According to James Madison, the fourth president of the United States (in Robinson, 2002), ‘Knowledge will forever govern ignorance, and if a people would govern themselves, they must first arm themselves with the power that knowledge brings.’ Robinson pointed out that good research and information can improve the effectiveness of the legislature along several dimensions of parliamentary activity. First, research can improve decision-making on specific policy issues faced by the legislature: reliable facts and analysis can contribute both to better understanding of problems and to more realistic and effective legislative solutions to these problems. Second, research can help improve the institutional dynamics within the legislature. A commonly accepted body of authoritative facts provided by a parliamentary research service can facilitate political agreement by narrowing the range of debate to differences in values, rather than disagreements over the facts of the case. Third, at a political level, the use of high-quality information by the legislature can add to the perceived legitimacy of its actions. Fourth, at the constitutional level, research for the legislature can position it to play a more active role in the national policy process. Legislative research contributes to a more pluralistic political process; it improves decision-making and enhances the legitimacy of the legislature; it can contribute to democracy by 93

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giving more people in society an effective voice in making decisions about their own governance.2 Finally, it can contribute to a more democratic temperament in the policy process. As will be shown later, these advantages of parliamentary research are also perceived by Knesset members. Hird (2005) explained that the role of expertise in the policy analysis realm began to shift markedly in the late 1970s and 1980s with the introduction of a more heterogeneous set of interest groups, think tanks and others offering policy analysis as political rhetoric. Many experts and policy researchers began to apply their expertise in public settings, such as congressional testimony, meetings with executive and congressional staff and publications aimed at a wide audience. Weiss (in Hird, 2005) outlined seven different models for research used by policy makers. Among them, she pointed out, two exist in the political context. Her political model sees research as enabling policy makers to rationalise decisions and support previously held views on public policy making, while her tactical model views research as a tool aimed at increasing the prestige of policy makers. The role of the professional body is to support decision-making process with facts and data. However, while such analytic support might bolster previously held views, as Weiss contends, it could also constitute an impetus for changing these views. Indeed, parliament members have noted, in several cases, that they changed their views, or decided to enact or withdraw proposed legislation, based upon data they received from the Knesset Research and Information Center.

The Research and Information Center: role and origins The Israeli parliament’s Research and Information Center is a new institution: it was established in the year 2000, when the speaker of the Knesset at that time, MK (Member of Knesset) Abraham Burg declared that the parliament did not suffer from lack of information – this is the information era – but rather, that parliament members needed an objective, reliable, non-partisan in-house source of information that they could rely on in their decision-making process. On the occasion of RIC’s tenth anniversary, the former speaker talked at length about the background of his idea and the vision that led to his initiative: Let me tell you how this idea began. At that time, some Knesset members received parliamentary assistance; I am not talking about assistance they got from the Knesset, but there were NGOs that paid for it. Nobody knew why they offered this help and who gained from it, but I thought these groups and the parliamentary library cannot be the only sources of information; parliament members should have an in-house unit which will provide them objective information, available to all of them. I realised that we could reduce the excuses, that a Knesset member would not be able to say, ‘I did not know, did not have the data and information.’ The modern parliament deals with the most important 94

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issues and decisions, and I felt that we were being cheated, we were not told the truth, we had no professional tool to help us make decisions. The parliament members were crushed by the most powerful interest groups, governmental or economic or political; this was the name of the game, which today no longer exists. There were huge powers who tried to resist the idea, very conservative [that is, simply rejected any change] powers, and my perception was to broaden the sources of information. My vision today, after a decade of activity, is that it will be a tool not only for Knesset members, as it has become, but also for the public, to judge whether or not the parliament members actually use the professional tool provided to them by public money. (Burg, 2010; author’s translation) Former speaker, Reuven Rivlin (2010), who was a parliament member when RIC was established and with whom MK Burg consulted, described the reasons for establishing a research centre within the Israeli parliament, as he, as speaker, saw them: Behind the establishment of the centre was the feeling that over the years a process of gradual degradation had occurred in the Knesset’s status and in its ability to properly fulfil its tasks. Knesset members were asked to cope with enormous amounts of unorganised information, and unfortunately even with attempts to hide relevant information from them. In the twenty-first century parliaments all over the world, including our parliament, found it hard to cope with the complex issues that occupy the public agenda of modern states. Up to a decade ago Knesset members, having no other option, had to rely on external sources of information in order to deal with the issues on the parliamentary committees’ tables… Ironically, they had to rely on information that stemmed from governmental sources, and in worst cases they received biased information serving specific interests. Rivlin pointed out what he saw as the main problem to which an in-house source of information is the solution, namely the attempts of lobbyists to influence the parliamentary decision-making process: Lobbying had become one of the central characteristics of modern democracy and modern economies. In the last decades there was a tremendous increase in the number of lobbyist groups in the parliaments of the most developed democracies; we must deal with this phenomenon very seriously. The easy accessibility of this biased information is a slippery slope…this danger must be dealt with in different ways, such as ethical, legal and law enforcement on the positive level; parliament must supply its members objective and independent knowledge agents, namely RIC researchers. 95

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The model chosen for the RIC was the CRS – the American Congressional Research Service, which was at that time almost 100 years old. According to Brudnick (2011), building on the concept of an in-house information service developed by the New York State Library and then the Wisconsin legislative reference department, Wisconsin Senator Robert Lafollette and Representative John M Nelson led an effort to create a special reference unit within the Library of Congress in 1914. Later known as the Legislative Reference Service, it was charged with responding to Congressional requests for information. For more than 50 years, this department assisted Congress primarily by providing facts and publications and by transmitting research and analysis done largely by other government agencies, private organisations and individual scholars. In 1970, Congress enacted a law transforming the agency into the Congressional Research Service (CRS) and directing CRS to devote more of its efforts and increased resources to performing research and analysis that would assist Congress in direct support of the legislative process. Joined today by two other Congressional support agencies, the Congressional Budget Office (CBO) and the Government Accountability Office (GAO), the CRS offers research and analysis to Congress on all current and emerging issues of national policy. CRS analysts work exclusively for Congress, providing assistance in the form of reports, memoranda, customised briefings, seminars, digitally recorded presentations, information obtained from governmental and nongovernmental databases and individual consultations. This work is governed by requirements of confidentiality, timeliness, accuracy, objectivity, balance and nonpartisanship. The Knesset’s Research and Information Center defines itself in a quite similar manner. Its aims are to assist Knesset members and committees with data, information and research, in order to enable them to fulfil their tasks in the three roles of the parliament: legislation; oversight of the executive branch; and debates on current issues, issues which are on the public agenda. Most works done in the centre are written upon demand, either by Knesset committees or Knesset members. In most cases timetables are very short, and data are hence gathered from ministries, agencies, professional materials, academic resources, and so on. It should be noted that data are carefully examined and crosschecked. This is done especially with data gathered from governmental resources, especially the ministry of finance, in order to enable Knesset members to fulfil, with the aid of the RIC documents, the Knesset role of oversight the executive. When timetables allow, or the topic demands it, field surveys are being held, including defining research questions, tailoring questionnaires, processing findings using statistical methodologies.

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CRS and RIC, as well as other parliamentary research bodies which were created in recent decades and exist today in most parliaments, function as think tanks.3 McGann (2009) defined think tanks as agencies which deal primarily with public policy research. He claimed that these are organisations that generate policy-oriented research and analysis on domestic and international issues to enable policy makers to make informed decisions about public policy issues. These institutions are structured as permanent bodies, not ad hoc commissions; they often act as a bridge between the academic and policy-making communities, serving in the public interest as independent voices that translate applied and basic research into a language and form that is understandable, reliable and accessible for policy makers. Avrami (2011) noted that although CRS and RIC are different in size – CRS employs 900 workers, RIC only 30 – and in governing system, the two bodies are very similar in working methods and in the dilemmas they are facing. The issue of trustworthiness and how it is gained is a very important one when a think tank, especially in a parliament, builds itself and brands its image. Knesset members often mention this specific qualification of RIC’s product as a tool that, since it is trustworthy, releases them from dependence upon external sources. MK Ahmad Tibi (2010) for example, stated: The RIC is important as a tool which does not leave the parliament member captured by data given by the government or by the press. It is an independent source of comparative analysis, statistics, numbers and figures, which may empower an MK’s vision or change it, but always on a solid basis. MK Ronit Tirosh (2010) added: I can testify here as a young parliament member. It took me time to understand that not everyone who suggests data to me gives me objective information on which I can base my decisions and votes. Luckily enough, what restores the balance, the sanity, what returns my faith in the information given to me is the RIC. It actually saved me, because I understood that decisions based on information from lobbyists might be wrong and biased. When I read a paper from the RIC I know I can trust it; I assimilate the data and I rely on it when I have to make decisions and vote. A very important point, also raised in MK Tibi’s statement mentioned above, is the impact of parliamentary research and public policy research activities in general. In the parliament, the concept of impact has a different perspective than in other research bodies. As parliamentary researchers, and civil servants, RIC employees do not wish to have a specific impact on the outcome, on the actual policy or piece of legislation to be introduced based on their work. They 97

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do wish, however, to have an impact on the decision-making process: to make it more professional, to give the parliament a tool which will enable it to have evidence-based policies. Most non-parliamentary think tanks do wish to influence the actual policy, the ultimate decision made in the institution to which they present their papers. This means that their papers cannot, and should not, be objective, because in most cases the institution has an agenda which leads to its way of perceiving, processing and introducing the facts. RIC acts in the opposite direction. It shows the widest available picture on each topic, offering as many different perspectives as possible and sometimes proposing alternative policy steps, with their advantages and disadvantages according to experts in the field. Meyers (2009) asked, does Israel need think tanks? Obviously it does, but it will take time before policy makers learn their importance and how to use them and the knowledge that they produce. The use of think tanks’ products as a source of knowledge is cultural and needs time. Reading Knesset members’ statements after a decade of RIC’s activity shows that there is a process in which the officials learn that knowledge exists, and that using it enhances their ability to perform their roles. Meyer also indicated the cultural part of think tanks’ activities and noted that Israel familiarity with American political life smoothed Israel’s introduction to think tanks. According to McGann (2010), Israel stands in twenty-third place in the world in the number of its think tanks per capita. He noted that the most important challenge of think tanks is how to make their knowledge accessible to policy makers; as Avrami (2011) noted, RIC does so by making its products user-friendly, in order that knowledge will be not only produced, but also used. Zrahia (2010), a well-known columnist, wrote in a column entitled ‘RIC – the lobbyists of the public’, that the RIC supplies Knesset members about 500 documents a year. Without them, he said, the public view on issues discussed would not be presented to decision-makers. He added, In recent years the status and positioning of the center was empowered, thanks to the many requests of Knesset members and committees and the impact the documents made in the press, and the dialogue with interest groups that followed…It appears that parliament members base their proposed legislation on models and international comparisons they find in RIC’s documents. Alon (2010) claimed that in the past Knesset members did not have the ability to understand budget details and would get lost in the data. Supplementing the budget control department with the RIC, as he put it, enables Knesset members to request an alternative cost assessment to the government’s and decide which one to accept.

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The centre: structure, manpower, working procedure, aims and products Structure As an institution built upon the model of the CRS, RIC’s structure is quite similar. It includes several multi-disciplinary teams, each led by a head of team who is responsible for quality control and the final shaping of the documents. In 2007, during the seventeenth Knesset, the then speaker MK Dalya Itzik initiated yet another expansion of the structure, namely a budget control department, which is in charge of all the economic parts of RIC’s activity: papers concerning macroeconomic issues, descriptions of various economic sectors, cost assessments of proposed legislation and economical analysis. This department was modelled on the United States’ Congressional Budget Office, which, as mentioned above, is not part of the CRS but yet another tool of the Congress, along with the Government Accountability Office. In Israel the GAO activity is under the responsibility of the State Comptroller. The RIC assists parliament members with the Knesset three parliamentary roles, that is, legislation, initiating public debates and overseeing the executive. The last role may be perceived as the most important one, not only because it uses critical thinking which a crucial rule of research in general is, but mainly because this role, much more than the two former ones, cannot be done in the way it is done in the Knesset, by an external body. This is due to a deep knowledge and understanding of parliamentary procedures, which shape the questions sent to ministries in order to get their overviews and data; long-lasting set of working relations with key informants in the ministries, and an ability to double-check data and information items. This may be exemplified in the activity of the budget control department in the RIC. This department, which was established in the RIC on 2007, writes alternative papers and economic analysis in addition to those brought to the Knesset by the ministry of finance, enables MKs, and especially members of Knesset finance committee, to learn of the data and its costs from an alternative, objective, nonbiased source of information. Three researchers have received a security clearance, enabling them to write papers upon demand of the committee of foreign affairs and defence. Due to organisational changes this committee has also its own professional staff, a fact that narrows its requests from the RIC. Manpower Thirty-five researchers are employed in the centre; all have at least an MA degree, in social sciences, economics, humanities or law. Acceptance as an employee is done through a public process, by advertising job openings in the press, in Hebrew and Arabic. Applicants undergo a series of examinations, including those required 99

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by the commissionership of civil service, professional tasks and tests of writing ability The typical profile of an IRC researcher is, generally speaking, 25–30 years old and in some cases undertaking advanced studies towards a PhD. The model of employment which has changed in 2006, changed workers’ profiles: in the centre’s first years, employment was allowed for three years only. In 2007 the centre’s researchers were accepted as full-term Knesset employees, and although there is turnover in manpower even today, this step has increased the average age and education level. During the first year of employment, each researcher gets a wide range of guidance, covering, among other things, parliamentary activity focusing on the legislative process; research methods, search engines and databases, search skills and the information world in general; and introduction to governmental sources and working methods, research institutions and experts in various fields and international resources. In this respect it should be mentioned that RIC has observer status in the ECPRD (European Centre of Parliamentary Research and Documentation), a status which enables its researchers to receive comparative data about European parliamentary activity. Mutual information is supplied upon request by various parliamentary research institutions from the ECPRD member states. Working procedure The working procedure is made up of three phases. The first is accepting the research request, either from a committee or from a parliament member, defining its parameters with the initiator, setting a schedule and collecting the necessary information. Information is obtained from various sources, among others parliamentary sources in Israel and abroad, governmental sources, internet sites, academic institutions, research institutions and relevant experts. The second phase is the actual writing: processing the information which was double-checked and cross-referenced, while maintaining high professional standards via quality control, and focusing on a short, clear, substantive and impartial document. One of the strengths of RIC is the match between parliament members’ needs and the product the centre produces for them. Accurately defining these needs derives first of all from the fact that the centre is located within the parliament building; its workers are civil servants, employees of the Knesset and not of any political body within it. Also, centre staff are familiar, and deeply understand, the unique character of parliamentary work. One must bear in mind that parliament members are required to make decisions on a very wide range of issues, on a daily basis, with never enough time to study an issue more than several days, or weeks at the most. This pressure shapes the RIC paper: it must be as short as possible, coherent, comprehensive and understandable both to parliament members who already have knowledge of the topic and to those who have little or no prior knowledge of the issue. A typical paper includes a short description of the issue; the actors involved, government ministries, NGOs, private entities and others; the main issues and relevant former discussions and 100

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decisions about them; the main dilemmas; and opinions of leading bodies and experts. One of the most important characteristics of RIC’s papers is that they do not include the writer’s opinion about the issue, nor do they seek to have an impact in the sense that they want to lead to a specific decision. They do seek, however, to make an impact on the decision-making process itself, to make it more professional and evidence-based. MK Ronit Tirosh (2010) said: ‘I know another professional, external source of information. The problem is that it does not “live the Knesset,” so its papers are not useful. In the RIC’s work, the product is focused on our needs, directed to our work in the committees, and hence it is very useful for us.’ MK Hanin (2010) mentioned another advantage for him in the way the papers are prepared: We face today a reality in which there is no lack of information; on the contrary, there is a flood of it, and we need assistance to control it, especially with the tools of critical thinking and fact-checking. I am chairperson of a committee dealing with topics that involve heavy interests – the joint committee of interior and health, which discusses environmental issues. The research dimension is very important, and at the same time many issues are very new and there is not enough knowledge in the professional literature about them. For these issues in particular, the research we receive from RIC, which sometimes is really pioneering, has no alternative. Parliament members also mentioned the independence that the RIC enabled the Knesset to have as its most important advantage for them, and said that in this sense, the most important function of a RIC document is that it enables them to fulfil their role of oversight of the executive, a task which would not be possible without the critiques included in many papers, which are essential in papers which aim to follow governmental activities and the implementation of laws. The third and last phase of the working procedure is presentation: sending the document by e-mail to the Knesset member or committee; orally presenting to the initiator (Knesset member or committee chairperson) the main issues, findings and topics recommended for discussion in the committee debate; and participation of the researcher who wrote the paper in the relevant parliamentary debate including, in many cases, presenting the document. In many cases, when a document is prepared for a committee meeting, the researcher who prepared it is asked to present the main findings at the beginning of the committee’s discussion, and the paper functions as the factual basis for the discussion. In other cases, the committee’s chairperson or the Knesset member who initiated the paper is the one to present its findings. This presentation is in addition to sending the paper to committee members prior to the discussion to give them time to study it, to raise questions by phone with the writer if needed and to come prepared to the committee debate. The RIC has its own archives, in which all papers are kept both as files and as hard copies. 101

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Aims RIC sees its aim as assisting parliamentary committees and members with documents, data and research which will help them in implementing their three tasks: legislation, oversight of the executive branch and initiating debates on issues which are on the public agenda. All the roles, and especially oversight of the executive, require the use of the initial research tool of critical thinking. This means cross-checking and verification of each piece of data, including data obtained from the government. In cases when there are gaps or contradictions between data obtained from different ministries or even, as sometimes happens, from different departments in the same ministry, these anomalies are mentioned in the paper as issues needing to be discussed. Friedberg and Hazan (2009) noted that in order to increase the ability of the Knesset to oversee the government, an important tool is empowering the RIC. They had three recommendations: (1) anchoring the status of the centre in the basic law (2) increasing its budget and (3) re-structuring it in order to parallel its structure to the structure of parliamentary committees, in order that separate teams will be dedicated to the work of each committee. The former Knesset speaker, MK Rivlin (2010), referred to the parliamentary task of oversight: The lack of information prior to the establishment of the RIC had been realised in two areas which are at the heart of parliamentary activity: economic and budget control, and oversight by parliamentary committees. Parliamentary oversight in economic issues had been always a weak point in parliamentary activity, since discussion of economic issues needs a high level of expertise. Add to this the lack of information sources prior to the existence of the RIC and the rise of the arrangement laws and you get a fatal weakness in the effectiveness of the Knesset’s oversight and in the ability of parliament members to lead and to have an impact on public discussion. In this aspect, establishing RIC was, and still is, a real revolution in the ability of the Knesset to fulfil its task of oversight of the executive branch…It should be noted that RIC not only empowers the ability of the sovereign to oversee governmental activities, but also the ability of the executive itself; RIC’s papers are requested by senior governmental clerks prior to discussions in order to find out what the Knesset knows about the issues to be discussed. And the last aspect of oversight, enabled through RIC’s work, is oversight by the public, thanks to publishing the papers on the Knesset website. One of the interesting ways in which the centre’s activity is referred to, as various speakers put it, is by comparison to governmental bodies that do not have a similar decision-supporting and policy analysis service. Former MK Zvulun Orlev (2003), as minister of welfare, said: 102

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In the previous Knesset term I was head of the committee on education, and very much appreciated the work of the Research and Information Center. I was one of their main clients. Now that I have moved to the government, as a minister I sense the lack of such centre. I wish that ministers could get data before government meetings like Knesset members get from the RIC. The government secretariat has something yet to learn from the Knesset. Similar remarks were made by Mr Yehezkel (2010), the former government secretary: ‘The government has to learn from the model which was developed in the Knesset. I wish as a government secretary that I had such a tool to prepare government members for the debates and enable them to come prepared to government meetings, as it is today in the Knesset.’ The speaker of the Knesset, MK Reuven Rivlin (2010), said: The RIC continues to be a credible and independent source of professional information, which enables Knesset members to make considered, clear and substantive decisions. Now, one can’t imagine the Knesset without the availability of the RIC; until its establishment, members of the Knesset had to contend with a deluge of uncontrolled and disorganized information, and even on occasion with efforts to conceal relevant information. Generally speaking this problem no longer exits. According to an amendment added to the Knesset law (amendment no 24), all the controlled bodies, that is, government ministries, public and governmental companies and so on, are obliged by law to give RIC data and information upon demand for preparing research papers and documents.4 A secondary aim of the center is the bond with the public. Partly this is accomplished by putting RIC’s documents on the Knesset website, in order to make them useful and accessible for the general public – students, scholars, journalists, courts of justice and citizens. In addition, the RIC has a weekly programme named ‘News Concept’ on the Knesset TV channel, in which RIC researchers present to the public documents which they recently presented in Knesset committees covering topics on the public agenda. Rivlin (2010) said of the issue of RIC’s bond with the public: ‘Publishing RIC’s research and documents on the Knesset website enables effective and meaningful oversight by the public and not only by its representatives.’ In the same context, the Knesset general manager, Dan Landau, commented on the dilemma of ‘to whom do the papers belong,’ a dilemma also faced by other parliaments: We have in the Knesset different perceptions regarding this dilemma. There is the claim that every document must be accessible to all; but there is also a perception saying no, there is competition over 103

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information, and as much as the governments hides information, the parliament may do the same, in order to tactically defend itself; and there is a dialogue between these two perceptions. But we are in the middle of rebuilding the Knesset website, as a part of democratisation of information, and RIC products are obviously part of this process. All its products are on the web, and the public will be able to transform data into information, in order to gather knowledge out of it and make up their minds accordingly. The RIC is already the benchmark, we are already there. Products and outcomes As of April 2015,3,411 titles appear on the list of RIC written documents. A recent analysis of RIC activity showed that during the term of the nineteenth Knesset 533 documents were prepared, of which 293 were submitted for deliberations of various Knesset committees, 228 were submitted to Knesset members and 21 were written at the request of Knesset departments or as initiatives of the centre.5 The division of documents prepared in the nineteenth Knesset term (February 2013 to March 2015) classified by committee was: finance, 79; education, 21; labour, welfare and health, 23; internal affairs, 19; economic affairs, 28; public petitions, 17; foreign workers, 20; children’ rights, 10; constitution, law and justice, 1; status of women, 23; science and technology, 20; drug abuse, 4; and state control, 9. Monitoring the extent to which policy analysis is actually done in the Knesset through RIC’s documents is done on a permanent basis by the RIC secretariat. This task is done by collecting citations of RIC documents and findings in Knesset debates, both in the committees and in the plenum, and by collecting quotations and references in the press. A systematic search was done in Knesset minutes, through the Knesset website www.knesset.gov.il, for the years 2000 to 2011, from RIC’s establishment in 2000 through to the end of July 2011. Keywords used were research, information, research and information centre, and also ‘mem-mem-mem’ (‘merkaz mechkar umeyda’), the Hebrew initials often used as the name of the centre, both in the Knesset and outside it. The ‘general search’ led to 562 results using the key words ‘research’ and ‘information’, and another 166 results using ‘mmm’. Impact of the reports on Bills in the Knesset In a meeting of the parliamentary committee of state control on 8 December 2014 the chairman, MK Amnon Cohen, said: as MKs we receive data from government ministries and ask the RIC to check the reliability of this data, as the law is formed based on the 104

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data. The data we receive from RIC researchers are undisputed, and on many occasions we had to change the government Bills in view of the RIC’s data. In many cases the RIC’s contribution to the Bill is mentioned in the Bill’s explanatory notes. For example, in the explanatory notes to the Bill ‘National Cultural Activities Basket’, it is mentioned that according to the RIC’s report, which was prepared at the request of the Bill’s initiator, two-thirds of the Israeli pupils are not eligible for cultural activities at school. As the Bill further notes, RIC’s report found out that only 45 per cent of the cultural activities funding at school comes from the state budget, and the rest must be paid by parents and local authorities; no wonder that only pupils from rich communities are benefitted by this programme and hence it is proposed to enact cultural activities for all. A satisfaction survey conducted in August 2010, which examined the satisfaction of Knesset members with the RIC’s services on a scale of 1 to 10, revealed the following findings: quality of the documents, 9.50; extent to which the documents were up to date, 9.57; credibility, 9.71; depth and seriousness of the analysis, 9.66; and timeliness, 7.64. It should be noted that the response rate was low, about 20 MKs.

Discussion The Knesset Research and Information Center assists parliamentary committees and members with data, information and research, which are all parts of the policy analysis done within the parliament. As a political entity, parliament deals mainly with policy, whether it is through public debates, legislation or oversight. One of the main differences between a parliamentary research institution and other public policy research institutions is that in general, the latter wish to have an impact, through data, on decisions made in the institutions to which they give the data; while the Knesset Research and Information Center, like other parliamentary research services, does not wish to influence the bottom line, the decisions made, but rather to have an impact on the decision-making process, to upgrade it and to enable politicians to develop evidence-based policies. Earlier in this paper, this characteristic was mentioned positively by various parliament members talking about the uniqueness of the data given to them by RIC. As noted, RIC was built upon the model of the CRS, the Congressional Research Service, and in many ways they resemble each other. As Brudnick (2011) noted, the political powers in the United States are distributed in a way that is intended and almost guaranteed to create competition and conflict between the legislative and executive branches. The US system of government is characterised by separation of powers, which leads to a shifting balance of power between the 105

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two branches; and the power of the CRS as a tool for Congress’ independence stems from this structure. Although, as Brudnick rightfully noted, this is not the case in a parliamentary system, Knesset and Congress members have similar needs, needs which can only be met by an in-house, independent, non-partisan and unbiased source of information. In Israel, there are in-house research units only in several government ministries. Occasionally requests for research and information are sent to the RIC, but documents are written only when the requests are connected to the minister’s parliamentary activity (most ministers are also members of Knesset). From time to time there are attempts to deny or postpone access of RIC to governmental information and data; an amendment added to Knesset law on 2008 gives RIC legal opportunity to require such data, and indicates explicitly that ministries and other agencies must comply to such requests immediately.6 Although it was not obvious in the Knesset only 15 years ago, members’ internalisation of the understanding that ‘knowledge is power’ and that knowledge is a vital resource for their work in the twenty-first century has led to the current reality, where the Knesset has become a model for the use of knowledge in decision-making. Several models of policy analysis were mentioned in the literature review. The political model sees research as enabling policy makers to rationalise decisions and support previously held views on public policy making. This model is reflected in the way some Knesset members perceive RIC’s activities. MK Oron, for example, referring to the question of the linkage between policy analysis and viewpoints, stated that ‘In many cases I find in RIC’s papers reinforcement of the positions I already held’ (Oron, 2010); while MK Tibi (2010) said, on the contrary, that ‘I may say that RIC’s work either strengthens MKs’ views or changes them, but it is always on a solid basis of data, figures, statistics and comparative studies.’ Another policy analysis model mentioned was the tactical one, which views research as a tool aiming to increase the prestige of policy makers. In this regard, MK Burg said (2010): ‘The Knesset Research Center should be strong, powerful and threatening; but its most important characteristic, its main achievement and at the same time its big hope for the second decade is its incredible prestige.’ Sometimes Knesset members recognise that the support of the RIC enforces their position vis-à-vis government bodies. For example, in a debate held in the committee for child right, the chairwoman, MK Orli Levi-Abekasis opened: This committee is much more powerful than we thought. You could see in the press this morning, that we, with the Knesset Research and Information Center, which prepared the document you see, made a progress in the ministry of health, concerning the issue… before we start deal with the document itself and its findings, we shall get a short description from Maria, who is our committee’s aide from the RIC.7

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At the above-mentioned event the speaker, MK Rivlin (2010), concluded, ‘The Knesset Research and Information Center is but a symbol of the long path the Israeli parliament has gone through and a sign of the way we still have ahead of us, in order to upgrade the Knesset’s work and outputs.’ Notes 1 2

3

4

5

6 7

Knesset Research and Information Center, Jerusalem. Legislative research is often informed not just by the public and private sectors, but also by NGOs and directly by citizens. It is a question for debate whether this definition applies to bodies within the governance, or only for private ones, external to government authorities. Aizencang-Kane (2004), for example, includes in her international think tank screening, institutions which are both private and governmental. Gaffney (1991) claimed that in the United Kingdom and France, for example, there is an old tradition of consultation and policy planning, done by think tanks which are bodies within government authorities and ministerial cabinets. Nevertheless, the above-mentioned amendment, exempts data related to security and defence issues although this does not preclude the centre from dealing with such issues. Indeed, three researchers have passed through clearance process and conduct research for the Foreign Affairs and Defence Committee and for the Joint Committee for the Defence Budget. A rather critical document was written and published for the common committee, dealing with the Knesset’s oversight problem with respect to the security budget. The initiatives are rather rare, and this is mainly due to a combination of overload requests and limited manpower, dictating on top priority the researches which are written upon demand. Knesset Law, amendment 24, 2008, The Book of Laws 2136, 6 March 2008. Knesset minutes, Committee of Children’s Rights, 28 May 2013.

References Aizencang-Kane, P, 2004, The linkage between knowledge and policy: The role of think tanks around the world and in Israel in public policy processes design, Jerusalem: Jerusalem Institute for Israel Research Alon, G, 2010, The research institution of Knesset members, ‘Israel Hayom‘, 25 October Avrami, S, 2011, What do think tanks do?, Presentation at an international conference, the Israeli Democracy Institute, 15–16 May, Jerusalem Brudnick, IA, 2011, The congressional research services and the American legislative process: CRS report for congress, prepared for members and committees of congress, CRS RL 33471, Washington, DC: CRS Burg, A, 2010, Knesset minutes, 1st decade of the Research and Information Center, 21 December Friedberg, H, Hazan, YR, 2009, Legislative oversight of the executive branch in Israel: Current status and proposed reforms, Jerusalem: Israel Democracy Institute. 107

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Gaffney, J, 1991, The political think tanks in the UK and ministerial cabinets in France, West European Politics 14, 1, 1–17 Hanin, D, 2010, Knesset minutes, 1st decade of the Research and Information Center, pp 14–15, 21 December Hird, JA, 2005, Power, knowledge and politics, Washington, DC: Georgetown University Press Landau, D, 2010, Knesset minutes, 1st decade of the Research and Information Center, 21 December McGann, JG, 2009, Catalysts for growth and development: The role of think tanks in Brazil, Russia, India, China and South Africa, New York: Center for International Private Enterprise McGann, JG, 2010, The global ‘go-to think tanks’, Philadelphia, PA: The Think Tanks and Civil Societies Program Meriam, IC, 1985, 50th anniversary celebration of American Social Security, Social Security Bulletin 48, 85, 30–1, Washington, DC Meyers, HE, 2009, Does Israel need think tanks?, Middle East Quarterly 16, 1, 37–46 Orlev, Z, 2003, Knesset minutes no 38, Labor, Social Affairs and Health Committee, 17 November Oron, H. 2010, Knesset minutes, 1st decade of the Research and Information Center, pp 16–17, 21 December Rivlin, R, 2010, Knesset minutes, 1st decade of the Research and Information Center, 21 December Robinson, WH, 2002, Knowledge and power: The essential connection between research and the work of legislature, Brussels: European Center for Parliamentary Research and Documentation Tibi, A, 2010, Knesset minutes,1st decade of the Research and Information Center, 21 December Tirosh, R, 2010, Knesset minutes,1st decade of the Research and Information Center, 21 December Yehezkel, O, 2010, Knesset minutes,1st decade of the Research and Information Center, 21 December Zrahia, Z, 2010, The researchers which supply Knesset members with a reliable, non-biased data, The Marker, 2 August

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SIX

The making of disability policy in Israel: ad hoc advisory expert panels Arie Rimmerman and Michal Soffer

Introduction Ad hoc advisory expert panels are widely used by governments in the United States and Europe to analyse current policy or propose alternative ones (Egeberg et al, 2003; Figura, 2011; Gehring, 1999; Ginsberg, 2009). Unlike a standing or permanent committee, ad hoc committees are generally tentative and therefore their impact is limited to initial phase and not implementation. An expert panel is usually composed of independent policy or programmespecific specialists. The panel is mostly employed as an instrument for synthesising information from a range of sources and drawing on a range of viewpoints in order to arrive at overall conclusions (compare Dawood et al, 2011; Gornitzka and Sverdrup, 2008; Hemerijck and Visser, 2003; Iacoboaei, 2008). The main advantage of working with panels of experts is that they offer policy-makers diversity of ideas and innovative directions. However, panels of experts often lead to deadlock and an inability by the participants to reach a consensus. These panels are often used in Israel, but they have been little studied. It is also unknown whether their recommendations are fully or partially adopted by policy-makers (Figura, 2006; 2011). In this chapter, we introduce, review and analyse two cases of ad hoc advisory panels of experts appointed by the Israeli government in 2011 in order to set a new direction for disability-related policies. The first pertains to the realm of sub-minimum wages for people with disabilities and the second addresses the issue of community residence of people with intellectual disabilities (ID).

The use of committees in public policy In recent years, there has been extensive use of public committees of experts in examining, reviewing and evaluating government policies (Ejzenking-Qana, 2004; Harari, 1974). The European Community tends to use diversified panels as a central tool of programme evaluation. Public committees are quick, cheap and are considered to be part of the decision-making process which therefore has an impact on European policy making (Egeberg et al, 2003; Gehring, 1999). It was argued that public committees were perceived by both government and the general public as objective and non-dependent entities (Marchildon, 2001). 109

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Cartwright (1975) distinguished between three types of impartial committees: one kind in which the members do not possess any special knowledge or interests concerning the subjects dealt with; second, committees of experts whose members are chosen because they are perceived to possess knowledge on the issues at hand; and, third, representative committees whose members represent the various interests that concern the committee’s mandate. Scant research has been conducted on public committees; nonetheless the overall impression is that that their recommendations are rarely implemented as advised. It appears that the most common reason for lack of implementation is resistance to change and the administrative difficulties involved in implementation. In Israel, for example, poor implementation is often associated with the nature and structure of the political and bureaucratic systems (Figura, 2006; 2011). According to Figura (2011) most public committees are ad hoc and address immediate concerns. Government’s expectation is that such panels will be objective, sensitive to political issues and controversies, and helpful in improving policy-making. Typically the committee’s discussions are open to the public and that its reports are considered public records (Harari and Hofnung, 1988; Vickers, 1965) although they are not legally or otherwise binding (Attorney General, 2003; Harari and Hofnung, 1988).

Expert panels The subject of expertise received extensive documentation in policy analysis and public administration research and literature over the previous decades. Experts are now involved in various phases of policy making processes and fulfil many tasks (Iacoboaei, 2008). According to Halffman and Hoppe (2005), experts offer reliable information to policy makers and are involved in evaluating past and future policy outcomes. Nonetheless, Halffman and Hoppe (2005) assert that experts have been involved in policy processes in many other ways, among those, problem framing or reframing, fulfilling interpretive and reflective roles, and acting as catalysts in the promotion of processes (see also MacRae and Whittington, 1997; Renn, 1995). Experts are chosen to represent all points of view in a balanced and impartial way. The chosen experts are widely recognised as independent specialists in the domain of the evaluated policy. They are asked to examine and analyse optional policies or programmes and produce agreed upon conclusions. The advisory panel is neither required to explain its judgement criteria nor trade-offs among criteria, but the credibility of the evaluation is guaranteed by the fact that the conclusions reflect agreement among people who are renowned specialists and represent different ‘schools of expertise’ (MacRae and Whittington, 1997). Presidents of the United States and executive branch agencies have been establishing federal advisory committees since 1974. Such committees consist of an array of experts who examine a given issue, usually complex issues or issues which are disputed, and recommend policies and actions (Ginsberg, 2009). 110

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However, federal advisory committees could be used for political purposes of generating legitimacy, help settle political disputes, or even buy time for policy makers (Campbell, 1988; Harari, 1974). Zegart (2004) categorised federal advisory committees in the United States into the following groups: agenda commissions, which are primarily geared toward gaining support for the president’s policy initiatives; information commissions, which are created in order to provide new information, notions and analysis to policy makers; and political constellation commissions, which aim to maintain consensus, reach compromises and cooperation regarding policy. The central mechanism utilised by the European Commission, for example, in order to attain external expert advice are temporary or permanent expert groups (Gornitzka and Sverdrup, 2008; Iacoboaei, 2008). Ad hoc expert committees and what are coined ‘High-Level Groups’ are created by the European Union in order to examine specific policy issues and offer recommendations (Hemerijck and Visser, 2003) and are defined as follows: [A]n expert group is a consultative entity comprised of public or private sector experts, and the Commission is in control of its composition… Expert groups do not formally make political decisions, but feed the decision making processes by giving expert advice, providing scientific knowledge, sharing practical experience and information, and serving as forums for exchange of information. (Gornitzka and Sverdrup, 2008, 727) It seems that when government in Israel seeks policy advice, experts panels are often a preferred channel. Shalev and Hashiloni-Dolev (2011) for example, have found that bioethics policy is governed by the Ministry of Health, but dominated by the medical profession: [The] mechanism of an expert committee with the power to make decisions has become a key instrument in the regulatory system that evolved, and that expert committees act in two capacities: as governmental advisory bodies to recommend policy; and, as decisionmaking bodies with the authority to allow otherwise forbidden practices in individual cases. (p 158)

The case of the sub-minimum wage committee Sub-minimum wage (SMW) or adjusted minimum wage (as it is known in Israel), is a controversial policy geared to promote the employment of persons with severe disabilities. SMW policies enable employers to pay reduced wages to employees with disabilities according to their level of productivity. Thus, under this policy, persons with disabilities can be paid wages which are below the mandatory or established minimum wage (Soffer et al, 2011). 111

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Adjusted Minimum Wage Regulations (Adjusted Wage for Employees with Disabilities Having Reduced Ability to Work Regulations 5762-2002) were formulated in Israel in 2002 and were implemented for a trial period, fixed at four years, only on 1 November 2006, by the Ministry of Industry, Trade and Labor (MOITAL). Since the implementation of the regulations, SMW assessments are performed in Israel by two different outsourced entities who differ substantially in their assessment methods: the Company for Rehabilitation Projects, Ltd, also known as ‘Shel’ (a private service provider) and the Vocational Rehabilitation and Training Centre at the Loewenstein Rehabilitation Hospital (an NGO), according to geographic regions (Soffer et al, 2011). The choice to implement two rather than one assessment method stemmed from the fact that the Ministry felt at a loss and inexperienced with the such a task: ‘we did not know what to do…one of the problems that I did not foresee was that we (MOITAL) became involved in something we knew nothing about, we are not therapists or rehabilitation personnel, I am an economist’ (Director of the Committee for Aiding Disabled Persons in the Labor Market, MOITAL, Mr Beni Fefferman personal communication, 26 January 2012). In 2011, the CEO of MOITAL appointed a committee of the following experts from academia: Prof Arie Rimmerman of the Haifa University, Prof John Gal of the Hebrew University of Jerusalem, Prof Shlomo Noy of Tel Aviv University, Dr Naomi Hadas-Lidor of Tel Aviv University and Dr Michal Soffer of Haifa University (Committee for Aiding Disabled Persons in the Labor Market, MOITAL, 23 November 2011). The committee’s mission was to suggest a unified method for assessing the sub-minimum wage of employees with disabilities who are considered to have a diminished work capacity. In other words, the committee served as a type policy analysis. In addition, the trial period was extended until 2012. The members of the committee held three meetings and conducted a mini benchmark study which entailed a comparison of SMW assessment processes in the United States, Australia and Israel. The study’s conclusions were the basis for the revised model for SMW assessment which was proposed to the Ministry by the experts. The committee submitted its specific recommendations to the Ministry (Committee for Aiding Disabled Persons in the Labor Market, MOITAL, 23 November 2011) which are listed in Table 6.1. These recommendations were discussed and negotiated in the final meeting of the committee (November 2011). As Table 6.1 shows, merely three suggestions were fully accepted by the Ministry. Four of the suggestions were only partially accepted. The Ministry agreed to make a gradual attempt to promote the transparency of the process. The Ministry acknowledged the importance of using valid and reliable measurements of productivity however, and agreed to examine the would-be implemented measures’ psychometric qualities only after their implementation (specifically, after one year). Although minimising the use of suggested measures was generally accepted by MOITAL, the importance of certain sources of data 112

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Table 6.1: General guidelines for the revised SMW assessment process: expert committee suggestions and MOITAL’s response Experts’ suggestions

MOITAL’s response

Transparent process: both the employer and the employee are entitled to be informed of each step of the assessment process and its outcomes.

Partial acceptance (+-)

Collaborative process: the employee, the employer and the assessor should be equal partners and work collaboratively.

Rejection (-)

Measure productivity in a specific context: a given employee’s productivity should be measured in a specific job and workplace.

Acceptance (+)

Refrain from data collection on behaviors, motivations and personality, etc.: SMW assessment should be based on measures of productivity only.

Acceptance (+)

Use valid and reliable tools to measure an employee’s productivity

Partial acceptance (+-)

Minimize the use of subjective measures

Partial acceptance (+-)

Conduct timely surveys of customary wages in various jobs

Partial acceptance (+-)

Conduct a pilot of the new assessment process

Rejection (-)

Create a protocol for unique cases

Acceptance (+)

Bar the use of SMW assessments in order to lower an employee’s wage

Rejection (-)

was stressed, such as a functional report by the job placement worker. Finally, the Ministry agreed to conduct timely surveys of customary wages on a few sampled jobs only, jobs that are typically done by workers with disabilities. As Table 6.1 shows three suggestions were fully rejected by the Ministry mainly on grounds of cost. A closer look at the gap between the experts’ original suggestions, and the version that was accepted by the Ministry reveals ideological discrepancies between the two entities. While the experts attempted to promote a more equal rights approach to the process by way of preserving the dignity of the person with the disability, autonomy and subjectivity, the Ministry’s stance reflects an economic approach to disability which focuses on the impact of impairment on the ability to work (Lav, 2002). Noteworthy that, apart from the general guidelines for the revised SMW assessment process, the committee of experts submitted to the Ministry a general outline of a revised model to assess SMW which consisted of eight points. Most (five) of the experts’ recommendations were rejected by the Ministry, two recommendations were partially accepted and one was fully rejected. In January 2012 the Ministry stressed that it was in the midst of designing a bid based on the revised and unified model (Director of the Committee for Aiding Disabled Persons in the Labor Market, MOITAL, Mr Beni Fefferman personal communication, 26 January 2012). On January 2013 the Ministry of Economy (previously entitled MOITAL) announced that it is forced to temporarily refrain from further conducting SMW assessments on grounds of budget restraints (specifically, lack of funding because of 113

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the elections in Israel). Although a new budget was already established following the elections, according to the Ministry’s website, SMW assessments have not been resumed yet. To date, the SMW meeting protocols have not been released to the public. Instead, the Ministry’s website provides the public with a list of the ‘central meetings which were held in 2011’ which comprises of various meetings categorised by dates. The list does not provide any information as to the nature of the SMW committee, its composition or its mandate. Furthermore, merely government representatives are mentioned as participants in the first meeting. The content of the meeting is listed in general bullet points, for instance, ‘tasks for the next meeting were determined’. The last meeting of the committee shares the same title as the first meeting. The list of participants consists of government representatives which are mentioned by their full names and affiliation. There is also a mentioning of ‘2-professors’. No information is given about the content or outcome of the meeting (Committee for Aiding Disabled Persons in the Labor Market, MOITAL, nd). It is of note that verbatim protocols of meetings between MOITAL and other Ministries are provided in the same website.

The case of deinstitutionalisation and community living policies committee The core disability policy toward people with intellectual disability (ID) in most western countries is inclusion and community living (Emerson, 2004). This progressive policy is based on human rights principles (see the Convention on the Rights of Persons with Disabilities (United Nations, 2006)), but also on evidence-based practices. In the United States and in Western Europe, small community-based residential facilities are chosen over large congregated settings which are gradually downsized and shut down (Beadle-Brown et al, 2007; Kozma et al, 2009; Lemay, 2009; Mansell et al, 2007). The Israeli government has been interested in adopting similar policies preferring community-based programmes. The former Minister of Welfare and Social Services (MOLSA), Isaac Herzog, instructed the Division of Services for People with Intellectual Disabilities in the MOLSA to convene an international committee of experts in order to obtain evidence-based data and various opinions concerning Israel’s services as compared to other western countries. The panel which was held in June 2011 consisted of Prof Arie Rimmerman, Haifa University, Israel; Prof Gerard Quinn of the University of Ireland (Galway School of Law); Dr Joel Levy, former CEO of YAI Network, New York; Prof Peter Blanck of Syracuse University, New York; and Prof Meindert Haveman of TU Dortmund University, Germany. The committee’s coordinator was Dr Michal Soffer, Haifa University, Israel (see Blanck et al, 2011). The members of the committee learned that there were various and, at times, contradictory opinions and views on the subject of housing for people with ID. 114

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For example, AKIM (National Association for the Habilitation of Children and Adults with Intellectual Disabilities), believes that there is still a place for a variety of forms of living for persons with ID; however, the large facilities (me’onot) should be extensively downsized to house no more than 30–40 individuals. Bizchut (Israel Human Rights Centre for People with Disabilities) on the other hand, called for the closure of all large and segregated facilities in Israel, pointing out that future policy should be driven by values such as self-determination, choice and autonomy. The experts provided a comprehensive report as well as detailed recommendations for policy changes to the Ministry. The main recommendation was that Israel should ultimately and gradually close all the institutions for persons with ID and focus on creating community based services and housing for this population. There was a general agreement that the panel will recommence and conduct timely follow ups of the implementation of the policy. While the report was discussed within the Ministry it was not released to the public until September 2013 and was not implemented. The report was finally released by the new Minister of Welfare and Social Services in September 2013. It appears that the main reason for not releasing the report has been concern on the part of the administration that the report will demand major change in policy, in particular closure of institutions and establishing new priorities in respect to community based programmes. Finally, the report was presented and discussed publicly on 5 February 2014.

Discussion: lessons from Israel In this chapter we presented two cases of experts panels which took place in Israel during the year 2011. Both panels focused on the similar populations and addressed fundamental and important aspects of life. Both panels were summoned by the Israeli government, although they differed greatly in terms of their mandate and nature. The SMW committee was given a very specific and limited task, namely, to suggest a standardised method for SMW assessment. It is important to mention that SMW policies are extremely controversial. In the United States, for example, where such policies have existed since 1938, they have been denounced by disability rights advocates, legally challenged and it seems that they will be abolished in the future (Soffer and Rimmerman, 2013). The Israeli SMW committee comprised of disability scholars and practitioners who oppose SMW policies. Nonetheless, their task was to offer revisions to these policies rather than to voice a more fundamental issue, that is, whether these policies should be practised in Israel at all. Since this was a given (albeit, a major source for frustration for some), the experts, who were all trained in the help professions (social work, occupational therapy and psychiatry) attempted to revise SMW policies in such a way that they will reflect their professional values:

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first and foremost, dignity and worth of the person, respect for a client’s selfdetermination, and engaging in an equal and mutual partnership with the client. These values are also in accordance with a rights-approach to disability and a discourse of entitlement to rights. Noteworthy that, since the committee dealt primarily with technical aspects of the policy of which the stakeholders were not aware, they were not involved in the committee. All government representatives in the SMW committee were affiliated with the Economic and Research Administration (ERA) unit of MOITAL which also oversaw and implemented SMW policies. The task was given to the unit on a temporary basis until a designated unit for addressing competitive employment of persons with disabilities had been developed. Albeit that the ERA held its temporary appointment for over a decade. The ERA is directed by a labour market economist with a strong background in management. The staff comprises primarily economists and statisticians. Therefore, when presented with the task of implementing SMW policies, the ERA approached the task as they would any other economic issue. In other words, SMW was perceived first and foremost, as a labour market tool to incentivise employers so that they would be more keen to employ persons with disabilities. According to economic reasoning, since persons with disabilities who have a diminished work capacity produce less, it is only just that the employer pay for what he or she gets. Economic reasoning perpetuates a ‘rhetoric of need’ which differs substantially from a ‘discourse of entitlement’. According to economic thought, employers who hire persons with disabilities are considered benevolent and altruistic. According to a rights-based approach persons with disabilities have a right to be gainfully employed. Hence, what was perceived by the experts as a complex issue that involves questions concerning human rights and justice, was viewed by MOLSA government officials as a pure economic question with a simple solution: productivity should be assessed objectively and the wage should be determined accordingly. This also explains, perhaps, why stakeholders were not a part of this committee. The polar discourses of government versus experts were evident in the SMW panel’s discussions. It is intriguing that, even within the limited mandate, the experts have encountered such strong resistance to change. This chain of events ultimately led to a compromise, a revised model with superficial changes, which was never implemented (see Soffer and Rimmerman, 2013). In other words, regretfully the committee did not bridge the values and empirical gaps between the thinking of the panel and the thinking – or lack thereof – of the MOITAL staff nor provided a common framework for discussing their continuing disagreements and sharpening the focus of differences in values and priorities. The International Experts’ Panel on Community-Based Residences for Persons with ID differed from the SMW committee in several important ways. First, the former panel had a larger task at hand and a more extensive mandate from the Israeli government, compared to the latter committee. 116

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Second, as such, the residence committee comprised of international experts who held extensive and lengthy discussions with government officials from various Ministries, and with stakeholders. Stakeholders were involved here, unlike in the SMW committee, as this committee discussed fundamental issues and called eventually for major changes in the life of people with ID, their families and service providers. In addition, it suggested that major revisions in the allocation and budgeting of services, should take place. Third, the international committee of experts, unlike the SMW panel, was summoned by MOLSA, specifically, the Division of Services for People with Intellectual Disabilities, which is directed by a PhD in rehabilitation psychology and houses a staff of social workers and psychologists. In other words, the committee was asked to advise fellow professionals, unlike the SMW committee. In comparison with the SMW committee, it seemed that all of the participants in the Experts’ Panel on Community-Based Residences for Persons with ID shared a common interest. All the participants were knowledgeable in disability issues and policies, all were informed about disability rights and the concept of entitlement. Two of the experts are law professors while the other experts come from a social scientist background. The legal scholars presented a more theoretical approach to the issues at hand. The social scientists had a more pragmatic approach. Nonetheless, these slightly different approaches did not cause friction between the experts but rather enriched the discussions. The final report reflects both the moral and legal aspects of the issues at hand, that is, the values involved, such as questions of justice, self-determination, choice, as well as their translation into concrete, operational policies and actions. The experts did not agree upon one point: the maximum number of individuals that should reside in one apartment (the number reflects the essence of community based living). Some said four while others said six. While the experts agreed on the fundamental issues, what was extremely evident in the Experts’ Panel on Community-Based Residences for Persons with ID deliberations was that what MOLSA referred to as ‘community-based living’ differed greatly from what the experts, disability rights advocates and the scientific literature defined as such. It is plausible that this somewhat unpleasant surprise to the Ministry – which truly believed that it was actively implementing programmes which aligned with community based services – accounts for part of the reasons that the committee’s report was not made public until 2013. It is important to mention that this committee and its report support fundamental changes in Israeli services both in terms of structure and conception. This could partially explain the reluctance to share the report as well as to implement it. One can argue that Israel was not ready at the time for such progressive ideas. One can also perceive the report as criticising the current system which did not evolve with the times. Disagreement in the residence committee was also evident between family members and service providers on the one hand, and disability right advocates 117

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and the experts, on the other hand. Family members expressed their justified fears that the shutting down of the institutions will burden them tremendously. Although the experts clearly specified that in order not to cause such adverse outcomes, closing the institutions will take place only after appropriate community based services and supports had been put in place, the families still feared that extra burdens would fall on them. The meaning of ‘true choice’ was also challenged. While family members and service providers believed that choosing to stay in an institution or to move into one is a valid choice, disability advocates and the experts believed that true choice is reflected and exercised only in small residences (up to four or six household members). In other words, no one can truly choose to live in an institution, even if he or she stresses so (see Blanck et al, 2011). In spite of the promising starting point of the residence committee, compared with the SMW committee, ironically, the results were quite similar. The overall impression is that while the government has been prompt to establish the two committees, as well as to facilitate their operation, in both cases the government has been less transparent in releasing the reports and disseminating the recommendations. References Attorney General, 2003, Appointing public advisory committees and their ways of operation. Instruction 1.1502 (90.012) [in Hebrew], www.justice.gov.il/NR/ rdonlyres/5FAC8532-DAE0-4AE5-B591-FCB89CE37E56/0/11502.pdf Beadle-Brown, J, Mansell, J, Kozma, A, 2007, Deinstitutionalization in intellectual disabilities, Current Opinion in Psychiatry 20, 437–42 Blanck, P, Haveman, M, Levy, J, Quinn, J, Rimmerman, A, Soffer, M, 2011, Integrated community living for people with intellectual disabilities (ID) in Israel, Final report of an international committee of experts, Unpublished report submitted to the Israeli Ministry of Social Affairs and Social Services on 31 October Campbell, CC, 1998, Creating an angel: Congressional delegation to ad hoc commissions, Congress and the presidency 25, 2, 161–82 Cartwright, TJ, 1975, Royal commissions and departmental committees in Britain, London: Hodder & Stoughton Committee for Aiding Disabled Persons in the Labor Market, MOITAL (Ministry of Industry, Trade and Labor), 2011, RE: The Committee for Aiding Disabled Persons in the Labor Market’s response to the outline for the revised model for assessing sub minimum wage which was proposed by the committee of experts [in Hebrew], 23 November, Jerusalem: MOITAL Committee for Aiding Disabled Persons in the Labor Market, MOITAL (Ministry of Industry, Trade and Labor) (nd) Central meetings which were held in 2011 [in Hebrew], www.moital.gov.il/NR/exeres/6752A8A0-17D4-4888-8BC0AF4D1C3A6961.htm

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Dawood, S, Merajver, SD, Viens, P, Vermeulen, PB, Swain, SM, Buchholz, TA, Dirix, LY, Levine, PH, Lucci, A, Krishnamurthy, S, Robertson, FM, Woodward, WA, Yang, WT, Ueno, NT, Cristofanilli, M, 2011, International expert panel on inflammatory breast cancer: Consensus statement for standardized diagnosis and treatment, Annals of Oncology 22, 3, 515–23 Egeberg, M, Schaefer, G, Trondal, J, 2003, The many faces of EU committee governance, West European Politics 26, 3, 19–40 Ejzenking-Qana, P, 2004, How science & politics connect: The place of research institutions and think tanks in public policy designing processes around the world and in Israel [in Hebrew], Jerusalem: Jerusalem Institute for the Study of Israel Emerson, E, 2004, Deinstitutionalisation in England, Journal of Intellectual and Developmental Disability 29, 1, 79–84 Figura, Y, 2006, Effectiveness of public ad hoc committees for overall administrative reform in the government-public administration in Israel, Unpublished doctoral dissertation, School of Political Science, the Department of Public Administration, University of Haifa, Israel Figura, Y, 2011, Ad hoc public committees in Israel, Studies in the State’s Audit, 62 [in Hebrew], www.mevaker.gov.il/serve/contentTree.asp?bookid=589&id =156&contentid=&parentcid=undefined&sw=1024&hw=530 Gehring, T, 1999, Arguing, bargaining and functional differentiation of decisionmaking: The role of committees in European environmental process regulation, in C Joerges, E Vos (eds) EU committees: Social regulation, law and politics (pp 195–217), Oxford: Hart Ginsberg, WR, 2009, Federal advisory committees: An overview, Washington, DC: Congressional Research Service, www.fas.org/sgp/crs/misc/R40520.pdf Gornitzka, A, Sverdrup, U, 2008, Who consults? The configuration of expert groups in the European union, West European Politics 31, 4, 725–50 Halffman, W, Hoppe, R, 2005, Science/policy boundaries: A changing division of labour in Dutch expert policy advice, in S Maasen, P Weingart (eds) Democratization of expertise? Exploring novel forms of scientific advice in political decision-making (pp 135–52), Dordrecht: Kluwer Harari, E, 1974, Japanese politics of advice in comparative perspective: A framework for analysis and a case study, Public Policy 22, 4, 537–77 Harari, E, Hofnung, M, 1988, Advisory committees for policy in Israel in a comparative perspective [in Hebrew], State, Governance, and Public Relations 28–9, 39–75 Hemerijck, A, Visser, J, 2003, Policy learning in European welfare states, Unpublished manuscript, Universities of Leyden and Amsterdam, http://eucenter.wisc.edu/ OMC/Papers/hemerijckVisser2.pdf Iacoboaei, C, 2008, Shaping the European Research Area (ERA) policy: The role of expert groups in the ERA green paper and beyond, Unpublished master’s dissertation, School of Management and Governance, University of Twente, Netherlands, http://essay.utwente.nl/58987/1/scriptie_C_Iacoboaei.pdf

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Kozma, A, Mansell, J, Beadle-Brown, J, 2009, Outcomes in different residential settings for people with intellectual disability: A systematic review, American Journal on Intellectual and Developmental Disabilities 114, 3, 193–222 Lav, J, 2002, Conceptualizations of disability and the constitutionality of remedial schemes under the Americans with Disabilities Act, Columbia Human Rights Law Review 34, 1, 197–234 Lemay, RA, 2009, Deinstitutionalization of people with developmental disabilities: A review of the literature, Canadian Journal of Community Mental Health 28, 1, 181–94 MacRae, DJ, Whittington, D, 1997, Expert advice for policy choice: Analysis and discourse, Washington, DC: Georgetown University Press Mansell, J, Knapp, M, Beadle-Brown, J, Beecham, J, 2007, Deinstitutionalisation and community living – outcomes and costs: Report of a European study, Volume 2: Main Report. Canterbury: Tizard Centre, University of Kent Marchildon, GP, 2001, Royal commissions and the policy cycle in Canada: The case of health care, Public lecture at the Saskatchewan Institute of Public Policy, www.uregina.ca/sipp/documents/pdf/ssgm.pdf Renn, O, 1995, Style of using scientific expertise: A comparative framework, Science and Public Policy 22, 3, 147–56 Shalev, C, Hashiloni-Dolev, Y, 2011, Bioethics governance in Israel: An expert regime, Indian Journal of Medical Ethics 8, 3, 157–60 Soffer, M, Rimmerman, A, 2013, A comparative approach to revising sub minimum wage assessment policy: The case of Israel, Journal of Comparative Policy Analysis: Research and Practice 15, 2, 122–40 Soffer, M, Tal-Katz, P, Rimmerman, A, 2011, Sub minimum wage for persons with severe disabilities: Comparative perspectives, Journal of Comparative Policy Analysis: Research and Practice 13, 3, 265–86 United Nations, 2007, Convention on the rights of persons with disabilities, www.un.org/disabilities/convention/conventionfull.shtml Vickers, G, 1965, The art of judgment, London: Chapman & Hall Zegart, AB, 2004, Blue ribbons, black Boxes: Toward a better understanding of presidential commissions, Presidential Studies Quarterly 34, 2, 366–93

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Part Three Policy analysis in specific government units

SEVEN

Policy analysis in the treasury: how does the Israeli Ministry of Finance arrive at a policy decision?1 Momi Dahan

This article examines the process of policy analysis in the Israeli Ministry of Finance, which plays a central role in initiating, shaping and implementing economic policy. Previous studies showed that the Ministry of Finance has relatively greater power than finance ministries in most developed countries. The article describes three modes of policy analysis that are used in the Budget Department or on its behalf: in-house work, interministerial committees and public committees. An examination of the three modes of policy analysis indicates that the major weakness of policy analysis is more evident in the in-house work of the Budget Department, which does not systematically evaluate the expected effects of policy proposals on benefits and costs. A professional infrastructure has not been laid for using standard prediction techniques. The interministerial committees or the public committees do not work according to a fixed methodology, and the quality of their analytical work is therefore arbitrary, depending on the people heading the committee. A tradition of presenting a menu of alternatives to policy makers has not been found in all three modes of policy analysis that were researched here. In addition, the decision rule according to which the preferred alternative is chosen is unclear.

Introduction This article describes the policy analysis that is conducted in practice in the Budget Department of the Israeli Ministry of Finance, and compares it with decision making in the spirit of bounded rationality model proposed in standard textbooks on policy analysis, such as Weimer and Vining (2011), Bardach (2011) and Dunn (2012). This model includes a clear formulation of the undesirable phenomena, problem definition, presenting a limited number of alternatives, and evaluating them according to a limited number of major criteria, and evaluation research that accompanies the policy. The importance of an analysis of this kind is that it forces the policy analyst and the decision makers to pass through key stations, thereby reducing the chances of making bad decisions. A standard policy analysis makes it possible to see also whether the overall expected benefits exceed the costs, while explicitly taking into account the risks. 123

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Such policy analysis should also reveal the theoretical assumptions underlying the policy proposals, initially for the policy analyst, then for the decision makers, and finally for the public at large. Proper policy analysis should also include an assessment of the expected effects based on the most advanced techniques. We need to bear in mind that the impact of a policy alternative for reducing the undesirable phenomena will only be put to the test in the future, and in this respect is a policy hypothesis. In other words, policy implementation is bound up with risk, which should be revealed to the public. With the passing of time, public policy issues become more complex, which highlights the necessity for a high quality of policy analysis. The importance that is currently attributed to the public policy implications on environmental quality, as opposed to the scant attention this issue received in the past, demonstrates the intensification of the interdisciplinary dimension of policy issues. At the same time, the ability to respond to policy issues by means of increasing the budget has been severely reduced. Taxes in developed countries rose to relatively high rates in the twentieth century in the wake of the considerable expansion in the government’s share of GDP (Tanzi and Schuknecht, 2000). The price of a further increase in the tax rate relative to the benefit from additional expansion of government expenditure has risen significantly since the beginning of the twentieth century, and thus the political feasibility of solutions that entail large budgetary expenditure has dwindled. The government’s ability to further increase the tax rate has decreased also because of the continuing process of ‘the individual in the centre’, which is reflected, among other things, in a rise in the value of (individual) freedom relative to the value of (social) equality, which erodes the public’s willingness to bear the burden of a higher tax. Under these conditions, the policy analyst has to provide creative alternatives that do not require a (significant) additional budget. Because of budgetary pressure, the public demands, more than in the past, assurance that its money will be used as efficiently as possible. This cannot be achieved without high-quality policy analysis. In the twenty-first century, the public demands also greater transparency from its government. One of the expressions of the demand to increase transparency in Israel is the requirement to publish the minutes of the committees that dealt with major policy issues, such as the Trajtenberg Committee for socioeconomic change, or the Zemach Committee dealing with the export of gas. The public is interested not only in the final product (the committee’s report), but also in the considerations that guided the decision makers. It can be assumed that the demand for transparency (overt policy analysis) will only intensify in the foreseeable future. Policy analysis that fulfils the fundamental requirement for transparency allows to see the distinction between evaluations and values. While the professional echelon is responsible for evaluating policy proposals, the values and their ranking are meant to be supplied mainly by the elected sector, even though in practice the professional staff plays a role in this area as well. Without standard policy analysis, one cannot learn whether a particular policy tool is preferable to other alternatives 124

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because of differences in professional evaluations or because of differences in the weight given to certain values over others. Given the central role that the Ministry of Finance in Israeli policy-making, it is important to assess the degree to which the Budget Department deviates from the process set out in standard policy analysis. The structure of the article is as follows: the next section will describe the centrality of the Ministry of Finance in policy analysis in Israel, following which we will present three different modes of conducting policy analysis in the Budget Department and on its behalf. In the third section we examine policy analysis in terms of the standard model of policy analysis with the help of three significant recent events: the 2013–14 state budget with particular emphasis on cutting child allowances, the interministerial committee for reducing greenhouse gas emissions (the Shani Committee), and the report of the public committee for examining the fiscal system with regard to oil and gas resources in Israel (the Sheshinski Committee). We conclude the article by presenting several hypotheses for explaining why such policy analysis is conducted in the Budget Department.

The centrality of the Ministry of Finance in policy analysis Since the stabilisation plan of 1985, the professional staff in the Ministry of Finance has played a key role in initiating, shaping and implementing economic policy. The analysis and initiation of policy takes place in the government and outside it (the Third Sector and the business sector), but the dominant player in policy analysis is without doubt the Ministry of Finance. The Budget Department is the most lively place in the ministry, even though other departments, such as the Capital Market Department or the State Revenue Administration also conduct policy analyses. This article will focus on describing the work of policy analysis that is conducted in the Budget Department of the Ministry of Finance.The influence that the non-elected officials in the Ministry of Finance wield is no less than that of the political officials. Ben-Bassat (2011) showed that there is very little chance that economic reform will be implemented without the agreement of the professional staff in the Ministry of Finance. Non-elected officials in the ministry do not hesitate to provide the media with economic-policy declarations that are supposed to be reserved for politicians. In research on the balance of forces in the budgeting process, Ben-Bassat and Dahan (2006) showed that the extent of centrality of the decision making process in Israel is among the highest in the western world. The research found that the Ministry of Finance has a major role in all stages of the budgetary process: preparation, legislation and implementation of the budget. The strong position of the Ministry of Finance is also a function of the existence of the Arrangements Law, which includes a package of laws that accompany the state budget.2 The budget and the Arrangements Law are voted on together, so that non-ratification of the budget and the Arrangements Law in one package brings down the government and leads to new elections. The power of this tool 125

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encourages the Ministry of Finance to avoid presenting bills through the regular parliamentary channel. The Arrangements Law includes a mix of legislative amendments with budgetary implications for and structural changes in (not necessarily with budgetary consequences) the economy. While the initiation of legislative amendments dealing directly with the budget are mainly the result of the inhouse work of the Budget Department (in conjunction with other departments in the Ministry of Finance), the structural changes are based partly on previous work of interministerial committees or public committees.

Conducting policy analysis in the Ministry of Finance Three modes of policy analysis There is no single method according to which the Budget Department in the Ministry of Finance conducts policy analysis. For some of the policy issues the analysis is conducted by the employees of the Budget Department through informal consultation with external factors. For other issues the Budget Department works jointly with the relevant government ministries, informally or in the format of an interministerial committee. In addition, the Ministry of Finance makes use of the policy analysis of public committees, such as the committee for examining the fiscal system with regard to oil and gas resources in Israel (the Sheshinski Committee), or the committee for socioeconomic change (the Trajtenberg Committee), which include senior representation of the Budget Department. In certain cases, the analysis is undertaken by a private entity (outsourcing), such as cost–benefit analysis in transportation projects. It would appear that the Ministry of Finance decides whether to conduct the policy analysis in-house or to conduct it with the help of an interministerial committee, a public committee, or outsourcing, according to the level of maturity of the policy issues and the extent of their expected political feasibility. In general, the Ministry of Finance is not in favour of public committees, as evidenced by the resignation of the Ministry of Finance’s director-general Haim Shani, in the wake of the establishment of the Trajtenberg Committee. From discussions with people in the Budget Department it seems that the use of a public committee is reserved primarily for policy issues that have not been sufficiently analysed or researched, or whose expected political feasibility is low. Sometimes a public committee is used in order to circumvent opposition on the part of the relevant designated ministry, or as a way to obtain a decision in the event of a professional disagreement with the designated ministry. It will be interesting in a future research to examine what factors influence Ministry of Finance choices regarding preferred mode of policy analysis.

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Profile of the professional staff in the Budget Department The Budget Department in Israel employs about 50 professionals, a small number relative to budget departments in developed countries (Ben-Bassat and Dahan, 2006).3 All the professional employees are economists, relatively young (in their late 20s or early 30s) with a bachelor’s or master’s degree in economics. In recent years priority has been given to recruiting economists with a broader education, such as a joint bachelor’s degree in economics, philosophy and political science, or a master’s degree in public policy. This trend reflects the understanding that economists with a broader education need to be recruited in order to deal with the increasing complexity of policy analysis. Note that since the end of the 1970s, recruitment to the Budget Department is based solely on qualifications, irrespective of political affiliation. The Budget Department has undergone changes also regarding the composition of its employees. In the past there were hardly any women in the department. In 1992 one woman was employed, as opposed to nearly 50 per cent today. Nevertheless, the Budget Department still has a long way to go in absorbing economists from certain population groups, such as the Arab population that numbers close to 20 per cent of the Israeli population. Up to the 1990s, Arabs were not employed in the Budget Department. In recent years the government is making an effort to absorb Arabs in the public service, but in practice the ranks of the Budget Department at any given time do not include more than one Arab economist. Recently (2013) a female economist from the Arab sector started working in the department. These employees are recruited following a meticulous screening process (more than ten applicants for each available post), and are considered to be the professional elite of the Israeli civil service. There are no economists in the Budget Department whose job is to conduct systematic predictions of the expected effects of a policy proposal by using advanced estimation techniques, or being in charge of commissioning such forecasts from external bodies. There are also none whose job entails the retrospective evaluation of the effect of policy tools that were used, or to systematically commission evaluation research of this kind. Naturally, an organisation consisting of 50 economists believes in a free market economy as a central guiding principle. The Ministry of Finance is perceived by the public as a bastion of the neoliberal camp. One of the primary aims of the Budget Department is to strengthen the market foundations of the Israeli economy. This is expressed in two major ways: first, a constant striving for structural changes in non-competitive markets; and second, a reduction in government involvement. In recent years, Budget Department economists are becoming increasingly more diverse in their views regarding the need to reduce government expenditure on education, health and welfare.

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Analysis of the Ministry of Finance’s policy from the perspective of a standard model of policy analysis The following description of policy analysis in the Budget Department will be restricted to the time between the emergence of the issue on the institutional agenda and the date the decision is adopted by the government (the formulation stage). Due to space constraints, we will not be able to deal with the stages prior to the emergence of the issue on the agenda, or the stages following the government’s approval, such as the discussion in the Knesset and subsequently (the implementation stage). The mode of operation of the Ministry of Finance will be compared to the standard stages of policy analysis. The standard policy model (in the spirit of bounded rationality) includes: (a) a clear formulation of the undesirable conditions (conditions that many people consider to be undesirable) that may be reflected in a gap between the current and the desired conditions, a substantial diminution of the public’s welfare or an unrealised opportunity to improve the public’s welfare or promote important values; (b) a clear definition of the problem backed by the best information/research on the theoretical and empirical scientific shelf; (c) a close affinity between the definition of the problem and the proposed alternatives, supplemented by theoretical or empirical backing elucidating the connection between the alternatives and amelioration of the problem; (d) examining a limited number of alternatives while analysing the expected effects of each alternative on the major variables, such as the major benefits (reducing the undesirable phenomena), the budgetary cost and political feasibility; (e) the decision rule according to which the recommendation of the alternatives was accepted; and (f) a parallel plan of follow up and retrospective evaluation. The work of the Budget Department will be compared with the above methodology with the help of policy analysis that the Budget Department itself or external bodies conducted on three macro events of recent years: the state budget for 2013–14 with particular emphasis on the cut in child allowances; the interministerial committee for reducing greenhouse gas emissions (the Shani Committee); and the report of the public committee for examining the fiscal system with regard to oil and gas resources in Israel (the Sheshinski Committee). An examination of the three modes of policy analysis will facilitate internal comparison of three types of policy analysis. It is important to note that in the policy analysis work of the Ministry of Finance, no attempt has been made until now to document the frequency of each of the three policy analysis modes. Examination of the three modes is based on available information. The information is not always fully presented to the decision makers and to the public, whether because of time constraints or because of the political unease that full presentation of the information may create for the Minister of Finance or the professional staff in the Ministry of Finance (we will return to this issue in the concluding section of the article). At the same time, we reiterate that the government makes its decisions according to the same information on which 128

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this article is based. The low level of transparency of the (ex-ante) information at the time of making decisions on economic matters is well known, as opposed to the high level of transparency of budgetary ex-post information (Ben-Bassat and Dahan, 2006). Even though I did not enjoy access to the analytical work that was conducted behind the scenes, I was assisted by discussions with people at the professional level of the ministry in order to complement information that was essential for the precise description of the policy process. In-house policy analysis: the state budget for 2013–14 On the eve of the last Knesset elections, budget execution data for December 2012 was published, from which it emerged that the budgetary deficit for 2013 was expected to reach about 50 billion shekels, which is 5.1 per cent of GDP. Among the members of the new government that was established after the elections (as well as outside it) there was broad agreement that the budgetary deficit should be reduced. The fear was that not dealing with the large budgetary deficit could undermine macroeconomic stability and lead to a rise in the interest rate of government bonds. The government was required to make two decisions, the first on the size of the budgetary deficit target, and the second the mix of the reduction in expenditures and raising the tax rate. Because of space limitations, I will not consider in this article the government’s decision to reduce the budgetary deficit to 4.65 per cent of GDP in 2013, and to 3 per cent of GDP in 2014; rather I will concentrate on the policy analysis regarding the expenditure–taxes mix in achieving the specified deficit. In general, the Budget Department in the Ministry of Finance could have prepared various alternatives ranging from only a cut in government expenditure in order to achieve the deficit target, to only an increase in taxes, as well as a combination of cutting expenditure and raising the tax rate. Each of the alternatives would have various implications on major variables, such as economic growth and inequality. Thus, for example, in Keynesian terms, the negative impact on output of cutting government consumption on aggregate demand is more severe than raising taxes. It is also clear that raising taxes (particularly income taxes) has a different impact on the extent of inequality compared with a cut in welfare or education expenditures.4 From discussions with people who were involved in the process, it emerges that the Budget Department presented various alternatives to the Minister of Finance, but without systematic analysis of the expected effects of each of the alternatives on the rate of GDP growth or poverty and inequality in the following two years. The discussion with the minister on the assumed effects of the alternatives was little more than intuitive. Due to lack of information, it is not even possible to say what decision rule the Minister of Finance used to decide between the alternatives. From the perspective of policy analysis, the discussion on the state budget that subsequently took place in the government was even worse. The Ministry of 129

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Finance presented only one alternative, and without a description of the expected effects. The government approved the draft budget almost without amendments. No government member even requested discussing other alternatives. In order to demonstrate the defects in the policy analysis that are particularly conspicuous in budgetary decisions, I have chosen to analyse one particular issue from the Arrangements Law accompanying the state budget for 2013–14, namely, child allowances.5 Based on the explanations for child allowance cuts in the Arrangements Law, I shall describe one of three modes of analysis employed by the Ministry of Finance Budget Department. This issue was chosen for two additional reasons. First, this is a change with substantial budgetary significance. The cut in child allowances constitutes about 30 per cent of the overall cut in government expenditure for 2014.6 Third, this step has macro-social implications as will be made clear below. As part of the steps to reduce the budgetary deficit, it was decided to cut the child allowances budget from NIS 7 billion in 2012 to NIS 4 billion in 2014. As a result of the cut, a family with three children (the standard family size in Israel), will incur an income reduction of about NIS 300 a month, which is 7 per cent of the minimum salary or 3.3 per cent of the average salary in Israel. This proposal demonstrates one (frequent) pattern of policy analysis in the Budget Department. First, the proposal is the exclusive product of the Budget Department, without being preceded by systematic policy analysis in the Ministry of Finance or outside it. The central undesirable phenomenon the Ministry of Finance is interested in reducing is well defined. A clear formulation of the undesirable conditions, as they are perceived by the professional staff, generally characterises the policy analysis work of the Budget Department. This step, in conjunction with others, reduces the large budgetary deficit, and thus also the fear that macroeconomic stability will be undermined (the policy hypothesis). The proposal to reduce child allowances might not have seen the light of day had the political composition of the Knesset and the government not changed. The Knesset elections that took place on 22 January 2013 led to a change in the composition of the government. A new party, Yesh Atid [there is a future], which championed increasing the participation of the ultra-Orthodox population in the military and the workforce, entered the government and replaced the ultraOrthodox parties that were previously in the coalition. The leader of Yesh Atid, Yair Lapid, was chosen as Minister of Finance, and we can thus see clearly the close connection between the definition of the problem (child allowances are too high) and politics (the ultra-Orthodox population will be more adversely affected because they have many children), as we learned from Stone (1998). Support for this hypothesis can be found in Yesh Atid’s major initiative to require young ultra-Orthodox men to enroll in the army, like other young Jews in Israel. The definition of the problem also matches the views of the professional staff in the Budget Department, a viewpoint that gives greater emphasis to the value of freedom over that of equality. This worldview relates negatively to government support for low-income earners, and particularly those populations that have low 130

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participation rates in the labour market, such as the ultra-Orthodox and the Arabs. According to this view, government support adds to the tax burden and suppresses the incentive of allowance recipients to work, or is given to those who are not worthy of support. As a result, taxes adversely affect the economic incentives to work, invest and invent. To this one could add also child allowances’ potential effect of increasing the number of children in poor families. This viewpoint in conjunction with the political change created a suitable climate for reducing child allowances, as could be predicted by Kingdon’s policy stream framework (1995). An analysis of the assumed effect of policy proposals on major variables is an essential component, but is uncommon in the routine work of the Budget Department. This is one of the weaknesses of the policy analysis of the Budget Department. The proposal to cut child allowances clearly demonstrates this disadvantage. It cannot be claimed in this case that this is a step whose macro-social significance is negligible and that there is no point in evaluating the expected effect. Nevertheless, there is no evaluation of the expected effect of cutting child allowances on the dimensions of poverty or the participation rate in the labour force. It is hoped that this is not a case in which an evaluation of this kind was undertaken, but was not presented to the government, which voted on the state budget and the Arrangements Law. There is no doubt that predicting the expected effect of a policy step is one of the most difficult stages in policy analysis. Projection of the expected effect requires expertise in technical tools and coping with uncertainty. Various techniques of forecasting the consequences of a policy step exist, ranging from extrapolation to theoretical models that take behavioural changes into account, and to experts’ forecast (Dunn, 2012). It is unclear how a policy proposal can be justified without taking into consideration the social cost.7 Two weeks after presenting the state budget and the Arrangements Law for government approval, a report prepared by the National Insurance Institute (which is officially in charge of measuring poverty in Israel) was leaked. According to this report, in the wake of the cut in child allowances, the number of poor people will grow by about 90,000, about 1 per cent of the Israeli population, and as a result the overall poverty rate will grow by 3 per cent. This report is mentioned here in order to draw attention to the existence of an institution that regularly conducts such predictions, but whose capabilities were not made use of.8 The Budget Department in the Ministry of Finance could have predicted the effect of reducing the child allowance on the expected extent of poverty, or have used the services of the National Insurance Institute, but it did not do so. Such forecasts could have adversely affected the political feasibility of cutting the child allowances. From a democratic perspective it is improper to abstain from conducting an analysis or concealing it in order to increase the chances of promoting a policy proposal. Alternatively, abstaining from conducting an evaluation could be due to the extent of the accompanying uncertainty, even regarding the direction of the effect (and not only its intensity). Recall that according to the prevalent belief in the Budget Department, a cut in child 131

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allowances could reduce poverty if the work supply of allowance recipients grows and the number of children decreases. Policy analysts relying on unsubstantiated beliefs, however, are no different from people in ancient times that provided weather forecasts on the basis of superstitions. From discussions with people who were involved in formulating the 2013–14 Budget, I learnt that various alternatives for cutting child allowances were presented to the Minister of Finance, but were not presented to the government. It is unclear what criteria the Minister of Finance employed in examining the alternatives, and what decision rule he used to decide between the alternatives. On the basis of the available information, one cannot ascertain what decision rule the Ministry of Finance used when it decided between two alternatives, one of which is preferable according to one criterion (for example, efficiency), but is inferior to a second alternative according to another criterion (for example, inequality). With all due caution, it seems that no systematic decision rule guides the decision makers in choosing an alternative that is presented to the government. Policy analysis by an interministerial committee: the national programme for reducing greenhouse gas emissions (the Shani Committee) Policy analysis in the Ministry of Finance is also delegated to interministerial committees that it establishes from time to time to examine a specific policy issue. Considerable variance exists between interministerial committees in terms of the importance of the policy issues they examine, and also their working methods. In reality, there is no uniform methodology according to which the interministerial committee examines the policy issue. Exploring this mode of policy analysis is based on one interministerial committee that formulated a national plan for reducing greenhouse gas emissions. The committee was chosen for two reasons. First, the Ministry of Finance initiated the establishment of the committee. Heading the committee was the then directorgeneral of the Ministry of Finance, Haim Shani, and two representatives of the Budget Department played a central role in the energetic efficiency subcommittee. Second, the committee dealt with an issue that has macroeconomic implications. As above, we examine the work that has been done by comparing the committee’s report with standard policy analysis. The government established this committee in March 2010 against the backdrop of President Shimon Peres’s declaration at the United Nations Framework Convention on Climate Change that took place in Copenhagen at the end of 2009. The president declared that Israel would strive to reduce the volume of greenhouse gas emissions by 20 per cent by 2020 relative to the business-as-usual scenario. The analysis itself was not conducted only by people in government. As opposed to the in-house work of the Budget Department, the committee’s policy analysis work was accompanied by a team from the Samuel Neaman Institute (an independent NGO) headed by Ofira Ayalon, assisted by Lior Shmueli from 132

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EcoFinance. In other words, the policy analysis was partially conducted through outsourcing under the supervision and responsibility of governmental bodies. The analysis was preceded by the work of McKinsey & Company for the Ministry of Environmental Protection. Before we examine each of the policy analysis stages of the section of the report dealing with energetic efficiency (because of space constraints we will not consider the other parts of the report), it should be said that the committee conducted a policy analysis that is quite close to the methodology of systematic policy analysis. The undesirable phenomenon of global warming due to greenhouse gas emissions, which constituted the background to the establishment of the committee, is clear and well-defined. The committee was not required to define the phenomenon, but rather, mainly, to define the problem. The committee defined the problem in terms of government failures (the coordination between governmental bodies due to the multiplicity of the bodies and conflicting interests), and market failures, such as restricted access to credit and a lack of information which act as barriers to reducing greenhouse gas emissions. The committee’s report does not present empirical backing for the problem definitions that were chosen. It does not provide information regarding the extent of the problem of limited access to credit, as a result of which consumers avoid the beneficial replacement of energy inefficient electrical appliances. There is also no information in the report on how unaware or unknowledgeable consumers are about the benefits to be gained from replacing their energy inefficient electrical appliances. The solution that a policy analyst proposes can tell us what is the implicit problem definition. The solutions that the committee suggests for reducing greenhouse gas emissions, implies two different problem definitions: externalities and lack of knowledge. Note that it ignores government failures that the committee pointed out as potential problem definition in the introduction. The problem of limited access to credit market that the committee presented is hardly even considered, except indirectly and on the margins, as is evident in the seven suggested policy proposals. The use of the word solutions and not alternatives is intentional. The committee does not suggest several alternatives to the policy makers, from which the preferred alternative is to be chosen. The committee proposes implementing simultaneously all seven solutions, including imposing a prohibition on the use of electrical appliances below a certain threshold of energetic efficiency, subsidising the scrapping of old electrical appliances, and subsidising energy surveys in large organisations.9 The report is adamant that all the solutions should be implemented simultaneously, because each policy recommendation reinforces the other. However, there is no backing for this assertion in the report. Furthermore, the report does not consider the adverse effect on political feasibility that arises from all seven policy proposals. The budgetary feasibility emerged later as an effective barrier. In the Arrangements Law for 2013–14 (p 234), the Ministry of Finance

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included a clause that postpones the implementation of the national plan for reducing greenhouse gasses to 2016 – because of budgetary considerations. The absence of alternatives is a salient characteristic of all three types of policy analysis that are conducted in the Ministry of Finance, as we saw in the analysis of the cut in child allowances, and as appears below in the policy analysis of a public committee. In the absence of alternatives, the policy makers are restricted to either accept or reject the suggested policy proposal. In our personal lives we would not be satisfied with one alternative when we consider purchasing a television. Clearly, examining several television sets will lead to an informed decision. This is not the working routine of policy analysis in Israel. One of the favourable prominent features of the committee’s policy analysis is the presentation of the expected effects of the proposed solutions on the major variables over a decade, such as greenhouse gas emissions, the benefit to the economy, and the budgetary cost. The committee estimates that the emission of greenhouse gasses will decrease by 2020 by the equivalent of about 16 million tons of carbon dioxide, a decrease of 15 per cent relative to the business-as-usual scenario. The cumulative budgetary cost of suggested policy proposals will be about NIS 2.2 billion, and the net expected economic benefit to the economy will be about NIS 34 billion. There is a widespread undesirable tendency in policy analysis in Israel to conceal the knowledge limitations of the policy analysts. This report deviates from this defective rule. The writers of the report are aware of their knowledge limitations and indicate explicitly on page 27 that: ‘We cannot know what the impact of supporting the above rate (the 20 per cent subsidy) on consumers’ behaviour will be. It is important, therefore, to track the effect of the policy step’. The committee also conducted a sensitivity analysis of these predicted effects in light of the uncertainty regarding the price of electricity and other parameters. Moreover, the committee proposes a defined mechanism and a time schedule for implementing the recommendations, and also the cost of operating the mechanism. The committee is aware of the need for an accompanying plan for monitoring and evaluating the policy proposals, even though it does not propose this explicitly nor does it budget evaluation research. As mentioned above, an analysis of the policy of the interministerial committee does not propose alternatives, and it is therefore not possible to ascertain what decision rule the Ministry of Finance uses to decide between alternatives. Implicitly, this working mode is consistent with the lexicographic rule that gives priority to the efficiency consideration (in its deeper meaning – Pareto efficiency) over other considerations. There is one place in the chapter on energetic efficiency where the compilers of the report propose a solution and disqualify it, which is to involve the Electric Corporation (the electricity dominant supplier in Israel), with the encouragement of the consumers, to develop efficient ways of consuming electricity. This solution was disqualified because of the monopolistic power of the Electric Corporation that would discourage the introduction of new players in the energetic efficiency market. 134

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Policy analysis of a public committee: taxing oil and gas profits (the Sheshinski Committee) The appointment of a public committee is an additional mode of policy analysis in the Ministry of Finance. As mentioned above, the Ministry of Finance tends not to make frequent use of this tool because of the fear of losing control. In order to demonstrate policy analysis by means of a public committee, we will use the Sheshinski Committee that was appointed in April 2010 and charged with examining the fiscal system (taxation, royalties and fees) with regard to gas and oil resources.10 This committee was chosen as a test case for this article because it was appointed by the Minister of Finance who apparently could have relied on the in-house work of the Budget Department in consultation or in collaboration with other government ministries. Chosen to head the committee was Eitan Sheshinski from the Hebrew University of Jerusalem, a well-known economist. Five senior government officials worked alongside him in the committee, including the director of the Budget Department at the time, Udi Nissan. The working mode of the committee was totally different from the policy analysis that was conducted in the Budget Department. The committee opened its doors to the public at large and to interested bodies, such as gas and oil exploration companies, to present their views prior to the committee’s having formulated its conclusions. This is in contradiction to the proposal to cut the child allowances that was arrived at without any input from the public or bodies outside the government or from government institutions such as the National Insurance Institute. The committee was not content with exclusive reliance on in-house work, and commissioned two professional opinions from well-known experts (Daniel Johnston and Robert Pindyck), which can be seen as a type of partial outsourcing of policy analysis. The Sheshinski Committee invited any interested party to present its positions again after the presentation of the interim recommendations in November 2010. Already in the letter of appointment we can discern a broad hint of the major undesirable development that the Ministry of Finance wished to limit, which was also the major reason for establishing the committee against the backdrop of the large gas discoveries. In terms of the existing laws, the committee concludes that the public does not obtain an appropriate share of the profits that will be gained from the gas discoveries along Israel’s shores. The professional staff in the Ministry of Finance that participated in formulating the letter of appointment clearly defined the undesirable development, in the same way as in the case of the child allowances and greenhouse gas committee. The letter of appointment provides signs of the definition of the problem in terms of the incompatibility of the fiscal system (taxation, royalties, and fees) that were determined back in 1952, with the present circumstances. In practice, the committee’s final recommendations, which were presented in January 2011, did not deviate from the problem definition that was outlined in the letter of appointment. The recommendations included a series of proposals for changing the fiscal system, the major one being the imposition of a designated 135

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tax rate of between 0 and 50 per cent, depending on the actual rate of profit. The committee does not present alternatives to the decision makers in the report, but rather indicates that alternatives were considered and rejected, such as raising the rate of the royalties. Because alternatives were not presented to the decision makers (by means of the committee’s report), we cannot assess what criteria the committee members used to choose the proposed alternative. We note here that avoidance of presenting alternatives to the government is characteristic of policy analysis in the Ministry of Finance, as we saw above in the analysis of the proposal to cut child allowances and of the greenhouse gas committee. An analysis of the expected effects of the committee’s recommendations could provide a partial picture of these criteria. As opposed to the cut in child allowances, the committee’s report includes a detailed analysis of the predicted effects of the policy proposals. The forecasts include an assessment of the effect of the new fiscal system on the government’s share in the gas resources that are discovered, which is a response to the major undesirable development. This is an essential component in a standard policy analysis. According to the committee’s predictions, the public’s share will increase from a third to between 52 and 62 per cent in the wake of the implementation of the recommendations to change the fiscal system. The report also presents the expected effect of the recommendations on the internal rate of return (IRR) and on the cash flow of the gas fields under different assumptions of the rate of profitability, in order to ensure that the incentive to search for new gas fields and develop existing ones will not be adversely affected. However, the important implication for the economy, such as the effect of the taxation addition on the price of the natural gas to consumers was not examined.

Explaining modes of policy analysis A comparison of the three modes of policy analysis with the standard typical textbook model shows that the major weaknesses of policy analysis are more prominent in the in-house work of the Budget Department. There is no tradition in the in-house work of predicting the expected effects of policy proposals on a variety of benefits and costs (financial and other). In practice, a professional infrastructure has not been built that is equipped with standard prediction techniques to estimate policy proposals’ prospective effects. The interministerial committees or the public committees do not work according to a uniform methodology, and thus the quality of the analytical work is random, depending on the people heading the committee. The analytical work of the committees is better than that of the in-house work. There is no tradition in any of the three modes we examined of presenting a menu of alternatives to decision makers, and in any event the decision rule according to which the best alternative is chosen is unclear. In practice, it seems that policy analysis consists of one criterion (budget or efficiency) in terms of which the proposed alternative is chosen. 136

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The committees that have been established over the years to propose amendments to the working methods of the public administration, the most prominent being the Kubersky Committee for public administration reform that presented its recommendations in 1989, reflect dissatisfaction with the absence of systematic policy analysis. The recently completed work of the Governance Committee (headed by the director-general of the Prime Minister’s Office, Harel Locker, and the Civil Service Commissioner, Moshe Dayan) also voices dissatisfaction that underlie its recommendations for improving the working method of the professional staff in Israeli administration. This committee focused on the balance of forces between the strategic ministries such as the Ministry of Finance and the policy area ministries such as the Ministry of Education, and recommended, among other things, enhancing forecasting transparency regarding the expected effects of government decisions on the budget. However, implications for policy goals were not discussed. As we have already indicated, the budgeting process in Israel is more centralised than in most developed countries. The (excessive) power of the Budget Department in the decision making process is partly responsible for the absence of systematic policy analysis. A powerful body has less need to justify policy proposals to other participants in the decision making process, and therefore policy analysis bodies of this kind are not created at all or atrophy if they existed previously. In recent years there are signs of erosion in the relative power of the Ministry of Finance because of the public’s active participation, especially in the wake of the social protest in the summer of 2011. The erosion of the Ministry of Finance’s power is also a result of the greater involvement of the Prime Minister’s Office in the shaping of economic policy and in consolidating changes to the decision making process. One of the manifestations of this is the establishment of the National Economic Council in the Prime Minister’s Office (in September 2006) and its greater involvement in shaping economic policy. The establishment of interministerial and public committees can possibly be seen as de facto recognition of the limited policy analysis capability of the inhouse work of the Budget Department. A public committee provides a higher quality of policy analysis. Indeed, analysis quality appears to be improving over time, although more research is required to confirm this. Under these conditions, in conjunction with the erosion of the power of the Ministry of Finance, we expect an increase in the number of committees of this kind in policy analysis. In the future the Budget Department may play a more active role in initiating committees of this type, and will see its role as a body that works to promote policy analysis conducted under the auspices of public committees. The relative absence of systematic policy analysis in the budget department could be explained – perhaps even justified – with reference to three factors: extreme instability of the policy environment; the need for ‘constructive ambiguity’; and the short timeframe for policy making. First, Israel is exposed to greater uncertainty than typical developed countries. This is reflected both in the relatively sharp fluctuations in GDP compared with European countries or the United States. Since its establishment, Israel is under security threat, a situation 137

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that does not encourage long-term planning, policy analysis and retrospective evaluation. It is not surprising that a tradition of planning and policy analysis has not developed, as researchers of public administration have pointed out (Dror, 1968; Geva-May and Kfir, 2000). Under such conditions, the allocation of resources for predicting the expected effect of policy proposals seems almost a waste of resources, because a sudden war or unexpected mass immigration makes a mockery of any forecast. Indeed, in Israel’s early years there was even an immediate fear of whether the country would continue to exist. Improvisation, and not planning, became the accepted working tool for coping with the uncertainty. Over the years the uncertainty has decreased, as is reflected in the sharp decrease in the standard deviation of the GDP growth rate from the establishment of the state until today. Despite this, improvisation, which became part of the DNA of the Israeli society, still also characterises part of the working modes of the Budget Department. Possibly the professional infrastructure of the Budget Department was built on the foundation of the considerable uncertainty, in which it is inappropriate to place forecasts on the government’s table of the expected effects of policy proposals, which is an essential part of planning and policy analysis, or to conduct an evaluation research of adopted policy tools. The way policy analysis is done in the Budget Department could be also a consequence of constructive ambiguity designed to lower the tone of arguments in a society riddled with disagreements. Systematic policy analysis would expose the evaluations of the expected effect and the values underlying the policy proposals, which may bring to the surface the rift between parts of society, thereby increasing the potential for paralysis in decision making. This ambiguity clearly harms the ability to identify whether the economic policy matches the public’s preferences, or at least does not create permanent winners and losers.Apparently, it could be claimed that the time pressure under which the Budget Department operates does not facilitate policy analysis according to the standard model of policy analysis, and compels the department to conduct intuitive policy analysis. An analysis of the child allowances, however, shows that it would have been possible for the Budget Department, within the available time framework, to conduct a forecast of the expected effects of the policy proposal on poverty (or to request this from the National Insurance Institute), which was not done. Notes 1

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I would like to thank Eyal Epstein, Shaul Meridor, Rotem Peleg and Reuven Kogan who were interviewed for this article. At the time of the interview (July 2011) they were deputy-heads of the Budget Department of the Ministry of Finance. I also thank Galit Cohen-Blankstein, Avi Ben-Bassat, Anat Gofen, Udi Nissan, Muli San and Shaul Zemach for their helpful comments. The Arrangements Law was first legislated in 1985 as part of the economic plan for stabilising the economy. This plan was designed to deal with one of the most severe economic crises the Israeli economy had ever faced. Since then the emergency has

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passed, but the Arrangements Law has become entrenched in the Israeli budgeting process. Each year the government presents the Arrangements Law in tandem with the Budget Law for the purpose of authorising dozens of laws and legislative amendments in various areas. In recent years the use of the Arrangements Law has grown considerably, and it serves also as a platform for economic programmes that were introduced during the year (Ben-Basset and Dahan, 2006). In January 2012 the Ministry of Finance had 1,067 posts, half of which were for administrative employees (Report on salary expenditure in government service, in the security bodies and the Prisons Service for 2011, p 125). The National Insurance Institute analysed the overall effect of the taxation and the allowances on inequality. Some of the steps (greatly) increase inequality, like cuts in the allowances, and some (slightly) reduce it, such as raising the rate of income tax, and overall the effect is that of increasing inequality. After the new government was formed, the decision was made to present the budget for the remainder of 2013 and the whole of 2014. The overall reduction in expenditure in the 2014 budget is about NIS 10.5 billion, and includes an uncertain cut of NIS 3 billion in the security budget (The State Budget, Proposals for Changing the 2013–2014 Budget, p 50). In other words, the cut in child allowances is about 40 per cent of the overall reduction, if the cut in the defence budget were not to materialise. An analysis of the effects does not include the benefit that the cut might achieve, such as an increase in labour force participation. If there is no additional benefit from the cut in child allowances besides meeting the deficit target, it is not clear why the cut is made here and not in any other item of the budget. Note that this evaluation is based on extrapolation and does not take into account behavioural changes that could occur in the short run (labour supply) or in the long run (number of children) as a result of the cut in child allowances. The four other solutions are high taxation on energy inefficient appliances, accelerated depreciation for investments in energetic efficiency, subsidising investment for reducing greenhouse gas emissions, and broadening consumers’ obligation to move over to pricing according to load demand. The committee’s letter of appointment included also an examination of the economic effects of discovering gas and oil on the exchange rate and the competitiveness of the Israel economy.

References Bardach, E, 2011, A practical guide for policy analysis: The eightfold path to more effective problem solving, Thousand Oaks, CA: Sage Ben-Bassat, A, 2011, Conflicts, interest groups, and politics in structural reforms, Journal of Law and Economics 54, 4, 937–52 Ben-Basset, A, Dahan, M, 2006, The balance of forces in the budgeting process [in Hebrew], Jerusalem: The Israel Democracy Institute Dror, Y, 1968, Public policymaking reconsidered, Scranton, PA: Chandler Publishing Company 139

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Dunn, WN, 2012, Public policy analysis, 5th edn, New York: Pearson Education Geva-May, I, Kfir, A, 2000, Developments in policy analysis and evaluation in public administration, Public Administration 78, 2, 409–22 Governance Committee, 2013, Report of the team for improving the staff work and the execution ability of the government ministries [in Hebrew], March, Jerusalem: State of Israel Kingdon, JW, 1995, Agendas, alternatives, and public policies, London: Longman Publishing Group Kubersky Committee, 1989, Report of the public–professional committee for comprehensive examination of the civil service and bodies supported from the government budget [in Hebrew], Jerusalem: State of Israel Ministry of Finance, 2013, The Economic Plan for 2013–2014 [in Hebrew], May, Jerusalem: Ministry of Finance Shani Committee, 2011, Report of the interministerial committee on a national action plan for reducing greenhouse gas emissions [in Hebrew], June, Jerusalem: State of Israel Sheshinski Committee, 2011, Report of the committee for examining fiscal policy regarding oil and gas resources in Israel [in Hebrew], January, Jerusalem: State of Israel Stone, DA, 1988, Policy paradox and political reason, Glenview, IL: Scott, Foresman Tanzi, V, Schuknecht, L, 2000, Public spending in the 20th century: A global perspective, Cambridge: Cambridge University Press Trajtenberg Committee, 2011, Report of the committee for socioeconomic change [in Hebrew], September, Jerusalem: State of Israel Weimer, D, Vining, A, 2011, Policy analysis concepts and practice, 5th edn, New York: Pearson Education Zemach Committee, 2012, Report of the interministerial committee for examining government policy on the natural-gas economy in Israel [in Hebrew], August, Jerusalem: State of Israel

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Policy analysis at the Bank of Israel1 Karnit Flug The Governor of the Bank of Israel, unlike the heads of most central banks, has been assigned the formal role of the economic advisor to the government. This was the case in the original Bank of Israel (BOI) Law of 1954, and it continues in the newly legislated 2010 law. Thus, the policy research and analysis undertaken at the Bank is not limited to monetary and macroeconomic matters, but covers a wide range of policy issues. This chapter will describe and discuss the policy analysis carried out at the Research Department (RD) of the Bank of Israel. It begins with a description of the institutional and legal framework (the first section) and the description of the profile of researches (the second section). The next two sections then discusses the policy analysis performed to support the conduct of monetary policy within the framework of an inflation targeting regime and in support of financial stability and macroprudential analysis. The chapter then moves on to the analysis in support of the Governor’s role as Economic Advisor to the Government (the fifth section) such as the analysis of fiscal policy and its dynamics, primarily from the perspective of fiscal aggregates (expenditure, taxes, deficits and debt), the analysis of labour markets, welfare and social services provision, and so on. The review covers both current analysis (that is, from a short-term perspective) and its evolution over time, and specific research projects aimed at in-depth analysis of various policy issues. The final section provides some concluding remarks.

Institutional and legal framework The Bank of Israel was established in 1954 and according to the Bank of Israel Law, the Governor was assigned the unique role of an Economic Advisor to the government – ‘The Governor shall serve as adviser to the Government on currency and other economic matters’ (the BOI Law, 5714–1954). Many believe that the unusual task for a central bank Governor was added because David Horowitz, the first Governor of the Bank of Israel, had served as Director General of the Ministry of Finance until the establishment of the Bank. It was also based on the expectation that the Bank could attract high level professionals for its Research Department. Each Governor has had a somewhat different interpretation of the role of an economic advisor to the government, but nonetheless all served as active advisors.

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In 2010, when a new Bank of Israel Law was legislated, the Governor’s role as advisor to the government on economic matters was retained. Policy analysis at the Bank of Israel serves two broad purposes. The first is to provide the analytical input into policy decisions made by the Bank. This is primarily in the area of monetary policy, financial stability and macroprudential policy. The second purpose is to provide the Governor with the analytical input and research infrastructure that serve as a basis for his economic advisory role. The primary task of the Research Department at the Bank of Israel is to provide the economic analysis that serves as the basis in the formulation of monetary and prudential policy decisions (decisions which, under the new BOI Law, are taken by the Monetary Policy Committee (MPC)), and in the formulation of the Governor’s policy recommendations. As part of the economic advisory role, the Research Department also assesses the government’s policy by monitoring and analysing economic developments, and by creating a research infrastructure for informed policy decisions. The results of the ongoing analysis, research and assessments are presented to the decision makers in the Bank of Israel, to government ministries, Knesset committees and to the public. Thus it contributes to the understanding of economic processes, the identification of trends and risks, the professional examination and evaluation of policy proposals, and the formulation of policy in the Ministry of Finance and other Ministries. One channel by which the analytical work performed at the Research Department finds its way into the decision making process has been through the participation of Research Department’s senior staff in public committees. These committees are usually formed by the government or by the relevant ministries, and are expected to come up with policy recommendations on a specific policy issue. They are generally comprised of representatives of various ministries, sometimes with external experts, and the BOI has been invited to participate in many of them. The Bank’s representatives often provide the analytical infrastructure which serves as a basis for the work of these committees. A partial list of the committees on which the BOI representatives have served and provided analytical input over the past five years includes: the Committee for Economic and Social Change (the Trajtenberg Committee), the economic team for the process of joining the OECD, the Committee Aimed at Ensuring the Long Term Stability of the National Insurance Institute, the Committee for Determining the Retirement Age for Women, the Committee for a Reform of the Public Transportation System, and the Committee on a Multi-Year Defence Budget (the ‘Brodet‘ committee).

The Research Department: professional capabilities, skills and quality control The Research Department of the Bank of Israel has about 75 employees, of whom about 50 are economic researchers (with either an MA in Economics or a PhD), 20 are students (studying for their BA or MA in economics) and the 142

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rest are support staff. The Department is divided into two divisions one which covers monetary and financial issues and one covering macroeconomics and policy analysis. The monetary and financial wing is further divided into units – capital markets, financial stability, banking, monetary current analysis and monetary modelling, while the macroeconomics and policy analysis division is divided as well into the following units: macroeconomics, economic industries and infrastructure, labour market, public sector and balance of payments. This structure and list of units provide a sense of the broad scope of coverage and expertise within the Research Department. The staff at the Research Department is highly qualified, and until recently tended to have a relatively long tenure at the Bank. About 40 per cent of the economists hold a PhD degree and the rest hold an MA with a research orientation. The long tenure at the Bank facilitated the buildup of expertise and knowledge that are quite unique in the public sector. Any work conducted by researchers at the Research Department goes through a process of peer review and discussion in various forums before being published or transferred to BOI management or shared with other governmental agencies. A draft of any policy analysis or proposal is discussed in a small forum of economists and managers and revised on the basis of the comments received before being presented in internal or external forums as ‘the Bank of Israel’s view’, or published in any BOI publication. Research papers are presented in a departmental seminar where they are also assigned a discussant. Following the incorporation of comments and the approval by the editor of the discussion papers series (DPS) – who is a member of the Department’s management – it is published in the DPS. Some papers that are submitted to the BOI Survey – a professional journal – are refereed and undergo a review process as in any professional journal. Other papers are published in other academic journals. The work programme of the research department is developed through a combination of ‘top down’ and ‘bottom up’ process. Naturally, most of the research and analysis that is conducted as a direct input into the BOI’s policy decision making is assigned by the Bank’s or the research department’s management. It is directed at answering specific questions or providing specific input into policy formulation. Another part of the work programme is initiated by the research department’s management in response to, or in anticipation of policy issues that are being discussed or that they want to put forward for discussion with the Bank’s management and later on with the relevant government ministries. This is done in order to provide professional input in the context of the Governor’s role as the economic advisor to the government. The third part of the work programme is research projects that are initiated by the researchers and are approved by the department’s management. These projects can be either directed at specific policy questions that arise in the public discussion, or a more fundamental or general question (‘basic research’) that advances our understanding of economic behaviour and relationships more broadly, and adds to the body of knowledge that serves

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as infrastructure for economic analysis. Some projects that are initiated by the researchers are part of their requirements in the context of their academic training.

Policy analysis in support of monetary policy Conducting monetary policy is the principal task of the Bank of Israel like that of any central bank. The policy decisions are made by the Monetary Policy Committee, which was established in October 2011 in accordance with the 2010 Bank of Israel Law (under the 1954 law, the Governor was the sole decision maker.) The committee has six members, of whom three are from the Bank and three are from the public. It is chaired by the Governor, who has an additional vote in the case of a tied vote. The main objective of monetary policy, as defined by the BOI Law, is attaining and maintaining price stability, and subject to that, supporting the other objectives of the government’s economic policy – including growth and employment – and supporting financial stability. Price stability is defined by an inflation target that is set by the government, and the Bank’s objective is attaining this target. In order to attain this target the BOI sets its interest rate (the rate at which it lends to or borrows from the banks). In order to decide about the appropriate interest rate each month, the Research Department and the Market Operations Department provide analyses of the current state of the economy and of markets abroad. The Research Department analysis focuses on the macroeconomic indicators of economic activity and on the inflation environment and the main forces affecting it. This is done by analysis of current statistical data on economic activity, including trade flows, the labour market, public finances, about the balance of payments as well as the evolution of prices and financial market indicators. This evaluation is also aided by econometric models and statistical tools, and surveys that are used to determine the current state of the economy given the delays in statistical data. In addition, in order to help formulate forward looking policy, policy makers (the MPC) are also provided with projections of the major economic variables (growth of output, employment, inflation and so on), using state of the art econometric models, and assumptions about the external environment. These models are also used to perform policy simulations to assess the outcomes of alternative policy decisions (for example, interest rate paths) that can help in, for example, judging the tradeoffs between inflation and growth. The econometric models are also used to assess the outcomes under different external scenarios (for example, alternative assumptions about the world trade growth rate, or the evolution of energy prices).This is particularly important in the analysis of risks given the uncertainty about the environment in which policy decisions need to be taken. In order to perform the policy analysis described above, which serves as a direct input into policy decisions, quantitative models and analytic tools are developed on the basis of econometric research conducted by researchers at the Research 144

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Department, who maintain an ongoing dialogue with colleagues in other central banks, international organisations (for example, the IMF), and academia. The performance of these tools in assessing the current state of the economy and in providing projections is tested both in and out of sample, and the estimation methodology, the models and their performance are published in research papers (see references below). Examples of the analytic tools that help assess the current state of the economy are: (1) The Composite State-of-the-Economy Index was developed initially in 1991 (Melnick and Golan, 1991) and redefined in 2003 (Marom, Menashe and Suhoy, 2003). This index is based on several economic indicators and uses advanced statistical methods to provide, in real time, an indicator for the level of economic activity; (2) The Companies Survey was carried out by the Research Department until recently – it is now being replaced by the Business Tendency Survey conducted by the Central Bureau of Statistics – and provided qualitative information about the evolution of current activity, employment, obstacles to expansion, and so on, as well as prospects for the next quarter (Marom, 2001). This helped in assessing the state of the various sectors and the short-term expected trends. (3) Nowcasting econometric and statistical models provide projections of basic National Accounts (NA) variables in real time, which is important for policy makers given that NA data is published a month and a half after the end of the quarter. (4) The Dynamic Stochastic General Equilibrium (DSGE) model (Argov et al, 2012), which has theoretical foundations and was estimated for the Israeli economy, is the main model that is used in the formulation of projections for the main macroeconomic variables over the medium term (1–2 years ahead). It is also used to analyse various scenarios and the outcomes of alternative policy paths. In addition to the direct analytical input into the monthly monetary policy decisions, the BoI undertakes various research projects aimed at evaluating particular policy tools. Policy analysis is often performed in order to assess the potential effect of a policy tool or options that are being considered. This analysis is reported to the Bank management or to the MPC in an internal memorandum that serves as a basis for the policy discussion and decision. An example of this type of analysis is the estimation of a model of the Equilibrium Exchange Rate, which served to assess the deviation of the current rate from equilibrium – an essential input into the discussion in 2008–09 of the need for foreign exchange market intervention by the BoI. Another example is the estimation of the contribution of various factors to the rise in housing prices during 2008–12. These research projects are in most cases eventually published following an internal review process, as part of the BoI DPS, as a ‘box’ in the BoI Annual Report, or as part of the ‘Special Topics’ section of the Recent Economic Developments series, issued three times a year by the research department. Another type of policy analysis performed at the Research Department is expost evaluation of the outcome of policies that were implemented by the Bank. This is done in various forms and levels: short-term and qualitative analysis is performed and published in periodical reports such as the BOI Annual Report 145

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and the Monetary Policy Report. More rigorous evaluation is performed as research projects using various models and estimation procedures. An example of such a study is that of Avihai Sorezcky (2010) – ‘Did the Bank of Israel Influence the Exchange rate?’ – which assessed the effect of the Bank’s foreign exchange intervention during 2008–09.

Policy analysis in support of financial stability and macroprudential analysis As mentioned above, one of the Bank’s objectives is to support the stability of the financial system. This objective, which gained prominence among central banks in how they view their objectives during and after the global crisis of 2008–09, was introduced explicitly into the BOI Law of 2010. Since then, a work programme has been developed and implemented in this area: a programme in line with the evolution of the international thinking on these issues. It is important to note that while there are specific authorities in charge of the regulation and supervision of the various types of financial institutions (the Banking Supervision Department of the BOI regarding banks, the Ministry of Finance’s Capital Markets, Insurance and Savings Department for other financial institutions, and the Israel Securities Authority for securities), it is the BOI who is in charge of the stability of the overall financial system – the macroprudential responsibility. The close links and interactions between the various components of the financial system (among the various institutions and between the institutions and the financial markets) require the analysis of the system as a whole. This means following and analysing the interactions between the various elements of the system, the dynamic processes within the system, and the concurrent effects of external shocks on the various elements of the financial system. In order to do so, the BOI operates in two forums. One is the regulators team, whose aim is to coordinate between the Capital Market, Insurance and Savings Department at the Ministry of Finance, the Israel Securities Authority, and the Banking Supervision Department at the Bank of Israel. The inter-institutional team’s goals are to identify systemic risks in the financial system; to exchange essential information among the three authorities regarding financial institutions, financial markets status and various financial instruments; and to discuss possible courses of actions, preventive and ex-post, in crises for dealing with systemic risk. The second forum is an inter-departmental team inside the BOI in which members of Research Department, Market Operations Department and the Banking Supervision Department meet to monitor the development of systematic risks. They do so by: 1 compilation and analysis of data on the financial system and close follow-up of developments in the system with a focus on the main risks to stability; 2 development of analytic tools for early warning signs of threats to stability and of early intervention tools to remedy such developments. 146

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Examples of such an analysis are the consideration of alternative policy measures (‘macroprudential’ measures) aimed at cooling off the housing market following a sharp rise in housing prices during 2008–11 (such as limits on the ration of loan to value (LTVs) of mortgages, and special reserve requirements for mortgages). It is important to note that the analytical tools and models of analysis in the macroprudential area are still evolving, and there are no ‘state of the art’ or ‘best practices’ that are agreed upon. The international organisations such as the IMF and the BIS also devote a lot of resources to help define the various elements of this task.

Policy analysis in support of the Governor’s economic advisory role Policy analysis conducted at the BOI’s Research Department in support of the Governor’s role as the economic advisor to the government has four main components: (1) basic ‘infrastructural’ research that estimates fundamental relationships and quantifies structural attributes of the Israeli economy, (2) construction of econometric models that can be used to estimate and evaluate the effects of various policies on economic outcomes, (3) current analysis of recent economic developments, and (4) research projects to estimate the effects of specific policy interventions. In this section, I will demonstrate and provide examples for each of these types of policy analysis. 1 Basic research In this category we can list research projects such as an estimation of macroeconomic models and equations for the Israeli economy that can help understand and assess the dynamics of the economy, its reaction to shocks and policies, its growth potential and its determinants, and some aspects of the market structure in general and in specific sectors and industries. This type of research is conducted on a wide range of topics. Examples of such basic research include an assessment of the determinants of the real exchange rate in Israel (Sussman, 1998), analysis of the cyclical bias in government spending in Israel (Hercowitz and Strawczynski, 1998), the effects of technological and structural changes on unemployment by level of education (Flug, Kasir and Ribon, 2000), political business cycles (Klein, 2000), the effects of technological changes on the wage structure, the determinants of sustainable growth, the effects of fiscal policy on private consumption, the change in banks’ market power resulting from globalisation, the return on education, growth episodes and macroeconomic policy, and labour diversity and productivity (Navon, 2009). This type of basic research serves as a pool of knowledge about the economy and its characteristics, and is important as a basis against which the effects of various macroeconomic policies can be assessed, evaluated and projected.

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2 Econometric models As Economic Advisor to the government, the Governor expresses his professional opinion during budget discussions. He often presents the trade-offs between various paths of the various fiscal aggregates (spending, taxes, deficits, debt) and presents the implications of various policy choices. The quantitative assessments of the fiscal policies are based on several econometric models developed, estimated and maintained by the Research Department. Those include a macroeconomic model in which the relationship between various fiscal aggregates and macroeconomic performance (for example, economic growth) are quantified. Another model is a tax model which estimates the relationship between various macroeconomic indicators (for example, growth, change in wages, developments in the financial and stock markets, exports, imports) and tax revenue (Brender, 2001). This model can help assess the effects of tax reforms on overall tax collection, and of the effects of exogenous shocks to the economy on revenues and the deficit. These quantitative assessments are critical in fiscal policy design. 3 Current analysis The evaluation of the current state of the economy as a whole, and of various sectors in particular, is an important input in the design of policies. The current analysis is also a basis for short-term and medium-term projections on which budgetary plans are based. The RD is regularly consulted by the Ministry of Finance regarding its assessment of the current level of activity and its macroeconomic projections. These consultations include the RD’s assessment regarding the effects of various external shocks on the economy, an assessment that is performed using the macroeconomic models noted above. Current analysis also covers developments in specific industries. For example, when housing prices were rising rapidly during 2008–11, the BOI was consulted regarding the source of the rise in prices, a diagnosis that was crucial in devising the correct policy response. The assessment that sources were both the low interest rate and a slow supply response to the rising prices, based on research conducted at the RD (and published in the BOI’s Annual Report and in its DPS [Dovman, Ribon and Yakhin, 2011]), made an important contribution to the recognition that the government needs to expedite the sale of land so as to increase the supply of new homes. Other examples include the assessment of future demand for natural gas as an input to reaching a decision on government policies on natural gas exports, and an assessment of the evolution of demand for hotel rooms as an input to the government policy in promoting the construction of hotels (Shaharabani and Menashe, 2011).

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4 Policy evaluation research projects In this section, I will explore in detail one example of the way in which the Research Department of the Bank of Israel supports the Governors’ role as Economic Adviser to the government. I will do so by describing the ‘birth’ of an important policy tool – which the Bank of Israel played a vital role in initiating, evaluating and pushing for implementation; I will then also evaluate the implementation and assess the impact of the programme. The Earned Income Tax Credit (EITC) is a policy tool for reducing social gaps and improving the income of the working population at the bottom of the income distribution. It is a progressive income tax system, in which people earning below a certain threshold receive supplemental pay from the government. It was developed by British politician Juliet Rhys-Williams in the 1940s and later by Milton Friedman, and is widely applied in the US, the UK, New Zealand and in Canada. The idea of importing the EITC to Israel ‘travelled’ in the halls of the Bank for some time. Early reference can be found in the BOI 2002 Annual Report (although the name of the programme wasn’t mentioned explicitly): ‘Research undertaken in other countries shows that programmes to subsidise the wages of individuals with low earning ability serve to increase their participation rate’.A year later, the BOI 2003 Annual Report calls for the implementation of such a policy explicitly: ‘the urgent need to adopt additional policy measures which will provide direct support for the return of unskilled workers to the labour market – such as the introduction of a negative income tax programme’.In 2004, two researchers from the Bank of Israel – Kaliner-Kasir and Gottlieb – published a policy report which offered strategies to reduce poverty. One of their recommendations was to give tax benefits to low income workers. In 2005, Bank of Israel research suggested implementing the EITC in Israel (Brender and Strawczynski, 2006). The Brender and Strawczynski research presented a framework for cost–benefit analysis and an evaluation of the impact of the programme on employment, poverty and budget. They showed that the programme has the potential to make a significant contribution in reducing poverty among the working poor. The expected impact on poverty and labour market participation was examined under different parameters of the programme (including the effect on different groups in Israeli society). The policy papers and the research published by the BOI on the potential effects of an EITC helped convince policy makers in the Prime Minister’s Office and the Ministry of Finance about the necessity of the programme. In February 2007, the government adopted Resolution 1134 regarding the adoption of an EITC experimental (pilot) programme, with the intention to make it a national programme in 2010; different governmental committees affirmed the need for such a programme, including the Social-Economic Agenda for Israel written by the National Economic Council. Following the initial implementation of the EITC, the Bank of Israel continued to monitor the implementation of the programme. Research support was given

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during the first year of operation in order to review the take up of the programme and its effect on poverty and employment. A committee was formed with the participation of economists from the Israel Tax Authority, which is in charge of implementation, the National Insurance Institute, the Brookdale Institute for Research in Social Sciences, and the Bank of Israel which heads the committee. The committee used statistical and administrative data (including data from surveys constructed especially for this purpose) to estimate on a current basis the take-up rate, and provided a detailed analysis (including an international comparison) of different aspects of the programme. This was published in the publication ‘Recent Economic Developments’ of the BOI. In the summer of 2010, the Research Committee published a report analysing the first year of implementation of the programme, which was an important input brought to policy makers when deciding on enlarging the programme’s scope to the national level. The findings showed that the EITC programme accounted for lifting about 4.5 per cent of those under the poverty line, out of poverty; it reduced the depth of poverty, expressed in terms of the poverty gap, by about 5 per cent, and boosted the income of the bottom quintile of the recipients of EITC by some 12 per cent. About 80 per cent of the support transfers went to the lowest four deciles of the wage distribution. The research also shows a decline in the indebtedness of recipients and of the share of those who had to give up essential services such as visits to a dentist, and the share of those whose telephones or electricity were cut off. Based on the experience and findings to date, the BOI concluded that EITC is a focused and effective tool that raises the level of income of the working lowpaid population, and helps improve the situation of families with income slightly above the poverty line. The experimental programme became a national one in 2012, based on 2011 incomes (Government resolution 1906). It received further support from the Committee for Social and Economic Change (the Trajtenberg committee), which recommended increasing the EITC benefit received by working women. This benefit is expected to increase by 50 per cent starting on 2013.The example of the adoption by the Israeli government of an important policy tool – the EITC – based on the analytical work carried out by the Research Department is unique. Its uniqueness is that the whole process – starting with an initial idea, followed by a very focused research project that dealt with concrete aspects of programme design, followed by being presented in a policy recommendations paper, and then, following the adoption of the pilot programme, being assessed and analysed – was initiated and carried out by the Research Department (with some collaboration with other research bodies). In most cases, some elements of this process are carried out by the Research Department, but it is usually less involved in the implementation stage. It is also important to note that most new policy programmes are not systematically assessed by researchers. 150

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Concluding remarks The purpose of policy analysis and research at the Bank of Israel is to improve the quality of policy decisions. Macroeconomic analysis and research is an essential ingredient in the Bank’s monetary policy formulation. The analysis and research also supports more broadly economic policy decisions in Israel as it is the basis for the Bank’s Governor’s advice to the government on economic matters. Research, policy analysis and policy evaluation helps improve the policy decisions as they become more informed and based on a methodological learning process called analysis and research. Note 1

I wish to thank Noa Heymann for excellent research assistance.

References Argov, E, Barnea, E, Binyamini, A, Borenstein, E, Elkayam, D, Rozenshtrom, I, 2012, MOISE: A DSGE model for the Israeli economy, Bank of Israel Discussion Paper 2012.06, Jerusalem: Bank of Israel Ber, H, Ribon, S, 2004, Market power of banks against large firms: What has changed with the opening of the Israeli economy, Bank of Israel Discussion Paper 2004.14, Jerusalem: Bank of Israel Brender, A, 2001, Estimate of a tax function in Israel, Bank of Israel Discussion Paper 2001.02, Jerusalem: Bank of Israel Brender, A, Strawczynski, M, 2006, Earned Income Tax Credit in Israel: Designing the System to Reflect the Characteristics of Labor Supply and Poverty, Israel Economic Review 4, 1, 27–58 Dovman, P, Ribon, S, Yakhin, Y, 2011, The housing market in Israel 2008–2010: Are housing prices a ‘bubble’?, Bank of Israel Discussion Paper 2011.06, Jerusalem: Bank of Israel Flug, K, Strawczynski, M, 2002, Sustainable growth: Is it around the corner? An analysis using Michael Bruno’s conceptual framework, Bank of Israel Discussion Paper 2002.05, Jerusalem: Bank of Israel Flug, K, Strawczynski, M, 2007, Persistent growth episodes and macroeconomic policy performance in Israel, Bank of Israel Discussion Paper 2007.08, Jerusalem: Bank of Israel Flug, K, Kasir, N, Ribon, S, 2000, Unemployment and education in Israel: On business cycles, structural changes, and technological changes: 1986–1998, Bank of Israel Discussion Paper 00.02, Jerusalem: Bank of Israel Frish, R, 2007, The causal effect of education on earnings in Israel, Bank of Israel Discussion Paper 2007.03, Jerusalem: Bank of Israel Hercowitz, Z, Strawczynski, M, 1998, On the cyclical bias in government spending, Bank of Israel Discussion Paper 98.06, Jerusalem: Bank of Israel Klein, N, 2000, Political cycles and economic policy in Israel 1980–1999, Bank of Israel Discussion Paper 00.12, Jerusalem: Bank of Israel 151

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Marom, A, 2001, The success of the companies and businesses survey of the BOI in diagnosing developments in the economy and the business cycle [in Hebrew], Bank of Israel Discussion Paper 2001.13, Jerusalem: Bank of Israel Marom, A, Menashe, Y, Suhoy, T, 2003, The State-of-The-Economy Index and the probability of recession: The Markov Regime-Switching Model, Bank of Israel Discussion Paper 2003.05, Jerusalem: Bank of Israel Melnick, R, Golan, Y, 1991, Measurement of business fluctuations in Israel, Bank of Israel Discussion Paper 91.01, Jerusalem: Bank of Israel Navon, G, 2009, Human capital spillovers in the workplace: Labour diversity and productivity, Bank of Israel Discussion Paper 2009.05, Jerusalem: Bank of Israel Shaharabani, R, Menashe, Y, 2011, The hotel market in Israel, Bank of Israel Discussion Paper 2011.04, Jerusalem: Bank of Israel Sorezcky, A, 2010, Did the Bank of Israel influence the exchange rate? Bank of Israel Research Department Discussion Paper 2010.10, Jerusalem: Bank of Israel Sussman, A, 1998, The real exchange rate in Israel, 1980–1997, Bank of Israel Discussion Paper 98.05, Jerusalem: Bank of Israel Yaacov, L, Strawczynski, M, 2003, The impact of fiscal policy on private consumption in Israel with an emphasis on the fiscal expectations approach, Bank of Israel Discussion Paper 2003.14, Jerusalem: Bank of Israel Yotav-Solberg, I, 2001, The effect of technological changes on the wage structure in Israel, 1980–1999, Bank of Israel Discussion Paper 2001.07, Jerusalem: Bank of Israel

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Part Four Policy analysis from the outside

NINE

Insiders within? The third sector and policy analysis in Israel Hagai Katz This chapter takes a specific realm of policy making in Israel – the third sector – to demonstrate the intricate relations and the ambivalence between ‘insiders’ and ‘outsiders’ in policy analysis processes in Israel. It examines the third sector as both a target of and a participant in policy analysis processes.  The third sector in Israel was shown in international studies to be one the largest in the world within its national context (Salamon et al, 1999). Moreover, it plays a pivotal role in various policy realms as a participant in both policy making and implementation. Yet, policy analysis and formal policy making have until recently ignored this important collective actor (Galnoor et al, 2003). This situation began to change since the late 1990s. The change was initiated by Academia and the third sector itself, and was only partially adopted by government. In fact, Israeli governments have been reluctant to seriously look into the third sector for various reasons, political and financial (Bar and Gidron, 2010). Consequently, the change process began outside  of government, with the formulation of an international study, a national database and a policy analysis committee. The result was an ongoing process in which different actors, including various government ministries (Finance, Justice and Welfare), third sector actors, academics and major philanthropic foundations attempt to influence the framing and interpretation of the data that was produced and policies and concepts that were developed. This process reflects an ambivalent relationship between governmental and nongovernmental policy actors and the mixed and inter-sectoral arrangements characteristic of policy analysis in Israel. There are two parts to this chapter. The first part will discuss briefly the role of third sector actors such as advocacy groups, human service providers and think tanks, in policy analysis in general and in Israel in particular. The second part will focus on public policy towards the third sector as a specific realm of policy making in Israel, and analyse the actors engaged in policy analysis and relationships between them within the broader context of the Israeli polity and the conceptual framework of the book.

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Third sector organisations and policy analysis Various national and global processes have enhanced the legitimacy of third sector organisations in public discourse in general, and in social policy in particular. These include their immense growth in size and scope since the 1970s, what was termed by Salamon (1994, 109) ‘a global associational revolution’; the increased participation of the third sector in service provision through the mixed economy of welfare service delivery (Evers and Laville, 2004), the central roles that they play in the new (or renewed) political discourses on civil society (Walzer, 1992) and the third way (Haugh and Kitson, 2007); the advance of new public management (NPM), inspired by ‘public choice’ economic theories and their emphasis on efficiency and effectiveness of public action (Anheier and Salamon, 2006); and their heightened salience in democratic governance at all levels from local to global (Barber, 1984; Scholte, 2002). Correspondingly, there has emerged a body of literature on the third sector’s part in policy analysis and policy processes more generally. Much of this literature is dominated by work examining the third sector as a policy actor, looking at the policy issues that third sector organisations prefer or factors that enhance third sector organisations’ impact on policy outcomes. Elisabeth Boris and Rachel Mosher-Williams (1998) analysed the entire universe of US advocacy nonprofits and found that they most often engage in health, human service, the environment and education. A later analysis by Curtis Child and Kirsten Grønbjerg (2007) highlights their policy efforts in the fields of the environment, health, education, human services, or arts and culture. John Casey (2004) examined third sector organisation policy effectiveness. The model that he developed includes the political and socioeconomic environment, the policy in question, the characteristics of the third sector organisations involved, and the network of actors engaged in the process. In her study of human service nonprofits in Los Angeles Jennifer Mosley (2010) shows that the participation of these organisations in policy advocacy is influenced by environmental resources and organisational incentives. Susan Phillips (2007) looks at some of the effects of engagement in policy analysis on voluntary organisations. In an analysis of the third sector involvement in Policy Analysis in Canada, she argues that it contributes to professionalisation, through changes in hiring practices and preferences, and consequently brings about change in their governance so that they become less bottom-up and less directed by their members. As well, the close interaction with government that this work entails makes organisations and their activist repertoires more mainstream and conventional. Notably, project funding, whether from governments or foundations, that typically funds policy analysis work, is more likely to fund short-term research projects and increases the funding uncertainty and therefore intensifies the resource dependencies of third sector organisations. The Israeli literature on third sector organisations in policy mostly describes them as an emergent actor with growing influence. Robert Schwartz (2002) describes the major progress made in the Israeli public administration towards 156

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more systematic evaluation. One of the aspects he points out is the delegation of government programme evaluation to third sector actors. While in some policy areas evaluation is performed internally, in other areas it is mostly outsourced, such as in aging where the JDC’s Brookdale Institute is the prominent actor. Gal (2004) notes that policy analysis has been done for many years, even as early as the pre-State era, by a mix of institutional and nongovernmental actors, often in the form of ad hoc committees mixing the two. The literature on interest group politics (for example, Yishay, 1991) places the large and institutionalised interest groups at the centre of the third sector’s policy activism. Yet, Michal Bar (2001) argues that not only major interest groups such as labour or industrial interests can inform policy analysis and affect policy outcomes. She showed how small human service organisations involved in the field of child disability were able to engage successfully in the policy process. She found that the low level of institutionalisation of smaller organisations rendered them more effective in their advocacy work. They were less committed to quiet and more cooperative tactics, and engaged in more controversial activism. As well, their limited access to lawmakers compared to their more influential counterparts drove them to bypass the parliament and government and engage directly with the Supreme Court, which proved to be an especially effective move. Her conclusion was that processes of privatisation and commercialisation of the welfare state in Israel turned the policy making system into a more horizontal and pluralistic one. More recently, Schmid, Bar and Nirel (2008) analysed the advocacy activities of a large sample of Israeli nonprofit human service organisations, looking at modes and strategies, as well as factors affecting the perceived policy impact of the organisations. Overall the authors estimated the scope and intensity of perceived political activity as moderate and limited. Among the activities adopted by the organisations in their study, those in the category of ‘research and dissemination of information’ (p 591), which are pivotal to policy analysis, ranked second highest among their sample’s most frequently used activities. Correspondingly, their respondents ranked their own influence the highest in the area ‘notifying and informing policy makers’ (p 593). Another type of third sector actors present in the literature on policy change are philanthropic foundations (see for example Ferris, 2003). In a study of the role of philanthropic foundations in policy making, Michal Bar and Esther Zychlinsky (2010) looked into two cases of government-foundation collaboration. In both cases the foundation officials saw as their role to engage in knowledge development and evaluation that are supposed to inform the planned programmes. In one case, of a school principles’ management training programme, the foundations presented the programme to the government only after a long process of research, professional and academic debates, and even after evaluating the outcomes of a pilot programme. Yael Yishay (1999) presented a different analysis. Looking at the legislation of two major changes in the Israeli public health system (national health insurance and the patients’ rights laws), she does find a diverse array of actors, governmental 157

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and nongovernmental. However, despite the explicit pluralism in the process, the different actors adhere to the foundational norm of state supremacy in the policy process. She concludes that, despite recent changes in Israel’s polity, an elitist model of policy making still rules in Israel. This is also reflected in how government officials perceive the proper relationship between government and foundations, which are frayed by inherent conflict and mutual suspicion. While happy to bring in the funds from the foundations, government officials view is that the policy process should be left in its entirety in the government’s hands, and the foundation need only bring in the money and stay out of the actual policy making (Bar and Zychlinsky, 2010). Think tanks are possibly the quintessential third sector actors engaged in policy analysis. These organisations, although sometimes founded and funded by business or government, are normally nonprofit tax exempt organisations, that perform research and advocacy concerning topics such as social policy, political strategy, economics, military, technology and culture (Stone, 2006). These organisations vary greatly in ideology, policy interests, level of professionalisation, academic disciplinary affiliation, size, wealth and more. They have entered the gap between scholarly knowledge and politics caused by the reluctance of politicians to engage in knowledge creation on the one hand, and the hesitancy of universities to translate knowledge into advocacy or activism on the other. Thus think tanks represent an attempt to bridge the gap between knowledge and power and link the role of policy makers with that of academics (Bensimhon-Peleg, 2008). While formerly considered an American phenomenon, think thanks have been flourishing in Israel in recent decades (McGann, 2007). Fifty-three think tanks are listed (as of 1 January 2013) in the Global Think Tank Directory of the Think Tanks and Civil Societies Programme of the International Relations Programme at the University of Pennsylvania (http://gotothinktank.com/2014-global-go-tothink-tank-index-report/). In the first study of Israeli think tanks, Perla Aizencang Kane (2004), whose study analysed all think tanks in Israel at the time of the study, within the context of Israel’s political culture, found 21 independent think tanks and eight that were university affiliated, almost all established since the 1990s. She argues that Israeli think tanks are active predominantly in the early stages of policy development, which includes policy entrepreneurship, agenda setting, problem framing and development of policy alternatives. However, this doesn’t necessarily mean great influence. She argues that they are consulted with only at random, and they are only marginally involved in policy networks, partly affected by the level of their partisan affiliation. They do serve as legitimate foci of knowledge, but since government prefers using instruments which it has more control of, seldom do they take part in evaluations of policy, unless they do that on their own volition. Their influence is limited to hindering rather than promoting policy. Aizencang Kane explains this marginality in action and impact in the Israeli political culture, which is knowledge-unfriendly, is characterised by short-termism and is conservative and conformist, leading to strong path dependencies and change aversion (2004). Hannah Meyers (2009) too argues 158

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that, despite their large numbers, the democratic regime in Israel and its intense policy debates, think tanks in Israel have failed to significantly influence policy. She blames the parliamentary government system that engenders party discipline and Israel’s proportional electoral system, which, she argues, discourage elected officials from seeking new and independent policy ideas. Although cautious not to claim actual impact, Sarit Bensimhon-Peleg (2008) offers a somewhat more optimistic outlook on the impact of think tanks in Israel, at least as far as the reach of their work and their perceived influence are considered. She performed a study of think tanks that work on issues of social policy in Israel, mapping and analysing them in the context of philanthropy and the third sector. The 11 think tanks that she focused on ranged on the scale between very large conservative think tanks to small progressive ones. The majority of the think tanks in this group are more short-term oriented, focusing on project-oriented policy analysis, rather than working on the development of foundational and comprehensive worldviews. Bensimhon-Peleg explains the think tanks’ short-termism, at least in part, by the influence of philanthropic foundations who most often prefer to support ‘short-term, outcome-oriented, measurable projects’ (2008, 59). She ties the sustainability of think tanks in Israel to the support that philanthropic foundations, and particularly foreign (Jewish and non-Jewish) foundations, can and have been offering, thanks to the interest they share with think tanks in promoting social change (Gidron et al, 2006).Thus, the elitist and centralised nature of the Israeli policy analysis arena in the first decades of Israel’s independence, has gradually been changing in the recent two to three decades into a more pluralistic one (for example, Bar, 2001). In this pluralistic environment Israeli nonprofits, and especially think tanks, are increasingly involved in policy analysis in specific realms of policy making. Nonetheless, in many cases they play a peripheral role in the processes, as voluntary providers of data and propositions, as government does not recognise them as an integral element of the policy process.

The third sector: awakening a neglected policy realm The absence of an overall policy analysis tradition in Israel (Geva-May and Kfir, 2000) is remarkably clear when the policy towards the third sector is concerned. Unlike in the UK where far fetching changes in the policy vis-à-vis the third sector took place during the 1990s, culminating in a Compact between the government and the third sector (Kendall, 2000), for many years in Israel there hasn’t been a formal attempt to analyse government’s policy towards the third sector or to publicly debate the roles of the sector in Israel: The Israeli government has no declared, clear, or consistent policy toward the third sector. There is no comprehensive law or document that defines the attitude of the government authorities to this sector. Instead, a medley of laws, regulations and provisions governing different types of organisations has grown up haphazardly. The government, 159

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moreover, has failed to adopt concrete measures to develop a consistent and transparent policy. Instead, a system has emerged that has been shaped by history, interests, constraints and pressures. This is true of most countries, but Israel, unlike most countries, has not even attempted to elaborate a clear or consistent policy toward the third sector and its functions. Although the various laws, ordinances and provisions regulating third sector activity create a de facto relationship between the third sector and the government authorities, they are not based on principles or on a rational and consistent policy. (Galnoor et al, 2003, 42). The task was left for the third sector and academics to take the first step. The pivotal actor in the process was the Israeli Centre for Third Sector Research (ICTR). The ICTR was established by Benjamin Gidron in 1997 as an interdisciplinary research centre at the Ben-Gurion University of the Negev. Though established as an academic research centre, it declared that it aims to ‘engage in policy analysis on the third sector and to make third sector issues a focus of the public agenda’. Probably it is this statement that caused some to list the ICTR as a think tank (see for example Aizencang Kane, 2004). ICTR engaged in many projects that entailed policy analysis aspects, but three projects that directly involved policy analysis pertaining to public policy towards the third sector in Israel are of interest here. The first was ICTR’s first ‘flagship’ project – ‘the Hopkins Project’, the second was the establishment of the Israeli Third Sector Database, and the third was ICTR’s policy committee: the Review Committee of Government Policy towards the Third Sector in Israel. All three had effected policy analysis of the third sector in Israel, and had continuing effects that are still in motion today. The Hopkins Project The Johns Hopkins Comparative Nonprofit Sector Project is the first and largest effort to date to analyse the third sector in different countries around the world. The project’s objectives are to document the scope, structure, financing, role and impact of the third sector in solid empirical terms, using a comparative empirical approach that features heavy reliance on a team of local associates in the project countries, a common framework, set of definitions and information-gathering strategies. The study’s first phase started in 1991 with 13 countries. Despite the fact that Israel wasn’t formally part of the project in the first phase, Benjamin Gidron mobilised the Central Bureau of Statistics (CBS) to produce a first report on Nonprofit Institutions in Israel (CBS, 1996). Upon the establishment of ICTR, it formally joined the project in its second phase. A revision of the data was generated in the third phase of the project in 2006. ICTR led the project, assisted by a steering committee comprised of academics, experts, former and

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current government officials and representatives of the third sector’s umbrella organisation at the time. Consequently, the ICTR team developed a comprehensive dataset of third sector organisations, using lists obtained from the Israeli tax authority. This dataset was then used to produce a number of macro-economic analyses of Israel’s third sector (Gidron et al, 2004; Gidron and Katz, 1999; Gidron et al, 1999a; Gidron et al, 2003). Despite reluctance at the CBS, ICTR continued its pressure for production of more national macro-level data on the sector. In 2005 it managed to raise a research grant that was used to fund data collection at the CBS for an implementation of the UN Nonprofit Handbook guideline and produce a third sector satellite account in the national economic statistics, and to hire an analyst dedicated to compiling and publish an annual series of communiqués on third sector statistics. The Israeli Third Sector Database The decision to develop the Israeli Third Sector Database in 1999 took place following ICTR’s engagement in the Hopkins Project, growing disappointment from the state of the data on the third sector and realisation that government has no interest to improve the situation. Information on third sector organisations was being collected at the time by various government agencies such as the Nonprofit Registrar, tax authorities, the Ministry of Finance and more. None of these agencies, however, were making use of the data for any sort of policy analysis, and of course they weren’t sharing this data with each other. ICTR decided to gather all of these data and collate them into one comprehensive database of third sector organisations (Gidron et al, 1999b). Although this was a complex and challenging endeavour both conceptually and technically, the greatest challenge before ICTR was getting legitimacy and obtaining the different data from the various agencies that were holding the data. The project was funded through a grant from the Yad Hanadiv (Rothschild) Foundation, whose long history of collaboration with government became helpful in obtaining the datasets necessary for the project. ICTR engaged in negotiations with the different agencies, managed to obtain Ministry of Justice permission for the release of data, and eventually purchased several datasets that were incorporated into a database (see Gidron et al, 1999b for detailed structure of the database). The database was enriched with classifications and a categorisation using Hopkins Project’s criteria. Organisational, financial and tax information were interlinked in the database, and for the first time in Israel it was possible to analyse registration patterns, government funding, functions and other aspects of the third sector (see for example Gidron et al, 2000; Katz et al, 2006) . The database didn’t remain only an internal ICTR resource. It has become an essential element of Israel’s third sector data infrastructure, and was approached by researchers, students, practitioners, policy-makers and public agencies. In fact, the government has become a major client of the database, regularly purchasing 161

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data services from ICTR. However, the government agencies that provided the data for the database limited ICTR’s use of the data and particularly what services it could provide to researchers and nongovernmental clients. As well, unlike the GuideStar model that was developed in the US and the UK at the time, ICTR was not allowed to provide online access to the database. Seeing transparency and public access to be important functions of the database, in 2006 ICTR initiated an attempt to develop an Israeli version of Guidestar (www.guidestar.org/Home. aspx), suggesting a multilevel model of access, that will allow individuals to seek a specific organisation for services or a donation, and at the same time provide research and policy analysis capabilities. The project, called Irgunim Bareshet (Organisations on the Web) involved also the Yad Hanadiv foundation who has been funding the database for several years, and the Nonprofit Registrar. It was framed as a pilot project, based on ICTR’s database, to be expanded into a GuideStar model after a test period. ICTR was charged with developing the conceptual and technical aspects of the system, and had performed a system characterisation for the project. Once the project had moved from planning to implementation, it was impeded by the top administration of the Ministry of Justice. They expressed concern over legal difficulties due to collaboration with a university, particularly around issues of privacy and tender requirements. The result was a cooptation of the initiative, which was put on hold for a while and then continued through collaboration between the Ministry, Yad Hanadiv Foundation and JDC-Israel, without ICTR. JDC-Israel is in a special status, since it is one of the infrastructural agencies of the Zionist movement that predated the state of Israel and formed the foundation for the state’s emergent structures. As such it is a dual actor, a quasi-NGO, public and private at the same time, exempt from bidding requirements. Similarly, the Jewish Agency was shown to walk a thin line between the inside and the outside of policy making in the area of immigration in Israel (Bins, 2012). The new collaboration, now without ICTR’s involvement, formed a nonprofit company to run the project, which developed into GuideStar Israel (www.guidestar.org.il/). Consequently, the Ministry of Justice and its Nonprofit Registrar stopped providing data on third sector organisations to anybody except GuideStar Israel. The result was that ICTR’s database became rapidly outdated, and macro-level analysis of the third sector in Israel came to a full stop. Paradoxically, even the Central Bureau of Statistics and other government agencies that relied on ICTR’s database encountered difficulties since the database wasn’t updated and ICTR couldn’t continue to provide the necessary services. Only in 2012 has GuideStar Israel produced macro-level data (Limor, 2012), and the complexity of the analyses it can currently perform is considerably lower than what ICTR could offer five years before that.

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The Review Committee of Government Policy towards the Third Sector in Israel In light of the absence of systemic policy making vis-à-vis the third sector, ICTR decided in 2000 to convene an ad hoc public committee to review public policy towards the third sector. The full story of the committee, chaired by Itzhak Galnoor and therefore referred to normally as the Galnoor Committee, was analysed in detail by Michal Bar and Benjamin Gidron (2010). I will retell their story here only briefly, and refer to some developments since. The committee began with eight members from the third sector, government, business and academia. Once realising the complexity of the task, it was enlarged, its deadline extended, and its mission expanded to not only review the policies, but also make policy recommendations. The committee deliberated for over two years, conducting analyses using the newly established database and other sources, and taking testimony from dozens of witnesses. Its final report (Galnoor et al, 2003) was presented to the President of Israel, and was disseminated widely throughout all levels and branches of government and the third sector in Israel. In the following years three different processes followed. The first was a Ministry of Welfare and Social Services taskforce which developed principles for cooperation with the third sector, and began implementing some of the committee’s recommendations, including training of ministry staff, and setting up ‘roundtables’ with ministry staff and third sector organisations’ representatives. The second was an inter-ministerial committee set up to examine government funding of the third sector. The committee (nicknamed the Aridor Committee, after its chair, former Minister of Finance Yoram Aridor), had a very different agenda. Its mandate was to review government allocations to the sector and design stricter regulations. The committee and its recommendations were heavily criticised for its one-sided and suspecting view of the sector, for the exclusive nature of its discussions and for contradicting some of the recommendations of the Galnoor Committee (Bar and Gidron, 2010). Third, in February 2008 the Prime Minister’s office published a policy paper entitled ‘Government of Israel, the civil society and the business community: Partnership, empowerment and transparency’ (Alon, 2008). The document was prepared and published under the new atmosphere brought about by the criticism over government’s failure to respond to the humanitarian crisis of the Second Lebanon War, and the third sector’s impressive mobilisation (Katz et al, 2007). In the report government admits to the lack of policy towards the sector, declares that it is now developing a comprehensive policy, and appreciates the Galnoor Committee’s groundbreaking work. The document refers to the third sector (although it uses the term ‘civil society’) as an important partner, performing key roles in society, identifies it as a source of knowledge and expertise, and acknowledges its need for support. The document moves to suggest a platform for discussion and collaboration, through a model of tri-sectoral roundtables, including a central roundtable to develop general policies and discuss foundational issue, and thematic roundtables to focus on specific policy issues. The roundtables would include representatives 163

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of government, the third sector and philanthropic business persons, and will be chaired collaboratively. In the call for proposals to manage the roundtables, Sheatufim won. Sheatufim is an organisation dedicated to the promotion of civil society, established by four major philanthropic actors – Zionism 2000, Rashi Foundation, the Jewish Federations of North America (formerly UJC), and Gandyr Foundation (later joined by a fifth foundation – Haruv). In 2008–09, the central roundtable, coordinated by Sheatufim has met various times and concluded with a document setting up the framework for the roundtables and the tri-sectoral deliberations.1 In December 2008, parallel to the ‘Cast Lead’ operation in Gaza, an emergency roundtable was convened that dealt with cooperation between the three sectors during emergencies. In 2009 a roundtable deliberated means to promote volunteerism. This discussion led to a plan to establish a national centre for volunteering, through what was termed a public–social–private partnership.2 The winner of the tender issued in 2011 to operate the national centre for volunteering was JDC-Israel. Further meetings of the central roundtables featured topics such as social enterprise, the financial crisis and the mass protest of summer 2011.

On the tightrope between inside and outside The developments shown here may have some unique aspects such as specific actors or structures that have to do with the specific policy realm we have analysed – the third sector. Yet, they are an example of decentralised policy making, while at the same time maintaining government dominance and control through manipulation of its preferred status within advocacy networks and its close relations with philanthropic foundations and semi-institutional actors such as quasi-NGOs. Policy analysis in the realm of the third sector is conducted through policy or advocacy networks that include Academia, government, philanthropists and third sector organisations. However, these networks are very limited networks – they are inhabited by more or less the same actors. The third sector is large and the organisations in it are numerous, many of them are involved in policy processes in their fields of action, such as health, the elderly or the environment. Those that are engaged in the third sector as a policy realm of its own are few. This results in policy networks that include mostly the same participants, or one could say ‘the usual suspects’, particularly the sector’s infrastructural organisations such as umbrella organisations and organisations that act as collective actors on behalf of the third sector. Certain academics that may be members of one committee can later be contracted to prepare data for another, and possibly contradictory, committee. There are a few foundations and quasi-NGOs that have an interest in the third sector, are clearly seeking to be leaders in the sector, and are engaged in many different pivotal processes and projects at once. This also creates clear power disparities within the networks, due to the close relations between the foundations and government, and due to the resource dependency that often 164

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other actors, namely academics and some third sector organisations, have on the foundations who may be funding their own work. RAW Rhodes highlights the importance of networks as the main institutional form in the new governance. Accordingly, networks themselves become institutionalised and determine the rules of the game among participants in the policy process (Rhodes, 1996). In our case this is very clear, with the persistent composition of participants, and especially due to the fact that some of those regular participants are in themselves institutionalised actors or semi-institutionalised actors that have very settled and close relationships with government. Susan Phillips (2007) notes that an implication of these institutionalised networks is that trust and trustworthiness matter more than ever as a basis for relationship building. The ambivalent attitudes towards ICTR as an external actor trying to take its share of the power afforded by the possession of information on the one hand, and as an instigator and participant in policy analysis processes on the other hand, indicate that trust is lacking in the case at hand. A more extreme example is the cooptation of the Irgunim Bareshet project and the subsequent freezing of data sharing from government to ICTR or any other research centre. This cooptation was possible due to the power disparities within the network, the multiple and sometimes conflicting roles that foundations play in the networks, and the close relationships some foundations have with government. In fact, the role of philanthropic foundations is central to our case. Foundations act as linkers and liaisons, but also as funders, and they often fund more than one actor in the same network. In addition to that, frequently it is expected of them to participate in the funding of the products of the policy network. Some of the foundations have also had a long history of collaboration with government, including build– operate–transfer contracts for public services, or co-funding arrangements over basic social services. Thus, foundations seem to be almost an integral actor in political institutions, at least as far as policy towards the third sector is concerned. Regretfully, in our case, it may be less positive than what Bensimhon-Peleg (2008) has argued, seeing that they have more shared interests and established relations with government than with change-seeking civil-society activists. Another point worth making is that the relationships in the policy networks are often lacking in trust. In a sense we can describe policy analysis in this case as ‘duelling swords’ (Radin, 2000). In fact, as Nissan Limor (2007) shows, throughout Israeli history legislation pertaining to third sector organisations was strongly tainted by political motivations and bargaining, and wasn’t informed or knowledge based at all. All legislation towards the sector is based on the notion of state–society antagonism, and reflects attempts by government to curtail the growing autonomy and influence of civil society. This air of distrust still lingers, as was shown in the various attempts in Israeli government and parliament these last few years to constrain the freedoms of human rights organisations, hamper their international funding, and label them as anti-Zionist and anti-Israeli. Clearly, policy analysis in the area of the third sector is a result of supply side dynamics (Hird, 2005). Government and organised political actors have been 165

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reluctant to ‘stir things up’ with regard to the third sector (Bar and Gidron, 2010). All the processes described above were started by the ICTR, and later on joined in or taken up by government, sometimes only when political pressures force them to, like in the case of the Second Lebanon War. Not surprisingly, being an academic research centre, playing the role of the issue expert, ICTR combined two policy analysis styles: argumentative and rational (Mayer et al, 2004). As such, it was conceptualised by the more powerful actors in the policy networks as an idealistic and non-pragmatic actor, whose contribution is limited to the beginning of the process and must be translated into more practical criteria by those who play the mediating role in the network, that is the philanthropic foundations and government. Other third sector actors have different roles in the system, sometimes of client advisors or ‘hired guns’ (Mayer et al, 2004, 18) and sometimes of participants, adopting accordingly an advisory or democratising style. Finally, policy analysis in the area of the third sector is done by a mix of inside and outside actors and processes. The ICTR and some of the third sector participants are clearly outsiders, and are treated as such. Other third sector actors are more deeply institutionalised in the policy networks, and can be defined as outsiders-within. This is the case of the Zionist institutions, that are formally third sector organisations, but are in fact quasi-NGOs working in close proximity with government. It is also the case for some of the philanthropic foundations involved in the processes, as detailed above. Foundations that have developed institutionalised collaborations with government also tend to be on the very fluid and blurred boundaries between inside and outside of policy analysis processes. This causes the contradiction that can be found in our case between the explicit pluralism of the system and the implicit elitist outcomes inherent in it. It is compatible with Yishay’s notion of circumspect pluralism in Israel’s policy making processes (Yishay, 1999). In this context, what role can change seeking third sector organisations take in policy analysis, noting that they are suspect outsiders, and also that the more institutionalised outsiders-within quasi-NGOs and philanthropic foundations often occupy the third sector ‘slot’ in policy processes? Being an outsider carries its own benefits, and it is conducive to taking several important roles. One is the whistleblower role; another is the policy entrepreneur role. Given the limited access to information that their outsider status dictates, third sector organisations should consider coalescing among themselves to gain power-in-numbers, on the one hand, and collaborate with actors who possess investigative capacity such as academics and journalists. Such coalitions can help them avoid appearing as amateurish ‘moaners’ (Taylor, 2001, 101). This route may help these organisations maintain their public integrity vis-à-vis their constituencies as advocates of their causes (Taylor, 2001). Another skill that these actors should develop is taking advantage of the opportunity structures. For example, in Israel it is sometimes possible for an outsider policy actor to join forces with a specific government ministry in its negotiations with the treasury. Such ‘holes’ in the system present policy ‘windows of opportunity’ for more effective change (Kingdon, 1984). 166

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Thus, developing alternative policy analyses and data, supported by professional policy analysts, and backed up by the bottom-up legitimacy granted by their constituencies, may be the most effective strategy for third sector organisations to engage in policy analysis. A salient example to that role in Israel is the ‘Alternative Poverty Report’ that the Latet third sector organisation has been publishing annually in recent years (www.latet.org.il/en/worlds/latet_change_awareness/). This report has become very effective in stirring a lively public debate of policy, as it galvanised journalists and opposition parties to discuss its findings in the media and in the Kneset. This is a good example of the type of policy analysis engagement that I suggest above, which builds on the potential advantages of the outsider’s role. Notes 1

2

For the document see: www.pmo.gov.il/policyplanning/shituf/Documents/last250209. pdf (in Hebrew). For the document see: www.pmo.gov.il/policyplanning/shituf/Documents/hamlaza. pdf (in Hebrew).

References Aizencang Kane, P, 2004, On the relation between knowledge and policy: Israeli think tanks and the public policy environment, Jerusalem: The Jerusalem Institute for Israeli Studies Alon, G (ed), 2008, Government of Israel, the civil society and the business community: Partnership, empowerment, and transparency, Policy paper, Jerusalem: Prime Minister’s Office Anheier, HK, Salamon, LM, 2006, The Nonprofit Sector in Comparative Perspective. in WW Powell, R Steinberg (eds) The nonprofit sector: A research handbook, pp 89–114, New Haven, CT: Yale University Press Bar, M, 2000, Bureaucracy, politics and income assurance: The policy making process of the income assurance law in Israel, Social Security 58, 54–75 Bar, M, 2001, The involvement of voluntary human service organizations in social policy making process: The process of determining ‘disabled child’ regulations, Society and Welfare 21, 2, 129–58 Bar, M, Gidron, B, 2010, The long journey to the promised land: Policy initiatives towards the third sector in Israel, in B Gidron, M Bar (eds) Policy initiatives towards the third sector in international perspective, pp 159–88, New York: Springer Bar, M, Zychlinsky, E, 2010, The pin that would annoy the Elephant: Interaction between government and philanthropic foundation in developing social enterprises, Jerusalem: Centre for the Study of Philanthropy in Israel, Hebrew University Barber, B, 1984, Strong democracy, Berkeley, CA: University of California Press Bensimhon-Peleg, S, 2008, Jewish philanthropy and the Israeli third sector: The case of Israeli think tanks, Tel Aviv: The Harold Hartog School of Government and Policy, Tel Aviv University

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Bins, A, 2012, Policy networks in Operation Shlomo: Between government and the Jewish agency, Hagira 1, 155–77 Boris, E, Mosher-Williams, R, 1998, Nonprofit advocacy organizations: Assessing the definitions, classifications, and data, Nonprofit and Voluntary Sector Quarterly 27/4, 488–506 Casey, J, 2004, Third sector participation in the policy process: A framework for comparative analysis, Policy & Politics 32, 2, 241–57 CBS (Central Bureau of Statstics), 1996, Non-profit institutions in Israel, 1991, Jerusalem: CBS Child, CD, Grønbjerg, KA, 2007, Nonprofit advocacy organizations: Their characteristics and activities, Social Science Quarterly 88, 1, 259–81 Clarke, J, 2004, Dissolving the public realm? The logics and limits of neoliberalism, Journal of Social Policy 33, 1, 27–48 Evers, A, Laville, J-L (eds), 2004, The third sector in Europe, Cheltenham: Edward Elgar Publishing Ferris, JM, 2003, Foundations and public policymaking: Leveraging philanthropic dollars, knowledge, and networks, Los Angeles, CA: Center on Philanthropy and Public Policy, University of Southern California Gal, J, 2004, Evidence based policy in Israel: Past, present and future, Social Security 66, 5–8 Galnoor, I, Armoni, A, Arnon, A, Bar, M, Gabai, Y, Ghattas, B, Gidron, B, Katan, J, Katz, O, Liel, R, Limor, N, Machul, A, Mulla, W, Ophir, A, Sharon, E, Shiffer, V, Silberstein-Hipsh, S, 2003, The review committee of government policy towards the third sector in Israel: A summary of recommendations, Beersheba: Israeli Center for Third-sector Research, Ben-Gurion University Geva-May, I, Kfir, A, 2000, Developments in policy analysis and evaluation in public administration, Public Administration 78, 2, 409–22 Gidron, B, Katz, H, 1999, The Israeli third sector: Economic data, Beersheba: Israeli Center for Third-sector Research, Ben-Gurion University Gidron, B, Katz, H, Anheier, HK, Salamon, LM, 1999a, Israel: An overview of major economic parameters, in LM Salamon, HK Anheier, R List, S Toepler, , W Sokolowski and Associates, Global civil society: Dimensions of the nonprofit sector, pp 219–41, Baltimore, MD: Johns Hopkins Center for Civil Society Studies Gidron, B, Katz, H, Nativ-Ronen, E, Bechar-Fuchs, A, 1999b, The Israeli third sector database: Preliminary findings, Beersheba: Israeli Center for Third-sector Research, Ben-Gurion University Gidron, B, Katz, H, Bar, M, 2000, The Israeli third sector 2000: Roles of the sector, Beersheba: Israeli Center for Third-sector Research, Ben-Gurion University Gidron, B, Katz, H, Bar-Mor, H, Katan, Y, Silber, I, Telias, M, 2003, Through a new lens: The third sector and Israeli society, Israel Studies 8, 1, 20–59 Gidron, B, Bar, M, Katz, H, 2004, The third sector in Israel: Between civil society and the welfare state, New York: Kluwer

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Gidron, B, Elon, Y, Schlanger, A, Schwartz, R, 2006, The sector of philanthropic foundations and funding organizations in Israel: Its characteristics, functions, relationship with government and patterns of management, Beersheba: Israeli Center for Thirdsector Research, Ben-Gurion University Haugh, H, Kitson, M, 2007, The third way and the third sector: New Labour’s economic policy and the social economy, Cambridge Journal of Economics 31, 6, 973–94 Hird, JA, 2005, Power, knowledge, and politics: Policy analysis in the states, Washington, DC: Georgetown University Press Katz, H, Elon, Y, Gidron, B, Babis, D, 2006, Data on the Israeli third sector: The state of the sector – Quantitative profile, 2002 and recent developments pertaining to the third sector, Beersheba: Israeli Center for Third-sector Research, Ben-Gurion University Katz, H, Elon, Y, Raviv, E, Levinson, E, Yogev, H, Yaakobi, M, Gidron, B, 2007, Third sector organizations during the Second Lebanon War: Advantages, limitations and relations with government, Civil society and Third Sector in Israel 1, 1, 39–64 Kingdon, JW, 1984, Agendas, alternatives, and public policies, Vol 45, Boston, MA: Little, Brown Kendall, J, 2000, The mainstreaming of the third sector into public policy in England in the late 1990s: Whys and wherefores, Civil Society Working Series, London: Centre for Civil Society, London School of Economics and Political Science Limor, N, 2007, The politics of the nonprofit associations law, Ramat Gan: Department of Political Science, Bar-Ilan University Limor, N, 2012, Israel’s nonprofit organizations Almanac: Summary of findings, June 2012, Lod: NPTech McGann, J, 2007, 2007 Survey of think tanks: A summary report, Philadelphia, PA: Foreign Policy Research Institute, Think Tanks and Civil Societies Program Mayer, IS, Van Daalen, CE, Bots, PWG, 2004, Perspectives on policy analyses: A framework for understanding and design, International Journal of Technology, Policy and Management 4, 2, 169–91 Meyers, HE, 2009, Does Israel need think tanks?, Middle East Quarterly 16, 1, 37–46 Mosley, JE, 2010, Organizational resources and environmental incentives: Understanding the policy advocacy involvement of human service nonprofits, Social Service Review 84, 1, 57–76 Phillips, SD, 2007, Policy analysis and the voluntary sector: Evolving policy styles, in L Dobuzinskis, DH Laycock, M Howlett (eds) Policy analysis in Canada: The state of the art, pp 497–522, Toronto: University of Toronto Press Radin, B, 2000, Beyond Machiavelli: Policy analysis comes of age, Washington, DC: Georgetown University Press Rhodes, RAW, 1996, The new governance: Governing without government, Political Studies 44, 4, 652–67 Salamon, LM, 1994, The rise of the nonprofit sector, Foreign Affairs 73, 4, 109–22 169

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Salamon, LM, Anheier, HK, List, R, Toepler, S, Sokolowski, W and Associates, 1999, Global civil society: Dimensions of the nonprofit sector, Baltimore, MD: Johns Hopkins Center for Civil Society Studies Schmid, H, Bar, M, Nirel, R, 2008, Advocacy activities in nonprofit human service organizations: Implications for policy, Nonprofit and Voluntary Sector Quarterly 37, 4, 581–602 Scholte, JA, 2002, Civil society and democracy in global governance, Global Governance 8, 281–304 Schwartz, R, 2002, Controlling government: Budgeting, evaluation and auditing in Israel, Israel Affairs 8, 4, 65–87 Stone, D, 2006, Think tanks and policy analysis, in F Fischer, GJ Miller, MS Sidney (eds) Handbook of public policy analysis: Theory, methods, and politics, pp 149–57, New York: Marcel Dekker Inc Taylor, M, 2001, Partnership: Insiders and outsiders in M Harris, C Rocheste (eds) Voluntary organisations and social policy in Britain: Perspectives on change and choice, pp 94–107, London: Palgrave MacMillan Yishay, Y, 1991, Land of paradoxes: Interest politics in Israel, Albany, NY: State University of New York Press Yishay, Y, 1999, Democracy for the people? Welfare policy making in Israel, Social security 56, 126–37 Walzer, M, 1992, The civil society argument, in C Mouffe (ed) Dimensions of radical democracy: Pluralism, citizenship, community, pp 89–107, London: Verso

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Policy analysis education in graduate programmes in Israel Iris Geva-May and Anat Gofen

Introduction This chapter has a threefold role in the context of the ILPA volume entitled Policy Analysis in Israel. It proposes to examine the contribution of the Programmes of Public Policy and/or Administration (a) to the public service in Israel at large; (b) to the instruction of public policy; (c) to the instruction of policy analysis. These foci provide a basis for discussion on the state of the art of policy analysis instruction and its challenges in Israel. These foci, respectively, stem from the hypothesis that the educational programmes: (a) should create education and training courses of study that are ‘fit for purpose’, that is, serve the field of public policy in general; and (b) public policy being the operational output of any public governance framework, these programmes should advance acceptable practices in the policy analysis domain. Policy analysis is seen as an integral part of the public policy making process, which renders policy planning and decision making systematic and rational – thus more efficient, effective, reliable and transparent. As graduate programmes at MA level mainly train present or future public servants the ability of the latter to instill practical skills is paramount. International normative concepts and practices in public policy and policy analysis education In analysing the state of the art of policy analysis graduate instruction in Israel, we note two types of public policy programmes: the first stems from the orientation that deems necessary the provision of knowledge about the policy processes and their intricacies – political, administrative, or disciplinary in the social sciences liberal arts tradition; the second, emphasises policy analysis as a crucial junction in the actual ‘doing of public policy’, within the public policy process. These two aspects of public policy instruction have been identified as long ago as 1989 by David Weimer and Aidan Vining (1989; 2010) who differentiated between policy analysis on the one hand and research in public policy, administration, political sciences and social sciences – each with their respective purposes, constraints and methods.

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The distinct normative principles of policy analysis as a stand-alone domain are at the heart of the public policy and policy analysis movement started in the 1960s in the US at a time of major public expenditure on welfare and cold war strategic public investments. Policy analysis rationality accords with demands that institutions account for their actions, that policy making has to prove reliable (Weber, 1968; Hannan and Freeman, 1984) and that institutions seeking advantage in a highly competitive and dynamic national and global market have to be effective (Weimer and Vining, 1989: 2010; Boardman et al, 2006; 2010), in Lindblom’s (1958) words ‘involving comparisons and interactions of values and politics’. In this context, since the late 1960s, the Programmes of Public Policy have been seen as a pipeline for a better and more reliable public service. John W Elwood, in his Challenges to public policy and public management education of 2008, outlines the morphology of the field of public policy instruction and how public policy graduate education can address, through policy analysis, the challenges of public policy. The UC Berkeley Graduate School of Public Policy founded in 1969, with policy analysis as a new core field, reflects a canonic basic model for Programmes of Public Policy that has been increasingly adopted internationally (Jenkins Smith, 2006; Geva-May and Maslove, 2006; 2007; Geva-May et al, 2008; Elwood, 2008). The notions launched by Aaron Wildavsky in ‘Principles for a graduate school of public policy’ (1979, 407–19) for policy analysis as a domain of study and instruction, feature specific policy analysis methods, and advocates extensive practice and exposure to ‘real life’ projects, practicums and capstones. Harvard’s Kennedy School, initiated at the same period of time, pursued similar policy analysis principles. Their case studies series, which apply policy analytic practices to ‘real life public policy’ circumstances, emphasise the intensive training requirements for mastery of policy analysis skills in the profession of policy analysis. Meltsner coins the terms ‘technician’, ‘expert’ and ‘politically’ astute analysts as opposed to those claiming to do policy analysis, but lacking the adequate toolboxes of the profession. Majone speaks of embodied skills of a profession through practice (1989). Endowing students with the adequate policy analytic sets of skills in the profession has been seen by Schools of Public Policy as an imperative task. Ever since Wildavsky’s seminal Speaking truth to power (1979), a large international literature offers explicit methodologies, taxonomies and frameworks for ‘doing’ policy analysis, prescribing tool-boxes of policy analysis skills and advising on ways to practice those skills (Jenkins-Smith, 1982; Cook and Vaupel, 1985; Torgerson, 1986; Jennings, 1987; Weimer and Vining, 1989; 2005; 2010; Dunn, 1994; Durning and Osuna, 1994; Geva-May with Wildavsky, 1997; 2002; 2011; Bardach, 2000; 2008; 2011; Scott and Baehler, 2010; MacRae and Wilde, 1979; Patton and Sawicky, 1993). All in all, methodological policy analysis models share the common guiding principle that policy analysis is a focal part of the policy process, must not be 172

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confused with the ‘policy process’, and is based on a very specific professional toolbox of skills required to reliably advise policy decision-making. The policy analysis literature fundamentally recognises a number of core elements in this domain. The stages model (DeLeon, 1999; Geva-May with Wildavsky, 1997; 2011) captures agenda setting (Kingdon, 1995), processes of problem definition (Bardach, 2000; 2011; Dery, 1986), modelling of policy solutions and feasibility tests on those solutions (Geva-May with Wildavsky 1997, 2011; Majone, 1989; May, 1989), alternative selection for implementable recommendations (Ingram and Schneider, 1997; Pressman and Wildavsky, 1973; 2010); and advocacy and argumentation in support of policy adoption and legal legitimation (Fischer and Forester, 1993). These craft specifics reflect the expectation raised in the policy analysis instruction literature for what should be advanced by programmes of public policy. As long ago as 1989, Majone asserted that: Policy analysis is best appreciated in relation to the craft aspects of the field while the craft skills of an analyst are a repertoire of procedures and judgments that are partly personal and partly social and depend as much on his own experience as on professional (policy analysis) norms and culturally determined criteria of adequacy and validity. (p 3) To adapt the craft features to the context of the policy problem, today, policy analysis assigns an increasing role to the governance, administrative and political culture contexts of the policy problems under investigation and their comparative global implications for decision-making (Colebatch, 2002; Geva-May, 2005; 2011; Geva-May and Maslove, 2006; 2007; Hanjal, 2003; Howlett and Ramesh, 2005; Luger, 2005; Mayer et al, 2004; Radin, 2000; 2013). The extent to which the craft aspects of policy analysis are extended by the Israeli Graduate Programmes of Public Policy – are at the heart of this chapter. So are the NASPAA Accreditation Standards applied to over 280 programmes which go to make up the NASPAA12 list of accredited programmes in the US. Thus, an overriding consideration is ‘doing’ policy analysis, that is, introducing learners to theoretical as well, to professional reasoning (Geva-May, 2005; Smith, 2005; Weimer, 2005) through real life assignments, capstones and internships. In this respect we can clearly identify the difference between social sciences policy studies: that is, knowledge ‘about’ the policy process; and policy analysis, that is, ‘doing’ and producing policy alternatives, here and now, ‘within’ the policy process). In the last two decades policy analysis has been widely embraced internationally, as a profession and academic field of study to address national and inter-national public service needs. In Europe, the policy programmes still have a strong theoretical orientation, and public policy programmes are largely units within Political Science, Public Management/Administration/Business. In Canada we note the same trend with a number of new policy schools established and having 173

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an impact in the field. In New Zealand and Australia policy analysis has been heavily adopted within the Westminsterian system, with ANZOG serving as an important institute for executive instruction. In Eastern and Central Europe as well as in Asia and South East Asia policy analysis has strong proponents, for example at the Policy School at Central European University, and Public Policy at HSE, Moscow and Kazakhstan. Policy analysis also has a strong presence at the Lee Kuan Yew School of the National University of Singapore, in Hong Kong, Shanghai, Taipei, Seoul and so on. Many US trained faculty lead the policy analysis domain in order to address national public service needs. Similarly, in Israel, the development of public policy programmes has been driven by national public service needs.Denhardt (2001) insightfully summarised the questions applicable to designing graduate programmes of public administration or policy: should educators educate students with respect to theory or practice? Should MPA (Master in Public Administration) and MPP (Master in Public Policy) programmes prepare students for their first jobs or for those to which they might aspire later? What are the appropriate delivery mechanisms for MPA and MPP courses and curricula? In translating these questions into operational components for the study of the programmes of public policy in Israel, we identified the following fundamentals as key variables: • Context: To what extent policy studies and policy analysis are grounded in the history, culture, politics and other contextual realities of the specific public service in Israel (see the next section on the background context). • Theories of public policy and public administration: To what extent administrative and policy-making process theories, rationales and approaches are interwoven with policy analysis practice (see the section on profiles of the programmes in the study). • Policy analysis methodology: To what extent a core normative policy analysis methodology is taught as a stand-alone domain of study and practice (see the section on profiles of the programmes in the study).

The context: background to developments in the Israeli public service To understand the developments of public policy education in higher education in Israel it is important to understand its rather late emergence, and status as a ‘work in progress’. Interestingly, despite the Israeli scholars who shaped the field of public policy as a profession and who echoed their convictions loud and clear across oceans – Yehezkel Dror being one of the more prominent scholars in this emerging field – public policy, policy analysis and public administration instruction in Israeli higher education has been adopted only in the early 1990s. In this respect the Israeli programmes of public policy are in good company with similar late developments in Canada and Europe, not to mention Asia and South America. 174

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Established in 1948, Israel has been a new state with a new public administration which inherited two contradictory administrative traditions: the British Colonial civil servants tradition of political neutrality and professional norms developed over the years by the British Colonial Office; and the Jewish agencies characterised by improvisation, political activism, internal politically oriented subdivisions and strong nationalism. Furthermore, until the 1990s, security problems, limited resources, lack of stability and huge waves of immigration put aside more mundane issues such as administrative reforms and systematic policy planning approaches for quite a while (Geva-May and Kfir, 2000). Furthermore, things worked just fine, by default, despite the lack of systematic approaches to public policy planning (Sharef, 1962) which reinforced the existent administrative and policy-making routine. In the 1990s, a number of incidents, economic concerns and the complexities of tasks in the public service in the increasingly global and technologically astute world indicated that the lack of justifiable tools and guidelines for policy making could no longer be acceptable for responsible policy making. It became evident that the role of the Ministry of Finance, the Treasury Board and the government’s Commission roles of analyst, coordinator and assessor of outputs were not sufficient and that there was a need for a sophisticated political and administrative leadership (Geva-May and Kfir, 2000). At first the criticism came from academia (especially Dror, 1968; 1972a; 1972b; 1972c; 1983), but in time it crossed lines and was raised by political and interest groups calling for accountability and transparency, by parties and members of the Parliament (Knesset), and constituted the work of different committees calling for reforms in the public service. The five year work of the Kubersky Committee identified as ‘(the) most urgent needs in public administration in Israel’ the reformulation of priorities and policy-making practices in the public service, as well as the institutionalisation of systems for advanced policy evaluation, analysis, planning and implementation (Kubersky, 1989). The Israeli higher education institutions heard the call loud and clear. Their faculty, mostly American trained and following the highest scholarly standards, responded to the challenge. They attempted to duplicate principles advocated at the time by the emerging field of public policy and policy analysis in the US, and engaged in what would become a turning point in public policy in Israel: the establishment of programmes of public policy. The first programme of public policy was founded at Tel Aviv University in early 1990s building on a unit for urban and transportation planning led by economists. Still highly influenced by economic analytical practices, it became a Department of Public Policy in 2006. The School of Public Policy at the Hebrew University in Jerusalem was founded in early 2000s as a ‘programme’ and its course of studies is the only one closely following the Berkeley tradition. Recently, Sapir College’s public policy programme, followed suit.3 The programmes of Haifa University and Ben Gurion University of the Negev are based on a predominately liberal arts public administration orientation with 175

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public policy within the larger institutional arrangements. At Bar Ilan University MPP courses are offered within the Political Science Department as a sub-sectional course of study while at the Interdisciplinary Centre (IDC) offers public policy courses in the School of Governance.

The study: Profiles of Israeli programmes of public policy/affairs/administration 2013–14 To provide findings informing this chapter, we looked into Council for Higher Education (MALAG)4 recognised MA programmes of public policy and/or administration (see the next section). To assess the degree to which policy analysis is enhanced in their course of studies we grounded our criteria upon universals of public policy instruction as well as on the policy analysis principles brought forward in the literature of the last four decades (Meltsner, 1972; 1976; Weimer and Vining, 1989; 1992; 2010; Jenkins-Smith, 1982; Cook and Vaupel, 1985; Torgerson, 1986; Jennings, 1987; Weimer and Vining, 1989; 2005; 2010; Dunn, 1994; Durning and Osuna, 1994; Geva-May and Wildavsky, 1997, 2011; Bardach, 2011; John, 2013) and NASPAA’s Accreditation Standards. Rationale for the choice of institutions The three questions driving this study apply mostly to graduate programmes. Therefore, the programmes discussed are those recognised by the Israeli Council of Higher Education (MALAG) as providers of an MA degree in public administration and/or in public policy. They include seven institutions of higher education: Bar Ilan University near Tel Aviv, Ben Gurion University in the South, Haifa University in the north, the Hebrew University in Jerusalem, and Tel Aviv University as well as two academic colleges: Interdisciplinary Centre of Herzliya and Sapir College in the south. Data collection The data informing this chapter was collected over 2013–14 using the following methods and tools: (a) content analysis of internet postings by the target institutions; (b) content analysis of public policy and policy analysis course syllabi; (c) an informative survey questionnaire for heads of the institutions or assigned representatives; (d) email or telephone interviews with heads of programmes or other assigned administrative faculty for clarifications, explanations and validation of findings. The survey questionnaire was adapted from the online US survey versions commissioned by APPAM and developed by Hank C Jenkins-Smith (2006) for US programmes of public policy, and by Geva-May et al (2008) for international programmes of public policy in Europe, Australia, New Zealand 176

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and Canada. Our triangulation of the four methods and tools, as well as the final report approval of the heads of programmes, allowed for the validation of information and findings about the characteristics of each one of the programmes. Choice of variables To establish the contribution of the institutions to public service in Israel, to public policy in general and to policy analysis in particular, we considered their respective vision as well as their specific policy courses of study and syllabi. More specifically, we looked into the following, explicit variables and sub-variables for each one of the programmes: Vision This variable positions the aims and scope of each individual programme, inclusive of its specific conceptualisation of contribution to the public service in general, public policy and policy analysis instruction. Administrative aspects 1 The year the programme was established: indicating the length of time the programme has been in existence and its role to advancing public policy instruction in Israel. 2 Organisational structure: the nature of the programme, whether it has expanded; the position granted by the university to the programme (programme, department or school) and whether it is an independent unit or part of a wider organisational structure with general goals. 3 Partnerships and cooperation: to what extent a programme seeks to go beyond the academic parameters and serve the community and the public service at large. 4 Number of faculty members and their academic status: positions the level of expected research and teaching. 5 Number of administrative staff: indicates the support provided to the programme. 6 Number and ‘type’ of students: the level of the students (for example, acceptance criteria), the capacity of the programme and its public service outreach (for example, executives, cadets). The nature of the programme 1 Core curriculum: the main courses required, to what extent they support the vision and scope of the programme, and the extent to which the programme follows or diverges from normative public policy programmes.

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2 Elective courses: extent to which they address the local social or political concerns in Israel. 3 Policy analysis courses: whether and to what extent policy analysis is offered as a standalone normative course of study. 4 Number of credits for degree completion: points to the academic rigour towards degree completion and the relative place given to public policy studies and policy analysis. 5 Additional requirements: degree of practical exposure; degree of research orientation.

Study findings This section analyses each one of the graduate courses of study in programmes of public policy and/or public administration in Israel based on the variables outlined above. The questions driving this study apply to the nature of the programmes, that is to the extent to which the programmes a) attain their respective vision as relates to service to the public domain; b) offer theoretical liberal arts knowledge ‘about’ the policy process; (c) offer standalone courses of policy analysis comparable to normative programmes of public policy. Governance and Public Policy, Political Studies Department, Bar Ilan University5 Bar Ilan University’s Political Studies Department offers an MA in Political Science with a selective specialisation in Governance and Public Policy. Vision The vision of this department is ‘to reach out to those interested in politics and governance’. According to their website, the academic degree extended in political science should provide the knowledge, analytical skills and understanding base required for careers in the government, international relations and diplomacy, as well as in the industry and the private sector. Administrative aspects Part of the Faculty of Social Sciences, this department offers six MA programmes of study, one of which, as from 2000, is Governance and Public Policy. The department involves 38 faculty members and 30 adjunct teachers, only three of whom teach public policy oriented subjects. Ten administrative staff serve the department’s faculty and students. The department has about 1,200 BA, MA and PhD students inclusive of post-doctoral fellows; about 250 students are enrolled in the Governance and Public Policy specialisation. The four-semester programme offers research and non-research choices, as well as structured courses in Audit and in Public Administration. The research programme requires 28 course credits 178

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and an MA thesis, while the non-research programme requires 36 credits without a thesis. The acceptance prerequisite is a BA average grade of 83/100 for the research programme, and 80/100 for non-research. Political science courses are required of students who do not have this undergraduate degree background. The structure of the programme Approximately half of the course credit requirements in the governance and public policy programme are the same for research and non-research students. They include: Theories and Approaches in Political Science, Theories and Approaches in Public Administration, Political Leadership, and Israeli Politics. Research students take a course in research methodology towards their theses. In summary: At Bar Ilan University policy studies is addressed within a specific, purposely-designed MA course of study in Governance and Public Policy in the Political Studies Department with a liberal arts orientation and with only three faculty members supporting the policy domain alone; students may choose to take courses about public policy, administration, politics or governance, side by side with courses of a more theoretical nature in political science. Department of Public Administration and Public Policy, Ben-Gurion University of Negev6 Vision This programme focuses on public administration and public policy and is designated ‘to train quality leadership to management and head office positions in the public sector or the private sector…[and to] contribute to analysis and decision-making skills, evaluation, policy design and policy implementation’. The programme is multi-disciplinary, emphasises management, social and economic aspects and reflects the multi-cultural nature of Israel. Administrative aspects Established in 1996 and part of the Faculty of Management, the Department of Public Administration and Public Policy includes eight tenure track faculty members, and 12 adjunct teachers as well as two administrative staff serving the faculty and about 200 students per year. The department offers both research and non-research programmes. The former requires 30 course credits and a thesis; the latter requires 42 course credits inclusive of one seminar. Acceptance to the research programme is granted following one semester at Master’s level at an average grade of 85 and thesis research outline approval.

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Priority is given to candidates with practical experience in management or those whose BA average grade is at least 80, meet ESL requirements and have a strong background in social sciences – specifically, Economics, Political Science, Sociology, Psychology and Geography. There are two optional courses of study: Economics, Business and Society; and Public Management. Each course of study includes two core courses, three electives and one seminar. The nature of the programme In both the Public Management, and the Economics, Business and Society courses of study, the students study a basic course in Public Policy, Planning, and Monitoring in the Public Sector, Research in Public Administration, as well as Economics for Public Administration. There are specific domain-related curricular requirements in the Public Management Programme with courses in Planning, Measurement, and Monitoring in the public sector; Organisational Behaviour and Strategy; and Public Management. The students in the Economics, Business and Society Programme take courses in Inequality and Economic Growth: Theory and Applied Policy; Non-competitive Markets, Welfare and Regulation; and Government Society and Business; and Advanced Issues in Public Policy. Knowledge about public policy is extended through Introduction to Public Administration, Public Policy, Quantitative Models to Policy Evaluation, and Applied Macroeconomics. Students write a final research seminar paper but there are no practicum, capstones or internship requirements. In summary: the Department of Public Administration and Policy provides a course of study, which contributes to the professional development of public service personnel and to the advancement of the public sector. They prepare and endow about 100 research and non-research graduates yearly, with a knowledge base in public administration and management, as well as with concepts about public policy and policy analysis. The Division of Public Administration and Policy, Haifa University7 Vision The vision, as reflected on the division’s website, points to the ‘training of public servants and excellent scholars able to advance the field of public policy, better serve the public, and bring the public administration to new horizons’. The skills required are meant to allow the students to pursue public service careers and develop public service commitment. The more operational targets refer to identifying and resolving difficulties in the public management, policy making,

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policy design and implementation based on firm evaluation, methodological research and analytical skills. Administrative aspects Autonomous since 2003, the Division of Public Administration and Policy has been part of the School of Political Science, which comprises two additional departments: International Relations, and Governance and Political Thought. It includes eight faculty members, one professor emeritus, and 20 adjunct teachers. The two administrative staff serves the Division’s faculty and about 250 MPA students per annum. The Division provides a research programme with thesis and non-research programme without a thesis requirement. Their four specialisation programmes are: Local Government, Internal and Public Auditing; an Executive Programme in Public Administration; and as from 2013, a Cadets Programme in Local Government in collaboration with the Israeli Ministry of Interior Affairs and an NGO for the advancement of the municipal public service (ATIDIM). In all programmes course completion spans two years (seven courses in the research programme, nine in the non-research programme, and 11–12 specialisation courses). Only the Executive and Auditing programmes include a practicum in their specific domain. The research programme extends a third year dedicated to an MPA thesis. Interestingly, the student acceptance criteria in this programme are a degree in political science or equivalent supporting its liberal arts orientation and an average grade of 80. The research programme students must obtain an average grade of 80 in their research workshop, and 86 or higher in the Scopes and Methods in Public Administration and Policy. The Executive or Cadet candidates are accepted with an average of 76 in fields other than Political Science. The nature of the programme In addition to the courses listed above, the core curriculum in the Division of Public Administration and Policy includes Political Economics and Public Policy Making; Advanced Research Methods for Public Administration (workshop); and Organisational Theory. It is notable that the first two courses offer components of public policy, policy analysis terms and policy-making implications. The research programme students can choose between a quantitative or qualitative methods workshops and two elective courses. The non-research programme includes courses in Planning and Budgeting; Local Politics; and Leadership. In summary, this Division, which is embedded within a Political Science School, has a strong traditional public administration focus seeking to contribute to the public service. Their annual 120 students are exposed to a variety of domains including auditing, which is unique to this institution. It also offers two courses bearing ‘public policy’ in their titles and in some of their content. Standalone 181

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Policy Analysis courses are not offered, but the research topics and student outputs reflect knowledge about public policy processes. The programme offers both research and non-research academic exposure, preparing both public servants and academic track researchers. The Federmann School of Public Policy and Government, the Hebrew University8 Vision The School’s vision statement acknowledges that only ‘a professional, moral and creative public sector can lead the Israeli society into the next era’. Located in the Faculty of Social Sciences, the School aspires to contribute and advance the professional quality and moral awareness of the public sector in Israel. To do so, it specifically adopts a pedagogic approach aiming ‘to provide the Israeli public sector with methodological and analytical skills to effectively participate in addressing public problems’. To address this goal, the multi-disciplinary curriculum focuses on research and policy analysis as well as on methodological and practical skills. Administrative aspects The Federmann School is an independent unit in the Faculty of Social Sciences, with 14 faculty members, and over 20 part-time adjunct teachers. Seven administrative staff serves the faculty and about 200 students per annum. The School offers four MA programmes and a number of training programmes for civil servants. The first MA programme, the Honours programme, was established in 2002, followed by the Executive programme in 2005, the Midcareer programme in 2011 and the Israeli Public Service Cadets programme in 2012. The latter two are joint programmes with the Israeli Public Sector Commission and explicitly follow the vision set in the 1990s by the Kubersky and the Public Service Commissions. In each one of the four programmes the core curriculum is similar, the number of students in each ranges between 25 and 35 per annum, and spans over four semesters. The Honours programme requires 36-point core courses and eight point elective; it is research-oriented with courses in research methodology and a final MA thesis. All other programmes require 46 credits and a final policy paper. The acceptance requirements in the Honours and the Public Service Cadets Programmes are a GRE, a BA with honours and an individual interview assessing students’ motivation, analytical, writing and oral presentation skills. The nature of the programme The School’s different programmes follow a classic approach to public policy and policy analysis studies very similar to the components and design of programmes of public policy in North America: Public Policy Theory in the first year, an 182

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introductory and an advanced workshop-oriented course in Policy Analysis (first and second year); Public Economics Micro and Macroeconomics; Statistics; Public Law; and Civil Service Ethics. Additional courses include Introduction to Public Administration; Decision Making; Organisational Studies (Honours and Cadets programmes); Leadership; and practitioner-oriented courses for the Mid-career programme students such as: Organisational Change; and the Israeli Public Sector. The students of all four programmes are trained as policy analysts doing real life policy analysis of real public policy issues. Throughout the course of study they are required to write a number of policy papers, memos and reports. The Cadet programme students are placed in one-year internships; in the other programmes, there is a quasi-internship requirement: the production of a policy analysis paper for a real customer. In summary, the School seeks to provide tools for at least four types of student populations, thus addressing several layers of the Israeli public service. The School is primarily policy analysis oriented, offering both theoretical and practical training. The four programmes allow for an understanding of the public policy systems. Most importantly, they offer methodological and analytical toolboxes through policy analysis and capstones. The School provides the field about 120 well-trained students in policy analysis, taught by a relatively high number of faculty – 14 full-time faculty. The research and non-research academic exposure prepares both for the public service and the academic track. The Department of Public Policy,Tel Aviv University9 Vision The vision adopted by this Department is to provide high-level training for public service candidates in order to advance public policy in Israel. It aims to prepare their graduates for service in the government, local authorities, and third-sector organisations. It seeks to do so by extending theoretical and practical knowledge of implementation and evaluation; and political, economic, legal and social aspects of public policy in a variety of policy domains. To cite their website, the programme provides ‘relevant knowledge to meet current public problems and future policy challenges’. Administrative aspects Established in 1985 as a centre in urban planning, it became the first Israeli Programme of Public Policy in the early 1990s, and an independent Department as part of the Faculty of Social Science in 2006. It features eight tenure track faculty members, and 12 adjuncts. Two administrative staff members provide services to the faculty and about 150 students per annum. The Department has been recognised as a preferred academic institution in the profession by the Israeli Public Sector Commission. It features research and non-research programmes, 183

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both established in the early 1990s, an Executive programme, established in 2004, and a joint degrees with Chicago University’s Harris School of Public Policy (since 2005), and the Wagner School of Public Policy, New York University (since 2012). There are about 150 students enrolled yearly, of which 40–50 are in the Executive programme. The completion requirements are 38 and 33 credits in the non-research and research programmes, respectively. These comprise nine elective credits in the research programme, and three in the non-research programme. With the exception of the Executive’s three semesters, all other programmes span over four semesters. The acceptance criteria are an undergraduate average grade of 80, and at least five years of in-service experience and a 75 average grade in the Executive programme. Following the North American prevalent approach, those students who do not have a BA degree in Economics and Statistics have to complete such background courses as a pre-requisite.In the joint programme with the Harris School of Public Policy students study, inter-changeably, in Tel Aviv and in Chicago and have to meet the Harris School acceptance and completion requirements in order to be granted an MA degree by both universities. The nature of the programme The same core curriculum is taken by both the research and the non-research students. Conceptually and operationally the course of study follows on the Harvard Kennedy School MPP curriculum. It includes an Introduction to Public Policy; Introduction to Public Law and Ethics; the Social and Political Aspects of Public Policy; Micro Economics (first semester); Statistics and Research Methods (second semester; Public Economics (third semester) and electives in various domains and aspects of public policy. The research programme students have a research workshop and final thesis requirement. It is notable that there is no final policy or policy analysis paper requirement. Introduction to Public Policy, Social and Political Aspects of Public Policy, and Public Economics concern public policy with mention of policy analysis aspects and incorporate policy analytic practices overtly. In the former course, there is significant attention paid to the training of students in approaches to policy analysis within assignments and a course policy paper. The programme offers two seminars which explicitly operate as clinics: the first, designed to improve environmental management and the second conducted in collaboration with the Israeli branch of Transparency International (‘Shvil’). In both clinics the clients are local authorities. The students’ final assignments are presented to actual clients in a public conference. Since 2012, the department offers, jointly with the School of Management, a semester-long workshop engaging students and decision makers in a dialogue on major decisions and reforms.

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While the Executive Programme features the same course requirements, students also take a course in Evaluation of Public Programmes and Projects using real life public policy projects, and applying different methods of cost–benefit analysis and evaluation, such as the World Bank method. In summary: the goals of the Department of Public Policy at Tel Aviv University are to provide theoretical and practical knowledge as well as economic, legal and social awareness, attained through a rigorous course of study in these disciplines with special emphasis on cost–benefit analysis and economic evaluation. Eight full-time faculty teach 150 graduates yearly. The students are exposed to Introduction to Public Policy as well as Social and Political Aspects of Public Policy implementing the knowledge base acquired through real life assignments with a policy analysis orientation. Nevertheless, it is notable that there are no explicit courses in Policy Analysis and its practice. The department prepares both public servants and academic track researchers through its research and clinical exposure contributing to the basic knowledge required in the public service. The Lauder School of Governance, Diplomacy and Strategy, IDC (Interdisciplinary Centre of Herzliya)10 The Interdisciplinary Centre in Herzelya (IDC), near Tel Aviv, is a private college. It includes the Lauder School of Government, Diplomacy and Strategy. This School offers a BA as well as an MA in Government, with specialisations in Public Policy and Administration; Political Marketing; Security and Counter Terrorism; and Diplomacy and Conflict Resolution. Vision The vision of the School is to train students to work in the public sector and in the academia. The faculty, according to their website, includes ‘expert theoreticians and practitioners’. Administrative aspects Started in 2009 with 35 students per annum, the MA programme at IDC offers a non-research course of study in Public Policy and Administration that lasts three consecutive semesters over one calendar year. Their research programme takes two years and students are required to complete a Master’s thesis and thesis defence. The non-research programme requires seven core course credits, eight basic course credits, and 14 compulsory course credits. Additionally, students take five elective courses in any domain of interest, sustainability being one of the recommended subjects. The courses can be taken either in Hebrew or English. The research students write a research thesis. The academic faculty of the entire School includes 21 professors and several adjunct teachers who are supported by three administrative staff. 185

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The nature of the programme Students in the specialisation in Public Policy take core courses in Research Methodology; Decision Making; and a Topical Seminar. Additional basic courses include Public Policy and Administration; as well as three of the following: Social and Economic Policy; Governance and Politics in Israel; Political Leadership, Political Thought; Public Administration Reforms; International Political Marketing; and International Political Economy. Electives include ‘Two Harvard Workshops’ in Persuasion, and Experimental Research; as well as Urban Planning; Policy and Strategy Simulation; and Energy Policy. The programme links theory to actual practice through engagement in public affairs simulations, consulting to local government, debating guest speakers (practitioners, consultants, government officials) and internships. In summary, this programme addresses public service advancement through a course of study, which contributes to the professional development of public service personnel through a liberal arts approach rather than a practice oriented one. Policy analysis is not a standalone course, but there is on-going exposure to and discussions about policy foundations and policy issues across the curriculum. Department of Public Policy and Public Administration, Sapir College11 Vision The vision of the MA Programme in Public Policy at Sapir College is ‘to nurture a public service leadership addressing the public challenges of Israel, in a thoughtful, professional, responsible, yet daring, way’. Located in the Negev (southern desert region of Israel) this programme serves a very specific diverse and dispersed periphery population and acknowledges its needs for public service skills. The programme involves 25 students per year ‘willing to contribute to society’ and provides them with a ‘tool box of ideas and skills based on research, philosophy and analytics as known in political science, economics and management’. Policy analysis oriented, the Programme specifically seeks to endow the students with those skills that would enable them to analyse and evaluate public policy and recommend policy alternatives contributing to ‘public well-being’. Administrative aspects Part of the Faculty of Social Sciences, the Policy Programme was founded in 2007. Eleven tenure track faculty members, two adjunct teachers and two administrative personnel address the needs of about 40–50 students per annum. The programme has an explicit non-research orientation. The students are required to take 40 course credits out of which eight are electives. To be accepted in the programme students are required to have a BA with an average of 80 and 186

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take part in a pre-acceptance workshop. The programme lasts four semesters and includes an explicit major course of study in Policy Analysis. The nature of the programme The courses offered at Sapir College include: Economics and Public Policy; Introduction to Policy Analysis, Leadership; Methodology and Statistics, in the first year. In the second year, the courses are: Economics and Public Policy; Introduction to Policy Analysis. The latter involves policy analysis assignments. It culminates in an integrative three-days simulation of a quasi ‘real life’ policy analysis. Students also take courses in Theories in Public Policy; Programme Evaluation; Political Analysis; Issues in Public Administration; and an Integrative Capstones. In summary, his programme provides students with skills in a variety of core courses, with an emphasis on policy analysis practice, as normatively acceptable in schools of public policy in the US. It should be noted that this particular programme is a professional non-research programme. Located in the Negev, and serving a variety of ethnic and socio-economic populations of a highly dispersed desert region, the initiation of this Programme and the foundations that it extends, render a particularly valuable contribution to the public service in this part of Israel.

Discussion: the state of the art The focus of the ILPA book series and of the Policy Analysis in Israel volume is policy analysis. This chapter looks into the role of the Higher Education Graduate Programmes as the pipelines endowing students with adequate skills in this public service profession. We investigate and compare the state of the art of the programmes of public policy and/or administration in Israel against normative methods of policy analysis as advanced in the policy analysis and policy analysis instruction literature. These criteria are advocated also by the NASPAA Adjudication Standards and have been gradually adopted in Europe, Australia, New Zealand, South America and Asia. Nevertheless, in no way do they exclude other criteria possible judgement calls, which might have been adopted by the Israeli programmes in designing their curricula. This study also allows a larger scope – that of the Israeli public service developments and needs, and the extent to which the institutions of higher education in Israel cater for them through public administration, public policy and policy analysis instruction. In this section we discuss the Israeli context in which the public policy studies and policy analysis have developed, the profile of programmes, and finally their contribution to the public service, policy studies and policy analysis, respectively.

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The context The big boom in the development of public administration and public policy programmes in Israel in the last two decades followed the early 1990s recommendations of the Kubersky and the Government Commissions to provide the knowledge base necessary for a knowledgeable public service. The high level of interaction of Israeli scholars with the North American academia, and the influence of the new trends in public policy studies, namely policy research, policy and programme evaluation and policy analysis, allowed the Israeli institutions of higher education in Israel to jump aboard and establish a variety of programmes ranging in their interpretation of policy studies and policy analysis as a domains of study. The profile of the Israeli graduate programmes In discussing the profile of graduate programmes of the seven institutions of higher education included in this study, we relate to the three questions that prodded our study: do the graduate programmes extend (a) service to the public service; b) knowledge about public policy processes; and (c) knowledge and practice of policy analysis within the policy processes? The findings obtained draw on three types of programmes in the Israeli higher education: • Programmes of Public Policy per se with policy analysis taught as a standalone domain of expertise at various degrees of intensity, and with ranging practical exposure in policy analysis (Hebrew University, Sapir College, Tel Aviv University); • Programmes which follow a liberal arts multiple foci orientation, whether in political science, public administration, public management or business with some courses about public policy with degrees of exposure of policy analytic practices (Ben Gurion and Haifa Universities); • Units or courses of study within larger Schools of Political Science or Governance with an explicit liberal arts orientation (Bar Ilan University and IDC) with some public policy courses. Despite their significant differences, all programmes expose their students to aspects of public policy studies through at least one to two courses about public policy usually in conjunction with another topic, that is, at Haifa University: Scopes and Methods in Public Administration and Policy (first year), and Political Economics and Public Policy Making; at Ben Gurion University: Public Policy, Planning, and Monitoring in the Public Sector, Research in Public Administration, Economics for Public Administration; at Bar Ilan University: Theories and Approaches in Public Administration, Political Leadership, and Israeli Politics.

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Contribution to the public service, public policy, policy analysis The findings obtained in the study supporting this chapter point to significant differences and similarities among the seven institutions both in their vision and in their vision attainment. Service to public service Most programmes show partnerships with government, local and/or central agencies, as well as with NGOs. Haifa and Ben-Gurion Universities do so through the ATIDIM programme in municipal governance as well as through its Cadets programmes with the Ministry of Interior; the Hebrew University partners with the Government Commission: Tel Aviv University is a recommended course of study by the Ministry of Interior. The Executives, Cadets and Specialisation courses of study involve an experienced student population, which requires specific guidance and coaching to reinforce existing know-how for growth in the public service profession. Though in some institutions the number of experienced, tenure track faculty is low, they are reinforced by a considerable number of adjuncts who bring to the programmes both public service experience, and public domain academic knowledge. Notably, as also indicated by the 2011 External Report of the Council for Higher Education, only few of these programmes, and their specific courses of studies, offer practical implementation in the profession. All institutions have similarly high student entrance requirements indicating a high expectations level and attention to the quality of the future public servants and analysts. In all programmes, the length of the course of studies is similar (four semesters) with the exception of IDC (three semesters) and Haifa University with a fourth year in the research programme. The core courses and electives follow each institution’s individual vision. Albeit at various degrees of emphasis on policy analysis, all programmes provide the basic knowledge foundations for the public service. Only some programmes (Hebrew University, Tel Aviv University and Sapir College) can be said to produce actual policy analysts as conceived by Bardach, Meltsner, or Wildavsky and as called for in a fundamentally professional domain. Public policy instruction In all institutions there is an overriding policy component dedicated to policy studies, and policy processes, although as schools of public administration/public affairs/public management universally, they have a multi-functional rather than a public policy focus. Their public policy focus involves providing knowledge about the policy process in a liberal arts approach, inclusive of some features of policy analysis as is the case at Haifa and Ben Gurion Universities. In other 189

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words, these programmes provide tools to critically and comparatively analyse public policy processes. These programmes deem policy studies analogous with policy analysis notwithstanding their differences and the latter’s specific practice oriented approach.12 In all programmes, and due to the requirements of the academia, faculty are committed to disseminating public administration and public policy research in journals and other publications. Some do so in co-production with their students. Policy analysis reports or policy papers are still not acknowledged by the Israeli higher education as equivalent to scholarly investigation, and therefore the ‘practice’ orientation is not predominant. Policy analysis We have identified that all seven graduate programmes provide courses about policy processes. Nevertheless, while some exposure is given, not all of them train in doing policy analysis, that is, as a standalone professional and academic domain with specific frames of reference, conceptual and methodological practices. This orientation is an explicit prerogative in the Schools of Public Policy: Hebrew University, Tel Aviv University and Sapir College. To revisit the question of whether the Schools of Public Policy in Israel endow students with the embodied skills, through practice, that Majone, Meltsner and Wildavsky, respectively, advocate, so that they can ‘speak truth to power’ – we note that only the Hebrew University and Sapir College follow the Berkeley– Harvard model of practical immersion over the entire four semesters. They offer two specific Policy Analysis courses and workshops, inclusive of assignments, policy papers, real life policy analyses at degrees of difficulty and timeliness, and Integrative Capstones inclusive of presentations to real clients. Tel Aviv University does not have a specific course titled Policy Analysis, but includes assignments inclusive of policy analysis components mainly in their Introduction to Public Policy; Introduction to Public Law and Ethics; the Social and Political Aspects of Public Policy. In the three institutions, as normative in Schools of Public Policy internationally, law and economics (with an emphasis on micro and macroeconomics and cost–benefit analysis) are deemed foundations to policy analysis.

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In summary 1 Have the Israeli programmes met their individual targets and developed a valueadding approach to the education of public policy and administration in Israel endowing students with competencies required to have the public domain entrusted to them? This question follows a 1998 quote attributed to Derek Bok, Harvard president at a time of the big boom of the development of public policy programmes in the US, and which brings to light the primary rationale that public policy programmes should address: ‘What kind of people do we want to entrust with official power over our lives?’ Given the major developments in the public service and in public service education in Israel in the last two decades, the answer is generally positive. The courses of study offered by the programmes are consistent with their respective goals, and the domains they seek to advance. While not all follow normative public policy or public administration programme templates, they extend informative courses of study that vary in accordance with their institutional leadership background and perception of the field of public service. The large number of graduates annually (over 1,000 graduates) holds the promise of a more knowledgeable and reliable public service. Across the border and regardless of their specific orientation, all programmes of Public Policy and Public Administration in Israel perceive their role both as providers of foundations in public policy, and as facilitators of public service education including Executives, Cadets, and Specialisation streams in their research and non-research courses of study.13 2 Is public policy instruction offered in graduate institutions of higher education in Israel? and, 3 Is policy analysis instruction offered in graduate institutions of higher education in Israel? The answers to these questions are intricate because while policy studies exposure takes place in all programmes and the curriculum offers knowledge about common concepts and exiting approaches, policy analysis instruction challenges are not fully met at the instructional level. In making this statement we refer to the raison d’être of the public service which is to produce reliable and systematic policy action. Knowledgeable skilful action can be only achieved through practice. This is the main call and purpose of policy analysis. In medicine, psychology, law or architecture one cannot engage in diagnosing and offering treatment, or designing and planning a building, only by knowing about the profession without prior training and mastery of the minutest skills in the profession. Knowing anatomy 191

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is not enough in order to diagnose and treat a patient. Policy making is as acute, costly and affects the public’s life on a large scale (Geva-May, 2005). Hence the motivation to provide know-how not only about public policy processes but also the know ‘how to do it’: how to diagnose and treat real public policy problems applying a valid methodology, well trained skills, and under real time and real client constraints. The External International Committee appointed by the Israeli Higher Education Council in 2011 emphasised in its report the relative lack of ‘profession’ perception as opposed to the liberal arts orientation adopted by most of the graduate public policy/administration programmes. Their view was that such graduate programmes at MA level should see themselves as professional programmes reinforcing practical skills rather than learning, liberal arts style, about the public service. Despite its identification with western higher education standards, none of the Israeli programmes adheres yet to the NASPAA Accreditation Standards now including over 280 Schools in the US and internationally; nor is it part of the accreditation efforts14 in Western and Eastern Europe through EGPA’s accreditation system or Canada’s CAPPA for the Canadian Schools – which adherence can facilitate a more cohesive perspective and quality control. While decidedly much has been achieved within a very short period of time in the Israeli higher education in support of the public service – the instruction of policy studies in general and policy analysis in particular are, as in any developing field, a work in progress. Notes 1

2

3 4

5 6 7 8 9 10 11 12

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NASPAA is the National Association of Schools of Public Affairs and Administration, it accredits over 280 programmes in the US and recently also internationally. Each School has to adhere to set Standards for Accreditation and is reviewed every 5 years. The home page is: http://naspaa.org/accreditation/NS/INDEX.asp. Navigating among the pages should answer most questions about the process. The counterpart of NASPAA in Europe, established in the last decade is EGPA’s EEAPA, and in Canada CAPPA’s accreditation committee – in an attempt to ascertain that baseline skills and competencies are offered and maintained In both cases the design was led by David Dery, a former Berkeley trained scholar. See the website of the Council for Higher Education for a list of MAs provided by colleges in Israel http://che.org.il http://politics.biu.ac.il/ http://in.bgu.ac.il/fom/PublicDep/Pages/PublicDepHomePage.aspx http://hevra.haifa.ac.il/~poli/index.php/he/# http://public-policy.huji.ac.il/ http://socsci.tau.ac.il/public/ http://portal.idc.ac.il/he/schools/government/homepage/pages/homepage.aspx www.sapir.ac.il/MApublicadmin For a clear description of the differences see Weimer and Vining, 2010, Chapter 2.

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14

Note that unlike countries with much larger populations, Israel’s 8 million inhabitants are granted higher education by a total of seven research universities: Hebrew University, Tel Aviv University, Haifa University, Ben-Gurion University, Bar-Ilan University, Technion and Weizmann Institute. The Technion, Israel Institute of Technology and Weizmann Institute, which are both science and/or technology oriented, do not feature public policy programmes. In recent years, a myriad of colleges offering postsecondary education, as well as the Open University, provide mainly undergraduate degrees. NASPAA’s Standards and Accreditation is now applied to international Schools, with Bocconi University being the first to be accredited outside of the US (2013).

References Bardach, E, 2000, 2008, 2011, A practical guide for policy analysis: The eightfold path to more effective problem solving, Washington, DC: CQ press Boardman, A, Geenberg, D, Vining, A, Weimer, D, 2006, 2010, Cost benefit analysis: Concepts and practice, Pearson Series, Englewood Cliffs, NJ: Prentice Hall Colebatch, HK, 2002, Policy, 2nd edn, Buckingham: Open University Press Cook, PJ, Vaupel, JW, 1985, What policy analysts do: Three research styles, Journal of Policy Analysis and Management, 4, 3, 427–28 Council for Higher Education, 2011, The Committee of the Evaluation of Public Policy and Administration Study Programmes: Executive report, Jerusalem: Council for Higher Education DeLeon, P, 1999, The stages approach to the policy process: What has it done? Where is it going?, Theories of the Policy Process 1, 19–32 Denhardt, RB, 2001, The big questions of public administration education, Public Administration Review 61, 5, 526–34 Dery, D, 1986, Knowledge and organizations, Review of Policy Research 6, 1, 14–25 Dror, Y, 1968, Public policy reexamined, Scranton, PA: Chandler Dror, Y, 1972a, Institutional growth of policy sciences, PSJ Policy Studies Journal 1, 2, 56–61 Dror, Y, 1972b, Symposium on basic facilities and institutions in policy studies, Carbondale, IL: Policy Studies Organization, http://catalog.hathitrust.org/api/ volumes/oclc/706048364.html Dror, Y, 1972c, The challenge of policy sciences, PSJ Policy Studies Journal 1, 1, 4–5 Dror, Y, 1983, Public policy making reexamined, Dunn, WN: Transaction Publishers Dunn, WN, 1994, Public policy analysis: An introduction, Englewood Cliffs, NJ: Prentice Hall Durning, D, Osuna, W, 1994, Policy analysts’ roles and value orientations: An empirical investigation using Q methodology, Journal of Policy Analysis and Management 13, 4, 629–57 Elwood, JW, 2008, Challenges to public policy and public management education, Journal of Policy Analysis and Management 27, 1, 172–87 Fischer, F, Forester, J (eds), 1993,  The argumentative turn in policy analysis and planning, London: UCL Press 193

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Geva-May, I, 2005, Thinking like a policy analyst: Policy analysis as a clinical profession, Basingstoke: Palgrave Macmillan Geva-May, I, 2011, Foreword from the Editor-in-Chief, Journal of Comparative Policy Analysis: Research and Practice 13, 1, 1–3 Geva-May, I, Kfir, A, 2000, Developments in public policy analysis and evaluation in Israel, Public Administration 78, 2, 409–22 Geva-May, I, Maslove, A, 2006, Canadian public policy analysis and public policy programs: A comparative perspective, Journal of Public Affairs Education, 12, 4, 413–38 Geva-May, I, Maslove, A, 2007, In between trends: Developments of public policy analysis and policy analysis instruction in Canada, the United States, and the European Union, Policy analysis in Canada: The state of the art, Toronto: University of Toronto Press, 186–215 Geva-May, I with Wildavksy, A, 1997, 2002, 2011, An operational approach to policy analysis: The craft. Prescriptions for better analysis, Boston, MA: Kluwer Academic Publishers Geva-May, I, Nasi, G, Turrini, A, Scott, C, 2008, MPP programs emerging around the world, Journal of Policy Analysis and Management 27, 1, 187–204 Hajnal, G, 2003, Diversity and convergence: A quantitative analysis of European public administration education programs, Journal of Public Affairs Education, 9, 4, 245–58 Hannan, MT, Freeman, J, 1984, Structural inertia and organizational change, American Sociological Review, 49, 2, 149–64 Howlett, M, Ramesh, M, 2005, Studying public policy: Policy cycles and policy subsystems, Toronto: Oxford University Press Ingram, H, Schneider, AL, 1997,  Policy design for democracy, Lawrence, KS: University Press of Kansas Jenkins-Smith, HC, 1982, Professional roles for policy analysts: A critical assessment, Journal of Policy Analysis and Management 2, 1, 88–100 Jenkins-Smith, HC, 2006, APPAM survey, APPAM Spring Conference, Charting the Next Twenty Years of Public Policy and Management Education, June 15–17, Park City, Utah Jennings, B, 1987, Policy analysis: Science, advocacy or counsel, Research in Public Policy Analysis and Management 4, 121–34 John, P, 2013, Nudge, nudge, think, and think: Experimenting with ways to change civic behaviour, rev paperback edn, London: Bloomsbury Academic Kingdon, JW, 1995, Agenda, alternatives and public policies, 2nd edn, Glenview, IL: Scott, Foresman Kubersky, H, 1989, Report of the Committee for review of the Civil Service and Government funded Bodies, Jerusalem: Government Printer [in Hebrew] Lindblom, CE, 1958, Policy analysis, American Economic Review 48, 3, 298–312 Luger, M, 2005, Balancing pedagogy, Thinking like a policy analyst: Policy analysis as a clinical profession, New York: Palgrave Macmillan

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MacRae, D, Wilde, JA, 1979, Policy analysis for public decisions, North Scituate, MA: Duxbury, reprinted by University Press of America Majone, G, 1989, Evidence, argument, and persuasion in the policy process, New Haven, CT: Yale University Press May, PJ, 1989, Hints for crafting alternative policies, Policy Analysis 7, 2, 227–44 Mayer, IS, van Daalen, CE, Bots, PW, 2004, Perspectives on policy analyses: A framework for understanding and design, International Journal of Technology, Policy and Management 4, 2, 169–91 Meltsner, AJ, 1972, Political feasibility and policy analysis, Public Administration Review, 32, 6, 859–67 Meltsner, AJ, 1976, Policy analysts in the bureaucracy, Berkeley, CA: University of California Press Patton, CV, Sawicki, DS, 1993, Basic methods of policy analysis and planning, www.unc.edu/courses/2009spring/nurs/596/960/module3/patton2.pdf, Englewood Cliffs, NJ: Prentice Hall Pressman, JL, Wildavsky, AB, 1973, 2010,  Implementation,  Berkeley, CA: University of California Press Pressman, JL, Wildavsky, A, 1973, 1984, 2010, Implementation: How great expectations in Washington are dashed in Oakland,  Berkeley, CA: University of California Press Radin, BA, 2000, Beyond Machiavelli: Policy analysis comes of age, Washington, DC: Georgetown University Press Radin, BA, 2013, Beyond Machiavelli: Policy analysis reaches midlife, Washington, DC: Georgetown University Press Scott, C, Baehler, K, 2010, Adding value to policy analysis, Sydney: University of NSW Press Sharef, Z, 1962, Three days: An account of the last days of the British mandate and the birth of Israel, London: W.H. Allen Smith, D, 2005, Practice, practice, practice: The clinical education of policy analysts at the NYU/ Wagner School, in I Geva-May, Thinking like a policy analyst: Policy analysis as a clinical profession, Basingstoke: Palgrave Macmillan Torgerson, D, 1986, Between knowledge and politics: Three faces of policy analysis, Policy Sciences 19, 1, 33–59 Weber, M, 1968, Economy and society: An outline of interpretive sociology, New York: Bedminster Press Weimer, DL, 2005, Institutionalizing neutrally competent policy analysis: Resources for promoting objectivity and balance in consolidating democracies, Policy Studies Journal 33, 2, 131–46 Weimer, DL, Vining, AR, 1989, 1992, 2005, 2010, Policy analysis: Concepts and practice, Englewood Cliffs, NJ: Prentice Hall Weimer, DL, Vining, AR, 1990, Government supply and government production failure: A framework based on contestability, Journal of Public Policy 10, 1, 1–22

195

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Weimer, DL, Vining, AR, 2005, The P-case: One strategy for creating the policy analysis ‘case’, in I Geva-May, Thinking like a policy analyst: Policy analysis as a clinical profession, Basingstoke: Palgrave Macmillan Weimer, DL, Vining, AR, 2009, Investing in the disadvantaged: Assessing the benefits and costs of social policies, Washington, DC: Georgetown University Press Weimer, DL, Vining, A, 2010, An assessment of important issues concerning the application of benefit–cost analysis to social policy, Journal of Benefit–Cost Analysis 1, 1, 1–40 Wildavsky, AB, 1977, Principles for a graduate school of public policy, Journal of Urban Analysis 4, 1, 3–28 Wildavsky, AB, 1979, Speaking truth to power, Piscataway, NJ: Transaction Publishers Wildavsky, AB, 1984, The nursing father: Moses as a political leader, Tuscaloosa, AL: University of Alabama Press

196

Index

Index Reference to tables and figures are in italics

A academia, and policy analysis education see graduate programmes academic policy analysis 9–10 Accountant General 56–7, 66 active coping 30 ad hoc advisory expert panels community living committee 114–15, 116–18 and expertise 110–11 role of 110–11 sub-minimum wage committee 111–14, 115–18 use of committees in public policy 109–10 Adelman, J. xi advisory panels see ad hoc advisory expert panels advocacy groups 12, 156, 157, 164 Aizencang Kane, P. 158 Alon, G. 98 Alternative Poverty Report 167 Amalgamation Commission 75 amalgamation reform (2003) 74–5, 82 Amos (prophet) 23, 24, 25 annual performance plans 63 Arab-Jewish organisations 12 Arabs in Budget Department 127 and policy analysis 12 voting patterns of 29 Aridor Committee 163 Aristotle xxii Arrangements Law 41, 73, 125–6, 130, 131, 133–4 Avrami, S. 97, 98

B Bank of Israel Research Department and ex-post evaluation 145–6 and financial stability 146–7 and Governor’s role 47, 141–2, 144, 147–50 institutional and legal framework of the Bank 141–2 and macroprudential analysis 146–7 and monetary policy 144–6 purpose of policy analysis 142 staff of 142–3 work programme of 143–4

Bar Ilan University 176, 178–9, 188 Bar, M. 157, 163 barriers to policy analysis utilisation xviii–xxii Ben-Bassat, A. 125 Ben-Gurion University of the Negev 160, 175, 179–80, 188, 189 Ben-Porat, Miriam 24–5, 26 Bensimhon-Peleg, S. 159 Bok, Derek 191 Boris, E. 156 Boston, J. 47 Brender, A. 149 Brudnick, I.A. 96, 105, 106 Budget Department, Ministry of Finance 8–9, 56–7 aims of 127 and approval of transfers 66 centrality of 125–6 and GPM 65 and in-house policy analysis 129–32, 136, 137 and policy analysis 123–32 and Prime Minister’s Office 59 staffing of 127 and standard model of policy analysis 128–36 three modes of policy analysis 126 and uncertainty 138 budgets 125–6 and in-house policy analysis 129–32, 136, 137 Burg, A. 94–5, 106 Business Tendency Survey 145

C capacity building 64–5, 66 Cartwright, T.J. 110 Casey, J. 156 Central Bureau of Statistics (CBS) 160–1 central government challenges facing 65–8 cultural change within 65 and incentives 65–7 and integration 65 and lack of policy capacity 56–7 and local government 73–8, 81–2 policy units within 59, 59–65, 67–8 and Prime Minister’s Office 59–68

197

Policy analysis in Israel reform of methods 62–5 structural reforms 55–60, 58, 59 structure within 59–60, 59 see also civil service; RIC; and see also individual Ministries CHE (Council for Higher Education) 64, 67 child allowances 130–2 Child, C. 156 civil service contraction of 40–3 development of 39–40 functions of 38, 60 organisations of 39, 39 and privatization 43–8 reform suggestions 49–50 see also central government; local government Civil Service Commission 57 civil society organisations see third sector coalition politics xxi–xxii, 28–9 Cohen, Amnon 104–5 Cohen, H. 45–6 community living policies 114–15, 116–18 Companies Survey 145 comparative perspective xviii Composite State-of-the-Economy Index 145 Congressional Research Service (US) 96, 97, 99, 105–6 consultocracy 46 coping 29–32 cost-benefit analysis 4, 149 craft aspects of policy analysis 173 Crazy States xxiii

Plan for the Recovery of the Israeli Economy 74–5 stability of 11, 41 see also Bank of Israel; Ministry of Finance education in policy analysis see graduate programmes Elwood, J.W. 172 Equilibrium Exchange Rate 145 Estonia 47 European Centre of Parliamentary Research and Documentation 100 European Union, and committees 109, 111 ex-post evaluation, Bank of Israel 145–6 expert panels see ad hoc advisory expert panels External International Committee 192 external policy analysis see outsider policy analysis

D

Gal, J. 157 Galnoor Committee 159–60, 163–4 gas and oil industry 135–6 German reparations xiii Gidron, B. 160, 163 Goldberg, Elieazer 24, 26 Governance Committee 137 Government Delivers (software) 64 Government Planning Manual (GPM) 63, 65 Government Procurement Administration 64 Governor of Bank of Israel 47, 141–2, 144, 147–50 graduate programmes administrative aspects of 177, 178–9, 179–80, 181, 182, 183–4, 185, 186–7, 189 and central government 67–8 choice of institutions 176 choice of variables 177–8 contribution to public service of 189 data collection 176–7 evolution of xiv, xv, 174–6, 188 importance of 67–8 and international normative concepts and practices 171–4

Dahan, M. 125 database, third sector 161–2 demographic transformation of Israel xxi Denhardt, R.B. 174 Dinur, Raanan 7, 57 disability policy and community living 114–15, 116–18 and sub-minimum wage committee 111–14, 115–18 Dror,Y. xxii, xxiv Dryzek, J.S. 85 Dynamic Stochastic General Equilibrium model 145

E Earned Income Tax Credit 149–50 econometric models 144–5, 148 economic and social policy xvii economy and local government 74–5 nature of 27–8, 41 new economic plan 41

198

F fanaticism xxiii Federmann School of Public Policy (Hebrew University) 175, 182–3, 188, 189, 190 Fefferman, Beni 7, 112, 113 Figura,Y. 110 financial stability 146–7 First Boston Bank 46 Floersheimer Institute for Policy Studies 79 frames 81–4 Friedberg, H. 102 fuzzy gambling xxiii–xxiv

G

Index nature of the programmes 177–8, 179, 180, 181–2, 182–3, 184–5, 186, 187, 189–90 overall assessment of 191–2 and policy analysis 190, 191–2 and public policy instruction 189–90, 191–2 study findings 178–87 vision of 177, 178, 179, 180–1, 182, 183, 185, 186 grand-policy professionalism xviii, xxii, xxiii, xxiv, xxv greenhouse gas emissions, reduction of 132–4 Grønbjerg, K.A. 156 GuideStar 162

H Ha’aretz 23, 25 Hadassah Medical Center xii Haifa University 175, 180–2, 188, 189 Hajer, M. 85 Halffman, W. 110 Hanin, D. 101 Harvard’s Kennedy School 172 Hashiloni-Dolev,Y. 111 Hazan,Y.R. 102 Hebrew Prophets 23–4, 25, 28 Hebrew University of Jerusalem 175, 182–3, 188, 189, 190 Hendriks, C.M. 85 Higher Education Graduate Programmes see graduate programmes Hird, J.A. 94 Histadrut 3, 6, 41 Hood, C. 46 Hopkins Project 160–1 Hoppe, R. 110 house prices 148

International Supreme Auditing standards 77 Irgunim Bareshet project 162, 165 Israel and coalition politics xxi–xxii, 28–9 as contentious society 21–2 coping strategy 29–32 cultural roots of 23–4 and demographic transformation xxi distinctive traits of 33 economy of 27–8 and fuzzy gambling xxiii–xxiv historical development of xi–xii, xix, xx history of policy analysis in xiii–xvii instability of 11–12 and international law 22, 23 as late developer 1–12 nature of the state xix–xx, xxii problematic status of 23 and statecraft culture xxii and use of policy analysis xxii–xxiii and value cleavages xx–xxi Israeli Centre for Third Sector Research (ICTR) 160–3, 165, 166 Israeli Defense Forces (IDF) xiv Israeli Third Sector Database 161–2 Itzik, Dalya 99

J Jackson, M. 46 JDC-Israel 162, 164 Jerusalem Centre for Public Affairs 79 Jewish Agency 41, 162 Jewish People Policy Institute (JPPI) xvi Johns Hopkins Comparative Nonprofit Sector Project 160–1 Joint-Israel 80

I

K

ICTR 160–3, 165, 166 IDF xiv immigration 11, 40 in-house policy analysis 2, 8 Ministry of Finance 126, 129–32, 136 RIC 93–107 see also outsider policy analysis incentives 65–7 insider analysis see in-house policy analysis; outsider policy analysis institutionalised networks 165–6 Interdisciplinary Centre (IDC), Herzliya 185–6, 188, 189 interest groups 157 interministerial committees 132–4, 136, 137, 163 international consulting firms 45–6, 47 International Experts’ Panel on CommunityBased Residences for Persons with ID 114–15, 116–18

Kennedy School, Harvard 172 Knesset Research and Information Centre see RIC knowledge, and decision-making 93–4, 98, 106 Kubersky Report 3–4, 56, 64, 68, 137, 175

L Landau, D. 103–4 Lapid,Yair 130 Latet 167 Legal Advice Unit 56–7 legislature and policy analysis see RIC Levi-Abekasis, Orli 106 Limor, N. 165 Lindblom, C.E. 172 Lindenstrauss, Micha 24, 25, 26 lobbyists 95 local government

199

Policy analysis in Israel amalgamation reform (2003) 74–5 and autonomy 76–7 and frames 81–4 inequality within 72 municipal system 72 Municipalities Bill 76–7 policy analysis at the border 77–8, 82–3 policy analysis from outside 79–80 policy analysis of 73–80, 81–2, 83 policy analysis within 80–1, 83–4 reforms 71, 73–7 and relationship with central government 71, 72–8, 81–2 role of 71, 72 and short-termism 80–1, 83–4 and State Auditor 77–8 Strategic Planning Units 80–1 and think tanks 79–80, 83 urban water reform 73–4

M macroprudential analysis 146–7 Madison, James 93 Majone, G. 172, 173 March, J.G. 9 Master Privatisation Plan 46 McGann, J.G. 97, 98 McNamara, R.S. xviii Meltsner, A.J. 172 methodological policy analysis models 172–3 Meyers, H.E. 98, 158–9 Ministry of Economy (formerly Ministry of Industry, Trade and Labor) 4, 62, 112–14, 116 Ministry of Education 10 Ministry of Finance Arrangements Law 41, 73, 125–6, 130, 131, 133–4 Budget Department staff 127 and budget negotiations 63 centrality of in policy analysis 8, 125–6 and child allowance cuts 130–2 and in-house policy analysis 129–32, 136 and interministerial committees 132–4, 136, 137 and local government 73, 81 modes of policy analysis 126, 136–8 and new PMO structure 59 policy analysis within 123–38 and privatisation of prisons 44 and public committees 126, 135–6, 137 reform suggestions 49 regulatory role of 66 and standard model of policy analysis 128–38 and university public policy school xiv Ministry of Industry, Trade and Labor see Ministry of Economy Ministry of Interior 73, 75, 76, 78

200

Ministry of Justice 162 Ministry of Transportation 5–6 Ministry of Welfare and Social Services 9, 62, 114, 116, 117, 163 Mintrom, M. 2, 6, 8, 11, 60 monetary policy 144–6 moral integrity, and State Comptroller 24, 25, 26, 27, 82 Mosher-Williams, R. 156 Mosley, J.E 156 municipal system of local government 72 Municipalities Bill 76–7

N NASPAA Accreditation Standards 173, 187, 192 National Economic Council 7, 59–60 National Insurance Institute 131 National Policy Institute xiv National Security Council xiv, 59–60 National Security Staff xiv–xv networks, third sector 164–6 New Public Management 82–3 Nirel, R. 157 Nonprofit Registrar 162 normative principles of policy analysis 172 Nowcasting 145

O oil and gas industry 135–6 Olmert, Ehud 26, 57 Olsen, J.P. 9 Orlev, Z. 102–3 Oron, H. 106 outcome gap 60, 68 outcome monitoring 58, 60, 62, 63, 64, 65, 67, 68 output measurements 62, 63, 64, 65, 68 outsider policy analysis 2, 5, 6–8, 45–6, 47, 64–5, 132–3 see also third sector

P Parliament Research and Information Centre see RIC parliamentary oversight 102 passive coping 30 Peck, J. 81 performance management 65 performance plans 63 philanthropic foundations 157, 159, 164, 165, 166 Phillips, S.D. 156, 165 Plan for the Recovery of the Israeli Economy 74–5 policy analysis (theory/concept of) analysing Israeli 3–12

Index barriers to utilisation of in Israel xviii–xxii constraints of 21–2 and coping 29–32 craft aspects of 173 definition of 2, 21, 38, 60, 81 methodological models 172–3 normative principles of 172 political model of 106 stages model 173 standard model of 128 tactical method 106 policy analysis studies see graduate programmes policy councils 59–60 policy units (in central government) 59, 59–65, 67–8 political model of policy analysis 106 Pollitt, Ch 82 positivist analysis 2, 4, 5, 8, 10 post-positivist analysis 5, 6 Prime Minister’s Office 57–68 prisons, privatisation of 44–5 privatisation 41, 42, 43–8 Programme for Children at Risk 62, 65 Prophets (Hebrew) 23–4, 25, 28 protests 43, 84–5 public, and policy-making 10, 43, 84–5, 103–4 public committees ad hoc advisory expert panels 109–18 and Bank of Israel 142 and the Ministry of Finance 126, 135–6 and policy analysis in Ministry of Finance 126, 135–6, 137 and third sector 163–4 public expenditure 41

Q Quartet, the 56–7, 66

R Radin, B.A. 5 RAND Corporation xvi, 46 Raudla, R. 47 religion xx, xxi, 12, 23–4, 25 Research and Information Center see RIC Research Department, Bank of Israel 142–51 Review Committee of Government Policy towards Third Sector 159–60, 163–4 Rhodes, R.A.W. 165 RIC (Knesset Research and Information Center) aims of 102–4 and impact of the reports on Bills 104–5 importance of 97–8, 105–7 manpower of 99–100 products and outcomes 104 role and origins of 94–8, 99

structure of 99 trustworthiness of 97 value of to Knesset 105–7 working procedure of 100–1 see also central government; civil service Rivlin, R. 95, 102, 103, 107 Robinson, W.H. 93

S Salamon, L.M. 156 Sapir College 175, 186–7, 188, 189, 190 Schmid, H. 157 Schwartz, R. 156–7 security issues xiv–xv, xx, xxiii Shahal, Moshe 26 Shalev, C. 111 Shamir,Yitzhak 26 Shani Committee 132–4 Sheatufim 164 Sheshinski Committee 135–6 Sikkui 12 SMW (sub-minimum wage committee) 111–14, 115–18 social policy xvii socio-economic strategy, and privatisation 45–7 stages model 173 standard model of policy analysis 128–36 State Auditor see State Comptroller state budget, and policy analysis 129–32, 136, 137 State Comptroller 22, 24–7, 77–8, 82–3 state contraction 40–3 state-in-the-making xix, 40 statecraft culture xxii statehood tradition, lack of xix–xx strategic assessments 63 Strategic Planning Units 80–1 Strawczynski, M. 149 Strengthen the North plan 61 sub-minimum wage committee 111–14, 115–18 Supreme Court 44–5

T tactical method of policy analysis 106 taxation 124, 129, 131, 148 Earned Income Tax Credit 149–50 and gas and oil industry 135–6 teaching of public policy see graduate programmes Tel Aviv University 175, 183–5, 188, 189, 190 think tanks xvi, 79–80, 83, 97–8, 158–9 third sector advocacy groups 12, 156, 157, 164 database of 161–2 Galnoor Committee 163–4 Hopkins Project 160–1

201

Policy analysis in Israel and inside-outside balance 164–7 interest groups 157 and networks 164–6 philanthropic foundations 157, 159, 164, 165, 166 public policy towards 159–64 Review Committee of Government Policy towards Third Sector 159–60, 163–4 role of 6, 42–3, 155–60, 166–7 and supply side dynamics 165–6 think tanks xvi, 79–80, 83, 97–8, 158–9 and trust 165 types of 157–8 Tibi, A. 97, 106 Tirosh, R. 97, 101 Trajtenberg Committee 43, 126 Tunik,Yitzhak 25, 26 Turner,Yacov 26

U ultra-Orthodox parties 28, 31, 32, 130 United Kingdom, policy analysis 57 United States and advisory committees 110–11 CRS 96, 97, 99, 105–6 as external consultants 46 and graduate programmes 172 and policy analysis xviii, 5, 57 and privatisation of prisons 45 universities see graduate programmes urban water reform 73–4

202

V Vigoda-Gadot, E. 45–6 Vining, A. 171

W Water and Sewage Corporation Commission 74 water reforms 73–4 Weimer, D. 171 Weiss, C. 10–11, 94 Wildavsky, A. 172 Williams, C. 2, 6, 8, 11, 60

Y Yad Hanadiv Foundation 161, 162 Yehezkel, O. 103 Yesh Atid 130 Yishay,Y. 157–8

Z Zegart, A.B. 111 Zionism xi–xii, xix, xx, 166 Zrahia, Z. 98 Zychlinsky, E. 157

Vol 7

Israel is considered a developed country yet both its security issues and frequently changing demographic makeup set it apart and imply that its policy analysts must operate in a unique environment and grapple with exceptional challenges. This volume, part of the successful International Library of Policy Analysis series, brings together for the first time a comprehensive study of policy analysis in Israel. A foreword by Yehezkel Dror discusses Israel’s paradoxical history of policy analysis, and is followed by discussion of the different aspects of its policy analysis by leading figures from both the Israeli public and academic spheres. While Israeli policy analysis is in some respects unique, Israel also represents a broad category of states that could be considered as policy analysis ‘late developers’. Hence, while Israeli policy analysis is fascinating in and of itself, its study also holds important lessons for other countries.

INTERNATIONAL LIBRARY OF POLICY ANALYSIS IRIS GEVA-MAY & MICHAEL HOWLETT

“The community of scholars in Israel working on policy analysis have made numerous contributions to the field, especially in understanding how to make policy in conditions of risk. This volume provides an interesting and insightful analysis of those contributions.” Professor B. Guy Peters, University of Pittsburgh (USA), and President, International Public Policy Association

INTERNATIONAL LIBRARY OF POLICY ANALYSIS SERIES EDITORS: IRIS GEVA-MAY & MICHAEL HOWLETT

Features of the ILPA series

Recent volumes published and forthcoming • Policy analysis in Australia, edited by Brian Head and Kate Crowley (2015) • Policy analysis in Japan, edited by Yukio Adachi, Sukehiro Hosono and Jun Iio (2015) • Policy analysis in Taiwan, edited by Yu-Ying Kuo (2015) • Policy analysis inthe Czech Republic, edited by Arnošt Veselý, Martin Nekola and Eva M. Hejzlarová (2016) GILA MENAHEM is an associate professor with a joint appointment in the departments of public policy and sociology & anthropology at Tel Aviv University. Her areas of expertise are policy paradigms and policy networks, water policy and higher education policy. AMOS ZEHAVI is a senior lecturer with a joint appointment in the departments of political science and public policy at Tel Aviv University. His areas of expertise are comparative public policy and welfare state development.

POLICY ANALYSIS IN ISRAEL Edited by Gila Menahem and Amos Zehavi

• a systematic study of policy analysis systems by government and non-governmental actors • a history of the country’s policy analysis, empirical case studies and a comparative overview • a key reference for research and teaching in comparative policy analysis and policy studies

POLICY ANALYSIS IN

Israel

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