Cover: Local Government Reform and the Socioeconomic Gap in Israel

Local Government Reform and the Socioeconomic Gap in Israel

Building Toward a New Future

Published Jul 2, 2020

by Amir Levi, Tal Wolfson, Steven W. Popper, Shira Efron, Anamarie A. Whitaker, Jennifer J. Li


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רפורמה בשלטון המקומי והפערים החברתיים-כלכליים בישראל: אל עבר עתיד חדש

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إصلاح الحكومة المحلية والفجوة الاجتماعية والاقتصادية في إسرائيل: البناء لأجل مستقبل جديد

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Research Questions

  1. What can be done to ameliorate shortcomings in a manner that would not require a major overhaul of the fundamental system of local government?
  2. How can a new approach to regionalism be seen as a means to address the ability of local governments to meet the needs of their residents?
  3. How can municipalities be made more-effective agents for the change that many in Israel feel must be brought into being?
  4. How can communities enhance the means for developing the human potential that would allow their children to succeed within the current structure?

The local governance level in Israel has historically been weak compared with the power of the national government. Many of the issues regarding socioeconomic development and access to opportunity in the wider economy are best addressed at this level. This report discusses three key aspects of Israeli municipalities, with a view toward strengthening the effectiveness and efficiency of local government in Israel, particularly in recruiting personnel to become more-active agents for change. First, the authors make the case for adopting a regional approach to address the fragmented nature of municipal governance and overcome some of the key obstacles confronted when dealing with the problems faced by individual small and poor municipalities. Second, they lay out a model for the hiring and placement of personnel in managerial municipal positions as a partial solution for cronyism and the dearth of skilled leadership and professional staffing that typifies many peripheral localities in Israel. Finally, the authors examine the education services that municipalities would be able to offer their residents, with an emphasis on minority communities.

This report should be of interest to those involved in urban and regional transformations, the institutions of democratic governance, and Israeli social and economic development, including those working toward greater inclusion of disadvantaged populations within Israel and more generally.

Key Findings

Large disparities exist in modern Israel

  • Systemic inequalities in Israel—combined with the demographic trends within the ultra-Orthodox Jewish and Arab communities compared with those in the rest of the population—require action at the local level.
  • The governance problems faced by modern Israel are complex and not easily accommodated by the governmental stovepipes that still exist across not only sectors of activity (e.g., health, transportation, energy, education, commerce) but also all levels of government.
  • Moving planning and implementation authority to a district level would make it possible to address the deficiencies in some of the weakest municipal units.

There is a need to strengthen human capital throughout the local authorities

  • The effectiveness and professionalism of a local authority depend to a large extent on the quality of its personnel, especially at the management level.
  • Bigger municipalities are better positioned for attracting better leadership and hiring personnel with higher levels of skills.
  • The socioeconomically weakest localities in Israel feature low levels of locally generated income, dramatically fewer industrial and commercial areas in towns with straitened finances, and distance from government agencies and business activity.

Maintaining the focus on localities brings to the fore concerns regarding Israel's great educational disparities

  • Unequal government investments and structural barriers, such as unequal access to resources (both in and out of school), exacerbate educational gaps.
  • Informal education, parent engagement, second language education, and social emotional learning are all factors that could help bridge Israel's educational disparities.


  • Advocate for a phased approach to implementing the District model with each district, in turn, going through its own structured set of discussions, workshops, and stakeholder engagements to determine the shape and scope of that district's initial and prospective powers, responsibilities, and assessment verification framework.
  • Create ten or fewer districts that would principally serve as coordinating bodies for their regions.
  • The proposed district structure could provide leadership with the opportunities to generate change that are today mostly the province of the central government.
  • A district's authority to set the rate of taxation and its distribution among the towns and inhabitants of the district would lead to a reduction in the gaps between its various locales.
  • Empower municipalities to search for ways to increase the quality of instruction or opportunities and boost educational outcomes.
  • Encourage municipalities to use data for continuous quality improvement for consideration by local governing bodies.
  • Under the proposed district structure, districts could be made responsible for the general management of all local pedagogical, physical, and administrative aspects of educational institutions within the context of Ministry of Education policy. This responsibility would offer enhanced ability to direct greater resources—budgets, professional principals, and quality teachers—to weaker schools within the district.

Research conducted by

Funding for this research and analysis was provided by a generous contribution from the Diane and Guilford Glazer Philanthropies, Y & S Nazarian Family Foundation, Rosalinde and Arthur Gilbert Foundation, and other supporters of the Israel Program within the RAND Center for Middle East Public Policy (CMEPP). The research was conducted by the RAND Center for Middle East Public Policy.

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