The Road to Better Governance

Preserving Israel's status as a 'boutique nation' requires hard work

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The start-up nation owes it success to the democratic system of government established by its founders. Israel’s liberal democracy not only unleashes the creative talents of individual Israelis, it fosters a business environment favorable for the establishment of companies with disruptive potential on a global scale. However, Israel’s continued success should not be taken for granted. Indeed, there are a number of signs that Israeli governance may be weakening.

Bret Stephens, a deputy editor at the Wall Street Journal and a member of IDI’s International Advisory Council, refers to small but successful countries that punch above their weight on the global arena as “boutique nations.” These are minor powers that survive and prosper under difficult conditions. Typically, their recipe for success revolves around careful cultivation of a unique reputation for excellence in a niche market of global significance – think of Switzerland’s banking sector, Singapore’s commercial hub, and Israel’s hi-tech industry.

The continued success of boutique nations is not a matter of fate; they owe their success to the thoughtful application of policies specifically designed to preserve and boost a competitive edge. Thus, boutique nations, more than most, depend on good governance.

Nowhere is this truer than in the Jewish State. Israel, a tiny democracy surrounded by a sea of hostile autocracy, survives and prospers against all odds. In the most inhospitable of political environments, and bereft of most natural resources, Israel, in the space of less than a century, has managed to build a flourishing democracy that not only fields one of the strongest militaries in the world but lists more firms on NASDAQ than any other country other than the United States and China. Israel has one thing going for it: the extraordinary talent and dedication of its people. But those human resources would be worth little in a dictatorship that stifled individual enterprise or in a kleptocracy that stole the fruits of citizens’ labor. Ultimately, the start-up nation owes it success to the democratic system of government established by its founders. Israel’s liberal democracy not only unleashes the creative talents of individual Israelis, it fosters a business environment favorable for the establishment of companies with disruptive potential on a global scale.

However, Israel’s continued success should not be taken for granted. Indeed, there are a number of signs that Israeli governance may be weakening.

The World Bank defines good governance as “epitomized by predictable, open and enlightened policy making; a bureaucracy imbued with a professional ethos; an executive arm of government accountable for its actions; and a strong civil society participating in public affairs; and all behaving under the rule of law.”

Unfortunately, the image of members of Knesset is shameful. According to a November 2015 Peace Index, the Jewish public broadly agrees (80 percent) that only a small part, or none, of the members of Knesset could serve as an example for the public regarding their personal behavior. 77% agree that recent years have seen deterioration in the personal quality of the Knesset members. In the same vein, 71% disagree with the claim that most of the members of Knesset work hard and fulfill their roles as they should.

Further, there is a lack of public trust in our government. While according to the 2013 OECD report on well-being, trust in government in Israel increased from 22% to 27% between 2007 and 2011, Israel still ranks one of the lowest in the OECD. IDI’s 2015 Israeli Democracy Index found that when asked how much trust Jewish Israelis have in a list of individuals and institutions, political parties ranked the lowest: only 15.1% of Jewish respondents stated that they trust political parties “very much” or “quite a lot.” Trust in the government (37.5%) and the Knesset (33.8%) also lagged behind many of Israel’s other institutions.

One of the factors affecting public sentiment about the government and Knesset is political instability: Israelis go to the polls more frequently (an average of every 2.8 years) than almost any other OECD country; only Greece and Japan hold elections more often. Since 1990, the rate of minister turnover has more than doubled, with ministers lasting only between 1.3 and 1.9 years in office. And when it comes to the number of political parties, Israel ranks second highest, with more political parties than any other parliament except Italy.

The proliferation of parties and rapid turnover of government impairs the ability of our government to conduct strategic planning and execute effective long-term policies. When I was elected to Knesset as a junior member of the Kadima party, I was advised by more senior colleagues not to “waste my time” striving to develop quality legislation in committee meetings. Rather, they encouraged me to focus on getting media attention and exposure. In order to catch the limelight, an MK has to recommend his/her own private legislation – no matter how ill-considered or poorly thought-out – and then use that legislation as a PR weapon. Not surprisingly, Israel leads the OECD in private legislative initiatives: 12,000 such bills have flooded the Knesset’s agenda over the last decade, nearly eight times as many as the runner-up, Finland, and 14 times as many as the third-ranked country, Great Britain.

I found most Israeli politicians are busy planning for the next election instead of for the next generation of Israelis.

It would be easy to become disillusioned. Yet despite the numbers, Israel remains a vibrant democracy, its citizens exhibit some of the highest levels of satisfaction and commitment in the developed world, and its economy is booming. At IDI, we believe good ideas in the hands of competent political leadership can help Israel preserve and enhance its unique strengths as a boutique nation. Accordingly, we are dedicated to developing the necessary reforms and acting tirelessly to see them implemented.

In order to get “our house in order,” IDI recommends a series of reforms to Israel’s parliamentary system of government. Of the many political reforms developed at IDI over the last decade, I am pushing for three small but potentially significant changes in the manner of forming a government. First, after a general election, the head of the largest Knesset faction will become the prime minister automatically. Next, the coalition formed by the prime minister will no longer require confirmation by a parliamentary vote of investiture. And finally, the continued tenure of an incumbent government will no longer depend on Knesset approval of the state budget. I believe these changes will have far-reaching effects on the size of political parties and the stability of future coalitions. In particular, they will help facilitate the re-emergence of two large anchor parties at the center of our democracy, thereby promoting stability and moderation.

Our last Democracy Index devoted special attention to the critical question of corruption, which constitutes one of the biggest threats to good governance. We asked respondents to rate the level of corruption in Israel’s leadership on a scale of 1 (“very corrupt”) to 5 (“not at all corrupt”). The scores, among Arab and Jewish respondents alike, speak for themselves: the average corruption rating for the Arab respondents is 2; that is, very close to a score of 1 (“very corrupt”), while the average score among Jews is only slightly higher at 2.4, still below the midpoint (3). In other words, both Jewish and Arab citizens consider the country’s leadership to be quite, or even very, corrupt, which may explain the rather low level of trust that they place in it.

Although Israel’s comparative standing is not terrible — when compared to other OECD countries, Israel ranks 12 out of 28 — we are slipping in the ranks. Government corruption remains a serious and dangerous social ill. To combat corruption, we must do everything to promote transparency.

Transparency is one of the greatest safeguards against corruption, conflict of interest and misuse of public funds and government resources. Transparency leads to better governance.

Accordingly, we at IDI have acted to promote the adoption of Internet technologies that will render government actions and data transparent and accessible to the public. Similarly, we have called for maximum disclosure of all relevant information held by government authorities. We have also supported measures that require government authorities to respond quickly to requests for information in accordance with the Freedom of Information Act.

The civil service plays a major role in society. According to a report by the International Federation of Accountants (IFAC), “effective governance in the public sector encourages better decision making and the efficient use of resources and strengthens accountability for the stewardship of those resources.”

IDI’s Program on Civil Service Reform is working on a comprehensive set of improvements. To give one example, our researchers have found a connection between political appointments to senior civil service roles and governmental effectiveness; the more political appointments, the less effective the civil service.

The current and common phenome¬non of political appointments in Israel is a danger to the state’s ability to govern effectively and carry out long-term policies based on strategic thinking, because political appointees tend to be less qualified, serve narrow interests at the expense of the public good, and experience more frequent turnover (in line with their appointers). A strong, professional and independent civil service is the need of the hour.

Among other recommendations, we are pushing for the formation of a professional and apolitical search committee to appoint the most qualified individuals to public sector positions. This will help to create a strong and independent public sector that will provide better service, thereby improving people’s lives.

At IDI, we know that better governance will not come overnight, but that it can be achieved over time through the patient adoption of small but significant steps. As an indepen¬dent, non-partisan think-and-do-tank, we have the privilege of taking the long view, of persevering in our pursuit of a better Israel, of acting above the political fray with the interests of the public in mind. We will continue to use the research and advocacy tools at our disposal to affect policy and achieve reform.

Visitors to Israel frequently comment on its extraordinarily vibrant cultural scene. The Israeli boutique wine scene has exploded. Israel’s microbreweries have gained a reputation for their unique taste and variety. The hospitality scene is rocking with a trend of fashionable boutique hotels. And while Israel is renowned for its high-tech innovation, Israeli boutique Judaica shops remain the finest and most respected in the Jewish marketplace.
To ensure Israel shines brightly far into the future, we must walk further down the road of better governance. There will always be obstacles along the way. However, with a clear image of what we want to achieve, Israel will continue to be a beacon for Jews around the world.

Yohanan Plesner is President of the Israel Democracy Institute.

View the Jerusalem Report special section, "Israel's Democratic Challenge," featuring IDI>>