Four Notes on the State Budget

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Four behavioral insights on the recent State budget and how it informs on Israeli society and politics.

Photo by Yonatan Sindel/Flash90

There is no question that the new State budget and its implications for the Israeli public should be subjected to economic and political analysis, but there are also several behavioral insights that are worthy of attention.

First Note

First, the lack of separation between the executive and legislative branches has recently come to the fore in the context of the coalition’s imposition of voting discipline on its members of Knesset, thus impinging on the legislative branch’s ability to exercise oversight of the executive branch.

But in the context of the budget, alignment between these two branches doubles the risk. That is-the chance that the Government’s main focus in its design of the current budget was on appeasing the coalition in the Knesset. It is commonly accepted that members of Knesset are there to represent their electorate, while the Government has a commitment to represent the entire public. This is why we pay taxes to the government and not to the Knesset, are drafted to the military which is run by the government and not the Knesset and are educated under the aegis of a government ministry. Of course, the focus on coalition funds is hardly non-partisan, but the fact that it is so intertwined with the state budget paints the entire budget as political and undermines its legitimacy. I believe that there are only a few people who are familiar with the size of the entire budget, but today, only few people do not know how much is being allocated to coalition funds.

It is important to understand that the public’s reaction is a function of its expectations. We expect the government to behave differently from the Knesset, and thus it is the blurring between the two which arouses the negative public sentiment toward the current State budget.

Second Note

The second point relates to the misconception that as soon as the principle of coalition funds exists, any criticism of it (whether about the size of the funds or their purpose) is hypocritical. Sometimes, the principle is more important than the price paid, but the price has a strong impact on the public’s judgement of certain actions.

Third Note

The third note relates to what is popularly referred to as ”tribal politics.” What this means is that in order to be elected, it is not necessary to please the public as a whole; but merely to please just over half the public. While this tactic may be effective in election campaigns, its impact on public trust cannot be ignored, as the public (and rightly so) expects the State budget to serve everyone. Issues such as increasing the number of doctors and building new hospitals in Israel enjoy a broad consensus and would help increase the budget’s legitimacy in the eyes of the entire public. This legitimacy is of enormous significance.

Comparative studies reveal a connection between legitimacy and payment of taxes, , social solidarity, respect for the rule of law, and more. The government must have such legitimacy in order to govern effectively, and so - should invest efforts in passing a budget that is viewed in a positive light by as large a share of the public as possible.

Fourth Note

Finally, it is easier to destroy trust than to build it. Trust relations in society are complex, and the Israeli public is required to entrust the government with its economic and physical future, and with the future of its children. In the current climate, pursuing actions that garner significant public attention but are perceived as being motivated by sectorial interests deals a severe blow to public trust. The erosion of the government’s legitimacy may take many years to repair, during which time the government will have to prove that it is guided by broad considerations for the general good. Unfortunately, the more polarized Israeli society becomes, the less incentive the government has to try to repair the damage.