Zehavi: Inside the Economics & Politics of the Israeli Protests

My colleague Dr. Amos Zehavi offers insights on Israeli political economy, democracy, and the current protests.

Israel’s protest leaders have compared them to the Arab protests and also to protests in Greece and Spain. Both comparisons are superficial but contain a grain of truth.

First, unlike the Arab countries, we have a democracy in which people can vote their preferences. Hence, a toppling of government due to public unrest could be construed not as a democratic victory, but as quite the opposite: a victory of the rabble over the vote. Nevertheless, the similarity is to be found on how socio-economic issues are debated and made into policy in Israel. Unlike virtually all other OECD countries, socio-economic debates are not a central determinant of voting behavior in Israel: peace-security and religious-secular are far more important cleavages. Politicians are aware of this and consequently are not concerned about democratic discipline (i.e., they would incur electorate wrath) and support policy that could be in opposition to voter preferences.

In fact, this is precisely what is happening. Economic policy in Israel is well to the right of the OECD norm while public preferences on social and economic issues (based on both ISSP and WVS comparative surveys) is well to the left. The result is that there is a democratic deficit with respect to socio-economic policies. Hence, the protestors are in fact filling a democratic void in the center of the Israeli democracy.

Second, European protests occur on the backdrop of economic failure and painful austerity plans. In Israel, in contrast, the current economic situation appears bright. GDP growth in 2010 was 4.6% and unemployment is now 5.7%: its lowest rate since the early 1970s. Nevertheless, these rosy figures cover up a reality which is a bit more complex. Real wages of the median worker have stagnated since the mid-1990s; housing prices have risen precipitously since 2008 (although this could work to the benefit of home owners); and certain public services – but not all – have eroded, primarily healthcare. I have yet to see a longitudinal study that analyzes the Israeli citizen’s consumption of goods (private and public combined), but my guess would be that for people in the 3rd and 4th quintiles (5th is the top), things really didn’t improve over the last fifteen years. Given Israel’s economic growth, they are right to ask why.

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One Comment to “Zehavi: Inside the Economics & Politics of the Israeli Protests”

  1. All interesting – on question is the last sentence. Over the past 25 years of visiting family in Israel, I’ve see a growth in consumer goods and standard of living. Two cars, washing machine, etc. That continues even now.

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