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Conference May 29th "Free Markets and Social Progress in Israel:
Reflections on the Past, Directions for the Future"
Maiersdorf Faculty Club, Hebrew University, Mount Scopus
For More Details and Registration
JIMS-CSJE Inaugural Lecture by Nobel Laureate Robert Aumann
Virtual Library
The CSJE virtual library contains a
large collection of studies touching upon Judaism and Economics. This bibliography is the first resource of its kind in the world.
Visit the Library
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| Latest News |
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Israel Ranks 83 in the world in terms of economic freedom, according to the Economic Freedom of the World Annual Report.
Since 2005 Israel's ranking has fallen 35 spots. Last year, Israel ranked 81.
The report puts recent middle class protests over the cost of living in context. The level of economic freedom in Israel is in decline.
The rise in the cost of living is directly linked with lack of economic freedom and competitiveness.
One of the demands made by Israel’s protesters is to adopt the Nordic welfare state model. But comparing the Israeli economy to the Nordic
economies shows that Israel has a long way to go in liberalizing its economy if it wants to be like them.
Such liberalization would include reforms to increase the efficiency of the legal system, reduce bureaucracy and allow a competitive banking sector
Read the Press Coverage
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The average price of honey in the United States is 28% of the average price in Israel. Honey is also twice as expensive as it is in England,
while Canada, Mexico, Argentina and China offer honey for export at 15% the price of Israeli honey.
Forty percent of the annual consumption of honey in Israel takes place at holiday time this month, mainly on the Jewish New Year.
Israelis will consume 1,500 tons of honey in one month, valued at NIS 60 million. An average Israeli will eat 300 grams of honey.
The paper shows that the reasons for the high cost of honey are the same as the reasons dairy products and cheeses are expensive -
government policy and over-centralization of the industry.
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The government is responsible for the high price of automobiles in Israel because it reneged on a promise to lower the purchase tax on cars to 72% -
which would still be unusually high by world standards. Double taxation and high tariffs on privately imported cars and parts
have raised prices for the whole industry and also discourage proper care of cars. The government has encouraged and continues to support a “leasing”
system that discounts its own fleets but forces private consumers who do not lease to pay exorbitant prices.
As a result, Israelis must save over a year’s worth of salaries to purchase an average car and Israel has one of the lowest rates of
car ownership in the world: 325 per 1000 residents compared to an average of approximately 500 in the EU.
Read the Press Coverage
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The problems in the housing and dairy markets are a result of a failure of government
policy, and not of market failures. This paper examines several sectors that recently
made headlines and finds that politicians and others tend to blame the market in order
to cover for their own failures.
In the housing market, for example, JIMS found that Israel is ranked 121st in the
world in the ease of obtaining construction permits, and 147th in registering property,
according to World Bank rankings. These processes take up to four times longer in
Israel than the OECD average. According to JIMS, the government taxes the real
estate market so heavily that real estate taxes add up to 9.4% of all taxes collected,
compared to an average of 5.4% in OECD countries.
Read the Press Coverage
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The government’s own budget and recent Knesset legislation are much to blame for the recent cottage cheese crisis in Israel. The rising price of cottage cheese
was the source of a consumer boycott, which in turn has led to a reduction in prices as well as
an ongoing public debate about market centralization in Israel.
The price paid by consumers for cottage cheese has risen ten times as fast as the price dairy producers have had to pay farmers for the milk they use.
JIMS recommends that the government work to expand imports of dairy products in order to increase competition in the market.
In addition, state encouragement of an agricultural cartel within the framework of the antitrust law should end,
and tax benefits that currently assist only selected large companies within the framework of the Law for the Encouragement of
Capital Investment should be apply generally, thus benefiting all of Israel’s small businesses such as small dairies and groceries.
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The recent succession of public sector strikes and labor disputes (of which teachers, university workers, foreign ministry personnel, lawyers,
social workers, railway and port employees form only a partial list) causes severe damage to the Israeli economy, whether one agrees with workers'
demands or not. In 2010, the economy lost some 168,000 working days due to strikes, nearly 70 percent of them in the public sector.
This paper reveals that 43% of the public believes labor unions are too powerful, against only 20.5% who believe they are not
powerful enough. It is therefore worthwhile to consider alternative ways to address public sector labor disputes. In particular,
this paper deals with mandatory arbitration of public sector labor disputes.
Read the Press Coverage
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The High Cost of Israeli Honey
Download the English PR
Israel Ranks 83 of 141 Countries in Economic Freedom
Read the English Summary
Israel Likely to See Protests over Auto Prices
Download the English Summary
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