Policy Impressions From Israel

I have not posted her in some time, primarily due to a two-week trip to Israel.  It was fascinating, and while it’s still pretty fresh in mind I thought I’d jot down some of the interesting things I observed from an economics and policy perspective (ignoring the conflict for now).

  • Housing is extremely expensive.  As basically any Israeli will tell you within five seconds of asking about politics, housing in Israel represents a large and growing burden on economic activity.  Many young people live at home, and bitter divisions over housing policy have been a main issue in politics the last few years.  Theories about causes are myriad – but are used by different parties to support increasing government activism, increasing liberalization, or increasing settlement in the West Bank.
  • Tel Aviv is visibly struggling with growth.  The traffic is horrific, and the public transit is pretty unimpressive.  Tel Aviv has no subway or light rail, and got on board with the idea only very recently, and construction is underway.  Terrible transit and expensive housing combine to make Israel’s biggest and most dynamic metropolis impractical for many who might otherwise move.
  • (West) Jerusalem seems to be doing better with it. Unintuitive, but most of Jerusalem is just as new as Tel Aviv.  The city was quite small until the 1940s.  However, the traffic issues aren’t nearly as bad despite the similar vintage of the city – perhaps the smaller confines of the city encouraged more walkable development.  I suspect the heavy Orthodox population also played a role, as the observant cannot use cars one day a week.  Can’t speak to East Jerusalem, as we did not venture there – I suspect public transit isn’t the highest-priority issue there.
  • Water is a surprisingly non-political issue.  Water for farmers is heavily subsidized, for a variety of mainly nationalistic reasons.  However, it consumes half the country’s water and contributes 2% to GDP.  This is unsustainable and ultimately will not be sustained, since people need the water much more than plants.  While this has vacillated in importance, currently it’s not a hugely salient political issue – many Israelis have very high hopes for desalination technology which will massively improve Israel’s water situation.  Compared to all the signs I saw driving on the 5 from LA to SF, the level of water-politics vitriol within Israel seems pretty low.*
  • Universal conscription totally changes life scheduling.  Everyone in Israel enlists in the Army from 18 to 21.  After that, one or more years of work is common before going to college.  What Americans think of as a “real career” starting at 22 may not begin until 30 for Israelis.  While Army service is credited with making Israelis more emotionally mature (it seems to), most of the Americans with us were 5 to 6 years ahead of Israeli peers in adult life.  Perhaps this later start and leveling experience helps contribute to lower inequality in Israel.
  • Massive immigration can create very nasty politics.  Israel has immigration issues like the US wouldn’t believe.  Many huge surges of immigration, primarily the immigration of 1.2M Russians in the 1990s, transformed the country.  The backlash of many Israelis to immigrants have made politics there increasingly ugly, and many Israelis are racist to a degree that would make American jaws drop.

Many of the small-to-medium-scale public responsibilities in Israel seem to work fairly well, even while Israeli politics in the large view is increasingly fractious and struggling to function.

*: Things are much more fraught when it comes to Israel and its neighbors, natch.

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