Decentralization and Concentration of Power in Local Government
The following is a summary of an article about the concentration of power, decentralization and local government, written by Oded Steklov and Yaniv Reingwertz.
In recent decades, local governments in Israel have increasingly relied on independent income to supplement their budgets in order to cope with substantially reduced government revenues, particularly follow the sharp cuts in government grants in 2003.
This change, amounting to decentralization in practice, was not accompanied by an orderly work plan, and its feasibility was not tested. Furthermore, while there was a process of decentralization in terms of budgeting, in practice, it was not clear if the relevant power was granted to local authorities. This is especially evident in light of Israel’s low standing in the world in terms of its level of decentralization. The article by Steklov and Reingwertz reviewed academic literature dealing with decentralization of powers and budgets from the central government to the local government, and tried to ascertain: the optimal level of decentralization in Israel; whether it is desirable to continue the process of decentralization; and what considerations should be taken into account when carrying out decentralization
In recent decades, local governments in Israel have increasingly relied on independent income to supplement their budgets in order to cope with substantially reduced government revenues, particularly follow the sharp cuts in government grants in 2003.
This change, amounting to decentralization in practice, was not accompanied by an orderly work plan, and its feasibility was not tested. Furthermore, while there was a process of decentralization in terms of budgeting, in practice, it was not clear if the relevant power was granted to local authorities. This is especially evident in light of Israel’s low standing in the world in terms of its level of decentralization. The article by Steklov and Reingwertz reviewed academic literature dealing with decentralization of powers and budgets from the central government to the local government, and tried to ascertain: the optimal level of decentralization in Israel; whether it is desirable to continue the process of decentralization; and what considerations should be taken into account when carrying out decentralization
This article describes a number of advantages and disadvantages of decentralization of authority, and shows that it is advisable to decentralize powers and budgets only to strong authorities, while maintaining the concentration and supervision of funding for weak authorities. They recommend that the decentralization process should be carried out while preventing unfair competition for businesses between strong and weak authorities, while continuing the budgetary support of weak municipalities. The continuation of free competition for business resources (attracting companies to the local authority's area for employment and local taxation) results, on the one hand, in undesirable inequality, and, on the other hand, in economic benefits, which are taken from the local authorities for the benefit of businesses, mainly large ones.
The article can be found in the Floersheimer Center's Review, edited by Prof. Eran Resin and Dr. Itai Beeri. It can be found here (from page 55 onwards, Hebrew)
In recent years, ADALYA has been working with the Ministries of Interior and Finance with respect to regulation of local authorities.
As part of this activity, ADALYA has conducted many research studies on municipal policies regarding the division of revenues between authorities, unification of local authorities, promoting the status of women, municipal taxation planning, human capital development and role definitions within authorities, a basket of required services and more. This research was followed by an analysis of issues relating to the economy of local government, regulations, tenders, legislation, geographical planning and more.
For more details, please contact the Head of Research & Local Government Department: Oded Steklov.
The article can be found in the Floersheimer Center's Review, edited by Prof. Eran Resin and Dr. Itai Beeri. It can be found here (from page 55 onwards, Hebrew)
In recent years, ADALYA has been working with the Ministries of Interior and Finance with respect to regulation of local authorities.
As part of this activity, ADALYA has conducted many research studies on municipal policies regarding the division of revenues between authorities, unification of local authorities, promoting the status of women, municipal taxation planning, human capital development and role definitions within authorities, a basket of required services and more. This research was followed by an analysis of issues relating to the economy of local government, regulations, tenders, legislation, geographical planning and more.
For more details, please contact the Head of Research & Local Government Department: Oded Steklov.
