This article explores the relation between economic liberalization, regulation and welfare. It asks how the state regulates, delays or prevents service disconnection due to debt and arrears, and what this kind of policy implies regarding the use of regulation as a form of social policy. This is done through a comparative study of the electricity and water sectors in Israel after liberalization. It finds that after initial economic reform, both sectors saw a growth in regulation intended to compensate for the social effects of reform, in what may be termed the ‘regulatory welfare state’. However, this form of social protection has been residual and incoherent. The article argues that trying to separate economic reform from its social consequences is unrealistic and may lead to adverse social and economic results. Second, findings raise concerns regarding the potential of the regulatory welfare state to deliver effective and fair social policy.
Bismuth, Christine, Bernd Hansjürgens, and Ira Yaari. “Technologies, Incentives and Cost Recovery: Is There an Israeli Role Model?” In Society – Water – Technology. A Critical Appraisal of Major Water Engineering Projects (ed. Reinhard F. Hüttl et al.; Cham: Springer, 2016): 253-75.
This chapter focuses on water policy reforms and the introduction of a new water pricing policy in Israel. These reforms have to be seen in combination with measures to extend the available water sources that have been introduced in Israel in recent years. The effects of the Israeli demand and supply management policy on the use and availability of the water resources is investigated, and the potential transferability of the Israeli experiences to other countries in the region is examined. We also discuss the contribution of the water policy reforms as part of possible options and alternatives to the planned RSDS Conveyance Project.
Kan, Iddo, and Yoav Kislev. “Corporatization and Price Setting in the Urban Water Sector under Statewide Central Administration: The Israeli Experience.” In Use of Economic Instruments in Water Policy: Insights from International Experience (ed. Manuel Lago et al.; Cham: Springer, 2015): 135-46.
As in many European countries, all water sources in Israel are public property, and are centrally managed by the government. This is to facilitate correction of market failures associated with externalities, natural monopolies and equity considerations. The economic policy instrument (EPI) considered here comprises two aspects of the centralized approach: (1) an institutional reform: local services that were formerly provided by municipal water departments became the responsibility of corporations; (2) a price-scheme reform: urban water prices are set by the regulator subject to the constraint of overall cost-recovery at the national and municipal levels, combined with an egalitarian policy; the latter is realized in identical municipal end-users tariffs. We evaluate the environmental, economic and institutional aspects of these reforms, and point out two main conclusions. First, with respect to EPI implementation from the regulator perspective, the lesson learned can be summarized by the phrase “grasp all, lose all.” EPI reformation, in this case the establishment of regional corporations, should take account of unattainable objectives: “sanitizing” the political factors from involvement. The second lesson is associated with the challenge of designing a pricing mechanism that simultaneously achieves several potentially contradicting targets: costs recovery, creation of incentives for efficiency, and equality. Also here the mechanism was distorted by political pressures. According to the social norms as they are reflected by the resultant policy, equality overwhelms efficiency.