Work Plan 2002-3

Policy Work

ICSEP has prepared a comprehensive “One Hundred Day” economic reform plan for every prime minister elected since Benjamin Netanyahu. These plans – detailing concrete steps to cut government, deregulate and de-monopolize; and to reform the tax system, financial markets and the labor market – are periodically updated and resubmitted for fresh consideration by decision-makers.

The plans – initially put together by David Boaz (for years Chief of the Treasury’s Budget Department) and by Pinchas Landau (former author of The Economist’s intelligence report on the Israeli economy) – were based on the work of numerous commissions dealing with economic reform and on consultation with over seventy top economic experts and players. They are still considered by the policy community as “The Bible” of economic reform. Some of their suggestions have already been implemented. Much, however, remains to be done.

ICSEP’s policy work is facilitated by the sterling reputation of its economic research, seminars, conferences and publications, and by the very good working relationship its director has fashioned with many key people in the economic policy arena, from the governor of the Bank of Israel to directors past and present of the Treasury to various ministers and key members of Knesset. The Director’s wide activity in the media both as publicist and as source also significantly contributes to our work.

We have also maintained a small program of Knesset interns who serve as economic advisors to key Knesset members (several of them developed promising careers, such as Paz Barnett, who became the liaison for governmental and Knesset affairs first to Minister of Justice Meir Sheetrit and now to Minister Tommy Lapid). They have been helpful in spreading our policy papers among decision makers.

Necessarily, much of the work undertaken in this sphere is discreet. Nor can one clearly take credit for important reform initiatives since there are various factors involved in them at various times. Perhaps it is enough to mention that out of six steps for reform in financial markets we have recommended last year, four have since been implemented in full or in part and the two remaining are in the process of implementation.

Strategically, we have to continue putting effort into encouraging various players and the system as a whole to undertake further reform. Our tactics must remain, however, opportunistic. We must be able to rapidly take advantage of changing circumstances, like we did when the government formed a commission on tax reform, and we were able to submit to it a detailed and reasoned brief that was reflected in its recommendations.

It is hard to define precise goals and deadlines for such activities (the preparation and disseminations of reform proposals, numerous conversations with various parties in an effort to facilitate coalitions that will support such reforms, extensive public relations work with the media and others etc.). A comprehensive pro-reform campaign that will strive to create widespread public support could cost at least one million dollars (it cost five millions dollars to push for the passage of the law for direct election of a prime minister – and an additional five to have it rescinded).

Economic Education for the Elites, Especially University Students

It is very hard to generate and sustain economic reforms in Israel, not only because there are very powerful vested interests that hugely benefit from the existing system and ferociously defend it, but also because they are not opposed by vigorous public opinion led by enlightened elites. Our universities are dominated by neo-Marxists and the ethos they propagate is against a market economy.

In order to enrich the intellectual climate we are engaged in the following activities:

1.The launching of a new web site dedicated to the war of ideas

This website will provide a sorely-lacking spectrum of pro-market writings which are now excluded from public debate in Israel by a monolithic leftist media.

For the first time Israelis will have access in Hebrew to a mode of thinking that has had such great influence in America and England. Our website – Kivunim (Directions) – will provide them with Hebrew versions (translated by a specially-trained group of translators and editors) of the best topical materials relevant to the Israeli experience that are published in such periodicals as Commentary, The Public Interest, The City Journal, The Weekly Standard, etc.

The website will be interactive and will host top Israeli thinkers and writers of all stripes in order to create a rich and vibrant pluralistic discussion now so absent from the Israeli media.

2.The extension of our university seminars on “The Free Market and Its Critics”

These seminars are constructed around Milton Friedman’s “Free to Choose”. In each of its ten three-hour sessions we tackle one of the book’s chapters, thus giving the student a comprehensive review of market thinking and its concrete applications to Israeli reality. The students are required to read and summarize each chapter in advance. They then watch the relevant film segment, which is followed by an in-depth two hour discussion.

These seminars, now in their third year, have been an enormous success. The four seminars per semester at three universities (Hebrew University, Tel Aviv University and the Herzliya Interdisciplinary Center) that were run in the last academic year can accommodate up to 100 students. We are currently holding over 400 applicants on our waiting lists. We are negotiating their extension to other universities and colleges as well. We have also been asked to run more seminars in the universities where we already now teach.

In order to meet this growing demand, we need not only additional resources but must also identify more candidates to lead such seminars and train them, not an easy task considering the anti-market attitudes Israeli universities inculcate in most graduates. Nonetheless, we already have one additional instructor, Eran Bartal, and we continue to seek other candidates.

3.Economic seminars for high school students

By the time they arrive at the university, Israeli students are already exposed through their media and peer groups to strident anti-market propaganda. It is important, therefore, to try and reach them before their views have been fixated, and provide them with the opportunity to study basic economics without bias.

As faculty testimonials verify, the courses we are now holding for the third year in six different high-schools in greater Tel Aviv (mostly in the more disadvantaged areas) have enjoyed great success, and we are constantly asked for more such courses both by students and school principals both in the schools where we teach and in other schools and locations. We also get requests from a variety of different population groups, among them Druse women, Orthodox Jews and Arabs.

Institutional Structure

ICSEP employs four Project Directors in addition to its Director and his wife, plus ten other assisting personnel. We do not engage employees full-time because Israeli labor market strictures make this a very costly proposition and we had rather pay a higher fee for part-time employment which also grants us greater flexibility.

The Director, Daniel Doron, frames the policy and work plan of the Center after consultation with the Board of Advisors and the Project Directors. He also oversees its implementation.

Doron is also in charge of policy advocacy, relations with various bodies and institutions and fundraising.

His wife Susan Doron assists with all foreign-related work, with media work and with fundraising.

Ben Zion Levy is the Director in charge of our website Kivunim.

Iri Rikin is Chief Editor of the website and of ICSEP’s publications.

Eran Bartal directs student outreach activities, and will be supplementing Daniel Doron in teaching university seminars.

Guy Seigel is in charge of organizing university seminars, assisted by Dror Friedman and Adi Schwartz.

We also employ secretarial staff, editors, translators plus a high school teaching staff of four.

Funding Needs

High school economic education program		$125,000
University seminars		$165,000
“Kivunim” website		$250,000
Policy work and administration		$150,000
Annual Total		$690,000

How did we do? See our 2003 Year-End Report.