This chapter aims to portray, analyse and interpret key issues of policy analysis, of local government and in local government, affecting the institutional capability for informed policy choices and responsible policy priorities and decisions.

Fundamental shifts in Israeli public policy during the last decades have been reshaping the relationship between central and local government, their responsibilities and competences. The neoliberal paradigm embraced by Israeli governments since the mid-1980s and its concomitant policies have been redefining the boundaries of government, organisational modes of action and the financial basis of public institutions – among them local authorities. An array of explicit and tacit policies have attempted to reform local government – including spatial reorganisation (amalgamation), changes in financing and service delivery modes, and more systematic regulatory controls. Policy analysis of local government refers, here, to the conceptual and factual grounds which have shaped the central government's strategy for change and informed its derivative policies. Policy analysis in local government focuses the attention on the analytical capabilities of local authorities to assist decision-making processes. For more than two decades Israel has witnessed the emergence of local government as the most active and entrepreneurial force in the public scene. A variety of independent and disjointed forces – political, institutional and economic – has been molding a new type of local government characterised by greater autonomy, public assertiveness and functional responsibilities. A de-facto institutional decentralisation has expanded the role of local government, transforming it into a multi-purpose entity handling a widespread range of critical services and activities. The need for well-informed local policies has increased proportionally.

The discussion is set in a quadrangular perspective: policy analysis in central government, policy analysis at the border of government, external policy analysis, and local policy analysis. A selective number of concrete cases and issues allows for the identification of key challenges facing policy analysis of and in Israeli local government.

Local government in Israel: a brief contextual introduction

The municipal system

Local government in Israel is a single-tier system with no regional/meso-level mediating between the central government and local authorities. It comprises 254 local authorities characterised by high heterogeneity in terms of size, geographical coverage, socio-economic level, ethnicity and organisational capabilities.