The decline of Jerusalem

The most significant transfer of power in Israeli history is unfolding. Political institutions and elite are being overshadowed by mayors, philanthropists, business leaders, nonprofits and civil servants. This transformation allows us to become a healthier society of closely networked communities.

Olmert's downfall is just the most recent milestone of a process that has been going on for thirty years.

During the first twenty five years of its existence, Israeli society and economy was mostly centralized, state-owned and controlled. There was one powerful party, MAPAI, and an all-powerful government that ran the country in a top-down fashion. As late as the early eighties, the government controlled more than eighty percent (80%) of the economy, provided all public services and controlled most media outlets.

Crisis of leadership or trust?

Is Israel suffering a crisis of leadership? For many, the long list of politicians and public servants under investigation gives a clear positive answer. I argue that our current crisis is not a crisis of leadership; it's a crisis of trust between the general public and the elected officials chosen to exercise authority. The distinction is essential for designing the remedy.

Ronald Heifetz of Harvard University defines authority as conferred power to perform a service. Authority rests on the contract between the authority figure and his or her constituents. It is given and can be taken away.

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Israel's economic problem is politics

Last week, the Jerusalem Post reported on Yechezkel Dror's comments about the problems of the parliamentary system. And while I don't necessarily agree with the solution he suggests, his prognosis is spot on. Without strengthening the capacity to govern, Israel will not be able to carry out an economic leapfrog, something essential to achieve Reut's Top 15 Vision.

Israel's macroeconomic policy has received many compliments from the International Monetary Fund and foreign governments. In recent years, Israel has experienced low deficit and inflation as well as decreased unemployment and national debt. Yet despite this, Israel's problem remains in the weakness of its government system.

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