Developing Long-Term Socioeconomic Strategy in Israel Institutions, Processes, and Supporting Information

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Developing Long-Term Socioeconomic Strategy in Israel Institutions, Processes, and Supporting Information Developing Long-Term Socioeconomic Strategy in Israel Institutions, Processes, and Supporting Information Howard J. Shatz, Steven W. Popper, Sami Friedrich, Shmuel Abramzon, Anat Brodsky, Roni Harel, Ofir Cohen C O R P O R A T I O N For more information on this publication, visit www.rand.org/t/rr275 Library of Congress Cataloging-in-Publication Data ISBN: 978-0-8330-8705-8 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2016 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions.html. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface Many of Israel’s socioeconomic achievements have been dramatic. A young country that has absorbed massive influxes of immigrants and responded to constant security threats, Israel successfully developed a vibrant, open, and technologically advanced economy characterized by high rates of economic growth. These strengths were well manifested during the recent global downturn, in which Israel’s economy outper- formed that of almost all other developed countries. However, Israel faces substantial economic and social challenges, some of which are well known to policymakers and recently fueled a wave of social unrest. These challenges include differential ability within the population to participate in and benefit from the growth in the economy, rising costs of living, and questions on the part of the public about the government’s ability to address those challenges. Faced with major existential challenges throughout Israel’s history, the government has not routinely developed strategic responses to prob- lems that demand longer-term, coordinated policy action. In 2011, the RAND Corporation, a global policy research insti- tution, was asked to assist a select task force of leading government officials in developing means by which Israel could create a long-term socioeconomic strategy. The task force was appointed by the Prime Minister and Minister of Finance in spring 2010 and was led by the head of the National Economic Council and the Director General of the Ministry of Finance. In part, RAND was asked to consider what institutional structure might best support this capacity in light of Isra- el’s needs and taking into account international experience. As work iii iv Developing Long-Term Socioeconomic Strategy in Israel progressed, we determined that the true value of such an institutional structure and its related processes would be to enhance the Israeli gov- ernment’s capacity for applying a strategic perspective to the develop- ment of government policy. Accordingly, we focused on developing means by which Israel could develop and apply the ability to take a strategic perspective, particularly in the socioeconomic sphere. RAND teamed with Shaldor Strategy Consulting, a leading strategic consult- ing firm in Israel, to respond to this challenge. A companion report describes key methods for taking a strategic perspective and conduct- ing long-term socioeconomic strategic analysis (Popper et al., 2015). We investigated how the government of Israel applies a strate- gic perspective currently, how other countries develop and manage such a perspective in the creation of policy approaches to deal with their socioeconomic challenges, and what gaps exist in Israel’s current institutions and processes. Informed by our research, we then recom- mended an institutional and procedural design to enhance strategic analysis to inform government policies; to provide strategic early warn- ing, strategic alternatives, and strategic training and education across government changes; and to help in the creation of a specific socioeco- nomic strategy should the government desire one. These recommenda- tions formed the basis for proposals presented to the cabinet in Octo- ber 2012 and approved for implementation. The Israeli Prime Minister’s Office and the Israeli Ministry of Finance sponsored the research reported here. This report should be of interest to the Israeli public at large, government officials in Israel and elsewhere responsible for policy design, and researchers and others who have an interest in comparative governance and strategy. RAND Labor and Population and the RAND Environment, Energy, and Economic Development Program This research was undertaken jointly within RAND Labor and Popu- lation and the RAND Environment, Energy, and Economic Develop- ment Program. Preface v RAND Labor and Population has built an international reputa- tion for conducting objective, high-quality, empirical research to sup- port and improve policies and organizations around the world. Its work focuses on children and families, demographic behavior, education and training, labor markets, social welfare policy, immigration, inter- national development, financial decisionmaking, and issues related to aging and retirement with a common aim of understanding how policy and social and economic forces affect individual decisionmaking and human well-being. The RAND Environment, Energy, and Economic Development Program addresses topics relating to environmental quality and regu- lation, water and energy resources and systems, climate, natural haz- ards and disasters, and economic development, both domestically and internationally. Program research is supported by government agencies, foundations, and the private sector. This program is part of RAND Justice, Infrastructure, and Envi- ronment, a division of the RAND Corporation dedicated to improving policy and decisionmaking in a wide range of policy domains, includ- ing civil and criminal justice, infrastructure protection and homeland security, transportation and energy policy, and environmental and nat- ural resource policy. Questions or comments about this report should be sent to the project leader, Steven W. Popper ([email protected]). For more information about RAND Labor and Population, see http://www.rand. org/labor.html or contact the director at [email protected]. For more information about the Environment, Energy, and Economic Develop- ment Program, see http://www.rand.org/energy or contact the director at [email protected]. Contents Preface ............................................................................. iii Figures and Tables ............................................................... xi Summary .........................................................................xiii Acknowledgments .............................................................. xix Abbreviations .................................................................... xxi CHAPTER ONE Introduction ....................................................................... 1 CHAPTER TWO Strategy and the Strategic Perspective ........................................ 5 Defining a Strategic Perspective .................................................. 6 Defining Strategy ................................................................ 6 Defining Strategic Perspective and Its Link to Strategy ..................... 8 Strategy, Plans, Strategic Planning, Strategic Programming, and Policy .... 9 Israel and the Strategic Perspective ..............................................12 CHAPTER THREE The Strategic Perspective and Israel’s Socioeconomic Challenges ......13 Expert Interviews..................................................................14 Israel’s Recent Economic Strategy ..............................................16 Characteristics of the Israeli Government ......................................18 Interministerial Processes ..................................................... 20 Prior Institutions for Identifying Socioeconomic Challenges ............... 20 The General Cabinet .......................................................... 22 The Socioeconomic Cabinet .................................................. 22 vii viii Developing Long-Term Socioeconomic Strategy in Israel The Prime Minister’s Office .................................................. 22 The Ministry of Finance .......................................................25 Bank of Israel ................................................................... 27 Government Ministry Policy Planning Departments ..................... 28 Prior Processes for Applying a Strategic Perspective ......................... 28 Routine Processes ...............................................................29 Exceptional Processes ...........................................................31 Data, Information, and Research for Applying a Socioeconomic Strategic Perspective .........................................................33
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