Metropolitanization, Globalization and Governance – New Regionalism, Old Regionalism or No Regionalism in Israel

1. Metropolitanization, Globalization and Governance – New Regionalism, Old Regionalism or No Regionalism in Israel Eran Razin Department of Geography, The Hebrew University of Jerusalem IMO – Montreal, April 24-25 2006

2. The Argument • An assumed link: metropolitanization processes in an era of globalization and pressures on the welfare state lead to ‘new regionalism’ forms of governance. • New regionalism – complex horizontal networks, partnerships, ad-hoc coalitions and modes of cooperation in a competitive economy. • ‘Old regionalism’ – a focus on reforming formal hierarchical administrative-territorial structures. • No regionalism • Public choice – competition within a fragmented pattern. • Centralization – prominence of upper levels of government diminish the significance of debates over local and metropolitan governance.

3. However…. • A move ‘from government to governance’ – partnerships, cooperation, networks – does not imply a diminishing role of the central state and of territorial hierarchical structures, but rather a more pluralist mode of decision making – changing “rules of the game”. • The central state practically backs-off from fulfilling some of its responsibilities, but does not cede its legal powers. • Seemingly ‘new regionalism’ attributes of governance can in fact serve as tools of central control, in an environment of a neo-liberal move towards privatization associated with centralization.

4. New regionalism evolved in Israel only to a limited extent, ‘old regionalism-type’ reforms hardly ever took-off. Thus, the main direction of change has apparently been from a centralized version of ‘no regionalism’ to a slightly more decentralized version of ‘no regionalism’ with some components that can be regarded as new regionalism.

5. The Global Context • The crisis of the welfare state • Pressures on the welfare state: globalization, etc. • Political-ideological responses. • Implications on local/metropolitan governance • Urban entrepreneurialism, privatization, NPM. • A move from ‘old regionalism’ to ‘new regionalism’. • Reservations on the assumed shift from government to governance • Major territorial reforms. • Critique on the neglect of the central state in the urban regime, urban entrepreneurialism and new regionalism literature. • Crisis conditions: a window of opportunity to impose reforms.

6. The rise of the post-welfare state can lead metropolitan governance in diverse paths • Decentralized horizontal networks. • Centralized imposed/encouraged from above networks of governance. • Erosion of the welfare state and the crisis of (local) democracy • Declining turnout, fragmentation, limited participation in civil society. • Possible influences of new regionalism: lower accountability? From majority decisions to deliberative democracy? Metropolitan implications

8. The Israeli Context • Cycles of growth and recession. • The rise of urban entrepreneurialism, 1980s-1990s. • The Israeli type of decentralization: • The emergence of the courts as a major arena for societal conflicts. • The act of the state as several stakeholders. • Recession and crisis of the early 2000s serves also as a window of opportunity to impose changes on the local government system.

9. Higher Education: Diminishing or Changing Role of Central InterventionGillad Rosen and Eran Razin • Regulation and support a monopoly of the central government through the Council of Higher Education. • Early 1990s – the system opens for the establishment of new colleges; local authorities compete of their location, despite being formally excluded from the system. • Growing municipal entrepreneurialism does not indicate diminishing central state regulation but changing nature of central intervention: • Greater pluralism and exposure to external pressures from both private and and public sectors. • Politicization: growing intervention of politicians of the central state. Erosion of power of bureaucrats/professionals at the Council of Higher Education? • A problem of over-investment and unwillingness of local authorities to cooperate, except occasionally in weak peripheral regions.

10. Joint Planning Commissions: Coordination, Cost Savings or Central ControlMichal Dachoach-Halevi and Eran Razin • An institutional framework established in the 1950s: cooperation imposed from above, intended to achieve coordination and economies of scale. • Prevailing cooperation in practice: “don’t meddle in my affairs and I will not interfere in yours”. • Economies of scale – likely only when very small local authorities are involved. • Tool of control: • An effective tool for intervening in local planning decisions (particularly of Arab local authorities) in the past. • At present, mainly provides opportunities for centrally imposed appointments.

11. Joint Industrial Areas and Tax Base Sharing: A Local Initiative Transformed and Utilized by the Central StateEran Razin and Anna Hazan • Emerged on the agenda as a result of the growing share of self-generated revenues in local government finance in the late 1980s, and of the substantial cuts in central government transfers in the early 2000s. • Non-residential local property tax (Arnona) – a major source for fiscal disparities. • The breakthrough in 1992 – an outcome of local initiative of two mayors. • Supportive attitude of the Ministry of Interior. The Ministry of Industry and Trade provides support in priority zones after 1997, as a tool to rationalize investment in infrastructure and to market land in industrial parks.

12. 2000 – An amendment to the Local Government Law enables the Ministry of Interior to approve agreements for sharing local taxes and levies on non-residential land uses. • Early 2000s – Attempts of the Ministry of Interior to impose revenue distribution face substantial difficulties. • 2003-2006 – Support of the Ministry of Industry and Trade ceases due to lack of funds. Public incentives provided to encourage cooperation between Arab and Jewish local authorities. • 2004 – A Ministry of Interior appointed commission examines the option to redistribute a portion of non-residential property tax. A negative recommendation also because of mistrust in the Ministry of Finance. • Mid 2000s – Mechanism adopted by the national Planning Administration. Land use plans can require inter-municipal cooperation and revenue distribution as preconditions for approval of industrial and commercial uses.

13. 2005-2006 – Proposed amendment to the law enables the Ministers of Interior and Finance to impose revenue redistribution among adjacent (but not necessarily bordering) local authorities. • In sum, a ‘new regionalism’ local initiative, at first gains the support of the central state, then adopted by the central state to impose policies in line with its own agenda: sustainable planning? distributive justice? Budget cuts? • The desirable limits to central control: ‘gentle imposition’ subject to clear checks, attempt to retain an image of a fair broker; or bitter conflicts, decisions motivated mainly by a desire to solve short-term budgetary problems of the central state.