Ungovernable?

By NETTY C. GROSS
Extract from Issue 16, November 24, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. 'Shas's demands highlight why this country is ungovernable' Tel Aviv University economist Dr. Dan Ben-David bemoans the electoral system that encourages governments to mortgage ideals and give in to outrageous party demands In late October, the Kadima party leader Foreign Minister Tzipi Livni announced that she had been unable to form a government - a task she was charged with in the wake of the resignation of scandal-plagued Prime Minister Ehud Olmert. Instead, the country will have a general election on February 10. Livni's efforts to stitch together a coalition were foiled by the third largest party in the Knesset, the ultra-Orthodox Sephardi Shas, which demanded a full restoration of child allowance payments and a guarantee that the status of Jerusalem not be raised in any peace talks. Shas leader Eli Yishai has argued that the cutbacks, engineered by then-finance minister Benjamin Netanyahu, had plunged many large families with multiple dependents into poverty. Dr. Dan Ben-David, a macro-economist specializing in economic growth, international trade and public policy, has also served as an adviser to the World Bank. He was invited by former prime minister and Kadima founder Ariel Sharon to join the party slate in 2006, but subsequently bowed out of politics. In addition to his duties at TAU, he heads the Taub Center for Social Policy, a Jerusalem-based think tank. He spoke to The Report about the social impact of child allowances and about the broader need to change the electoral system to make it more resistant to the demands of specific parties. The Jerusalem Report: What's wrong with Shas demands to restore child allowances? Dan Ben-David: Theoretically child allowances were supposed to provide only supplemental income to the family, but they have evolved into a substitute for work. Since the allowances increased with the number of children, people were having many children. It made more sense to stay home and have children rather than work. Encouraging people to have more children can be done without increasing child allowances. For example, the government can give tax deductions from earned income for extra dependents. We have to help the poor but not induce people to poverty by paying them to have more kids. So Shas is hurting its electorate? Correct. Its demands are not good for its poor, ultra-Orthodox constituents in the long run, because they kill the incentive to work. Furthermore, ultra-Orthodox education is limited (since it does not include basic subjects such as mathematics and English) so their children's chances on the job market will be weak, perpetuating the problem. Once the Sephardi working class gave its children top educations and many rose to the top. With Shas's emphasis on large families and schooling that does not fall under the supervision of the Ministry of Education, it's a different reality. Extract from Issue 16, November 24, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.