Welcome to EconTalk, Conversations for the Curious, part of the Library of Economics and Liberty. I'm your host, Russ Roberts, of Shalem College in Jerusalem and Stanford University's Hoover Institution. Go to econtalk.org where you can subscribe, comment on this episode, and find links to other information related to today's conversation. You'll also find our archives with every episode we've done going back to 2006. Our email address is mail at econtalk.org. We'd love to hear from you.
Today is February 12th, 2025, and my guest is Rachel Gore of Reichman University. She has served in senior positions in the Israeli government, including... Legislation Advisor to the Knesset Coalition Chairman, Senior Advisor to the Deputy Foreign Minister. Rachel was Director of Public Policy for Lobby 99. Rachel, welcome to EconTalk. Thank you very much.
Our topic is the peculiar and sometimes problematic and sometimes controversial Israeli system of government. It's a democracy, the only one in the Middle East. We have no constitution. Before October 7th, there was very controversial judicial reform that could only happen in Israel and the fight over that. And that set in motion here a conversation about what democracy is that goes beyond the borders of this country. I think there's.
Similar issues about the role of the judiciary and the power of other branches of government that's coming to the United States soon or maybe is already here in February of 2025. I thought it'd be useful to explore the fundamentals of the Israeli system. and consider some of the incentives that produces. And I think that'll give us some insights into the nature of democracy. So let's start with the basics. What kind of government do we have here? What kind of system is it?
Yes, Israel is a parliamentary democracy, which is actually the most common form of government around the world, though it is very dissimilar from the U.S. system. And perhaps it's one of the reasons that many, many American audience kind of look at it. oddly. Israel is what you call, if we use our exact term, we're a parliamentary single constituency party list proportional representation electorial system. So that's a bit of a mouthful. But basically what it means is that we have one house.
We don't have an upper legislature or lower legislature. We have one House, we have 120 MKs, and they are elected vis-a-vis party lists. And the MK is member of Knesset. Knesset's the Hebrew word for parliament, essentially a gathering. Correct. It's actually interesting why we have 120, which is it's a throwback to the Second Temple period where there was a council of elders that had 120 members.
And that's actually how we got to the number 120, which as a sign is a bit of a problem because there were not nearly as many citizens in the Second Temple period of ancient Judea as there are today in modern Israel. And one of the many frustrations with the Israeli system of government is that ironically there are actually too few MKs, too few members of Knesset or MPs. If you look at a European or other parliamentary democracy of similar...
size. We have currently about 8 million Israelis who can vote and we will have, can vote at the moment or potentially will have the vote when they come of age.
We will soon hit 10 million. And if you look at other European countries of similar size, we should have somewhere between... three 350 even up to 400 mks so although the historical uh throwback or mention is is is romantic uh and is fascinating like many things with israel and especially the israeli democracy raises the question whether that it is relevant today and whether it is an effective form of governance
So what we said was we have party list systems, which basically means that Israelis don't vote directly for anyone who represents them, at least not on the national level, on the municipal level. a bit more direct, but even then, not much. When an Israeli goes into the voting booth, they vote for the party. They don't vote for a specific individual. The head of the party's name might be on the ballot, but they're voting for the party.
And the party list is made up either by an internal vote of the party members in a primary or what's become much, much, much more common. In the last decade, the party list is simply appointed. by the head of the party. So basically what we've seen over the last 10 years is that the internal democratic mechanisms of all of the major parties
have been phased out. And if we're looking at difficulties within a democratic system, I would start from that. But that party list, so there's a, when you walk into the... into the voting booth, which I've had the privilege of doing since I moved here four years ago. Before I moved here, there was an election every few weeks. It felt like now there's been a relative period of stability.
But when you walk into the booth, there's a piece of paper you can choose with the party's name on it, and you put it into a cardboard box. It's very old school. It's very old school. It actually comes out of one of our videos, one of our famous cultural movies called Saleh Shabbat, in which he mocks the Israeli system and how easily it can be turned because it's little.
It's basically little paper ballots. It actually is little paper ballots that you step into a little paper envelope and then you put it in a big... Cardboard box. I mean, it looks more like an election in a middle school. Yeah, that's what it looks like. Modern democracy. But yeah, that is still the way we do it. So then each party gets a particular proportion of the vote.
And there's a threshold, but we'll get to that in a minute. But if you cross the threshold, you get a significant enough proportion of the votes. You get a proportion of the 120 seats. And that means that your list, they go down the list. And once they get to that number of seats, everyone above that is in the Knesset, in the parliament, and those below it are not in. And those parties that don't hit the threshold aren't in.
That list is extremely important, and I assume there's – as you point out, there's – there are not as many or rarely now primaries within parties to determine who's on the list. It's just picked. But that – list of who is picked, there must be a lot of jockeying for position because if you don't, it doesn't matter what number you are on the list once you're in, but if you're below the threshold number, you're not in.
Correct. I would say the list number is really problematic for two reasons. One is the fact that... who are appointed on a list as opposed to having, we have no geographic elections, we have no representation in that sense. Israeli MPs don't have a district. For example, if you're a British MP, okay, and you're very popular within your home district, you can oppose your own party leader, right? Because you have your own independent base of power and you have a specific demographic.
a specific group of people to whom you are answerable. In Israel, unfortunately, for MPs, that's not the case. You can't say I am. There is a little bit of geographic orientation, as in the sense that in some of the major parties, they have slots that are saved for immigrants.
immigrants, women, someone who represents the South, the North, kind of the central district. But those are voluntary positions. And once you've been elected, you can't be reelected to that, you know, as the representative of the North.
So obviously there's very little incentive for you to actually, in fact, be their representative. So that's the first problem with the party list is that in the end, you're not answerable to anyone and you have very limited independence. And that is indeed the second.
problem. When people talk about the lack of balance of power between the executive and the legislature in Israel, generally what they're talking about is the fact that the legislature appoints the government, right? We have 120 MKs of which about approximately 30 to 40 become the government, the cabinet, the ministers, okay, while still simultaneously serving. As members of the Knesset, that's changed a little bit in the past decade with what's called the Norwegian law, but not significantly.
And that's often the reason that Israel is criticized for a lack of clear balance or clear checks and balances between the legislature and the executive, because essentially the legislature appoints the executive. But I think that that's a misnomer because that is more or less the way all parliamentary democracies work to a greater or lesser extent. So while that may be an oddity to the American eye or to the French eye, that is not the issue.
greater issue is that, in essence, the executive appoints the legislature in Israel. Because who's in the executive? Those are the heads of the parties who are making up the party lists, who are the one and only person who will decide if you, junior MP, make it into the next Knesset or not. So how are you supposed to check? your boss basically when you're in the legislature and they're in the executive
And that creates a problem. So we have a legislature who appoints an executive, an executive appoints a legislature, and this incestuous loop often loops out the public. And therein lies the issue. You said therein. They're not accountable. Well, they're not accountable in the traditional way we think of with a geographic representation to voters, but they are accountable, weirdly or maybe positively, to the...
And, you know, it's interesting because in America, it felt for a long time that there was some diversity within the party because of that geographical quote. You know, representation. But American parties have become much more party line akin to what we're talking about in Israel. You know, the Republicans have maybe two centrists left. slightly left-leaning members in the Senate, in Collins and Murkowski. But in general...
The Republican Party votes as a bloc. Similarly, the Democratic Party, which used to have conservative members in the days of old, like Henry Jackson, say, or others, they're generally. can't get elected within the Democratic Party or for whatever reason. And now the Democrats generally vote as a bloc. There are exceptions. There are people right on the edge. And when there are close issues, those differences matter.
But it's interesting that in America, it has become de facto more of a party system than I think it used to be. But here in Israel, it's a party system. And you are only really accountable to the leader of your party. And if you stand up to that person, you risk being left off. You're going to be left off the list the next time. So what that tends to lead to in Israel is a puller.
a proliferation of parties. When people break with the prime minister, they go and form, often form their own party. A hundred percent. I mean, in fact, if you look at the Israeli political system today, the majority of the mid-sized parties, like Bennett, presumably, who will return to politics, or Lieberman, or Guido Ansar, or just, you know, to some extent, Benny Gantz, right, the people... are running the major parties are all people who have had a personal
falling out with Benjamin Netanyahu. As a result, they have formed their own party, starting with Israel Beteno. You know, Liberman's Israel Beteno was the first. But this has become a trend in which we have... You know, with the exception of the Arab parties and in the traditional, you know, center-center-left parties like Labour and Meretz, the majority of the Israeli political system is consistent of Netanyahu and those Netanyahu used to employ.
has isolated or fallen out with over the years. So it's a personal political system. Yeah, that too. But it's worth pointing out that In the early days of Israel, for decades, the left-leaning party labor ran the country, meaning the prime minister was always a labor person. And that changes. As the country in the aftermath of the 1973 war and the failures, the country starts to move a little bit to the right. And in recent years.
The country has moved very much to the right. So the jockeying for position is often within the right. So the proliferation of parties that are important. are divisions within the right of center parties. And I should just mention one more thing, and you can comment on it. Left and right here in Israel, very different from left and right in, say, America.
The overwhelming issue for the last 20 or 30 years is security, how we relate to our Palestinian neighbors and our neighbors in other countries. who are often either hostile or at least at best lukewarm in their relationship with Israel. And so it's not the standard.
social issues and economic issues, they're sometimes relevant. They're also sometimes reversed. You know, as some people have pointed out to me when I got here, the Tel Aviv high-tech community... is much more pro-capitalist than the right wing subsidized the ultra-Orthodox parties, which are...
interested in a big welfare state. And that's a flip. It's actually a fair amount of pluralism, even within the ultra-Orthodox parties, which is interesting. There are parts that lean left, let's say, economically. There are parts... that lean, let's say, right economically. There are parts that lean left, for example, Ariadne. you know, a leader of the Shass party, you know, a phenomenon within the world of Haredi politics, who's, you know, he's been a kingmaker for almost 30 years now.
personally identified politically in the terms of security, questions of security and foreign affairs, as a left-winger. While the Haredi public as a whole, especially the younger generation, has kind of slid right in their own opinions when it comes to questions of security. Carrie D being the ultra-Orthodox parties here that get subsidized by the state. There aren't many of them of the ultra-Orthodox around.
essentially on welfare. They don't serve, they're not required to serve in the army, and that is an incredibly contentious issue here right now in the middle of this war. There's a lot of jockeying and threats. It's incredibly contentious. I would note, though, that a great deal of the Shah's voters, those, you know, the Haredi world, like any other world, has an enormous amount of real and vivid internal politics.
And those who are represented within the Shah's party, many, many, many of them do serve. not, you know, comparable to the rates of the general public or the religious Zionist public, but many do serve as opposed, for example, to UJT or what they call the Ashkenazi, the kind of... The other half of the Haredi world, which serves in much, much, much lower numbers. So even within the Haredi world, there is a spectrum.
Finishing up the sort of basics part, we've got an executive, the prime minister. We have a parliament, one body that has no geographical representation. And we have a judicial branch. Maybe we'll get to the issues of the relation between the judicial and the legislative branch. And as I said, I think earlier, there's no constitution. So that complicates things. There's an informal constitution. Right. There's an informal.
They were sort of maybe recognized, you know, starting in the mid-90s retroactively as a kind of a pre-constitution or pre-constitution or having constitutional status. You know, it depends who you ask and what time of day you ask. But no, there was no formal constitution, certainly nothing similar to the American model of one single document that creates, you know.
a founding document from a founding father. Israel was supposed to get a constitution. It was promised in the beginning establishment of the state. That can got kicked down the road and 75 years now, 76 years into the country's history. Might be good to have one, but that's another story. That's another conversation. There are democracies that don't have them. There are authoritarian states that have them that don't use them in any real way. The Soviets had a constitution that they...
Just ignored most of, but it sounded good. England does not have a constitution. They're a vibrant democracy. But let's talk about how a government gets formed in this world because I – Mentioned earlier that in the early days of the state, the Labor Party, left-leaning party, the founders of the state, many were from the left. They were dominant. They had a large...
A group of voters who liked them, and then there were voters on the right who had a right-leaning party. But now there's no single party, partly because of the splintering. We talked about within the Netanyahu ecosystem. The right, the name for Netanyahu's party is Likud. The Likud party does not have... 50 plus percent of the vote in a long time. And so what that means is a coalition has to be formed that has at least 60 members, 61 or more. So talk about how.
The coalition gets formed and the jockeying that takes place in that. So first of all. In Israel, you only, almost only ever have a plurality, not since the early days of the state has any single party, you know, one, an actual absolute majority, which in this case would be a majority of the 120 seats.
61. So in Israel, you're always looking at a plurality, and perhaps what's interesting is that The party that forms the, and this kind of highlights how important personal politics and coalition building is in the Israeli system, which is that... The largest party is often, but not necessarily the party that forms the government. If you recall, there were the elections of, I believe it was in 2008. let me think, I think it was 2013 when CP Livni actually became the
The largest party, her party Kadima at the time, had one seat above Likud, which was then run by Netanyahu as it is today. But she couldn't. find partners that would bring her over the 61 threshold. And in the end, she had to basically abdicate the mandate that's given by the president. It's one of the presidents.
The president in Israel has a largely ceremonial role, and that's kind of one of the few points of actual involvement in the political system, where the president gives the party leader in the Knesset, not the largest, not the leader of the largest party, but the leader of the party most likely to be able to form a coalition, the mandate to form a government. So again, it's kind of the wheeling and dealing.
is not just a formality, it is really essential to the Israeli political system. And I would also say, I think that's... Part of what leads to, there's a lot of disenfranchisement. I think this happens in the U.S. as well over the last, you know, at least 10 years, maybe 15 years, where a lot of people feel very frustrated with the political system. They feel that they vote, but they don't get what they voted for.
Or they vote, but their votes don't influence, they don't hold the public, you know, they don't hold, they're unable through a voting mechanism.
to get the government that they hoped for or to hold their political leaders accountable. There's a growing sense of frustration, which I think is in Israel and not just in Israel, but a larger... global phenomenon as is you know the move rightwards which is a global phenomenon which israel is part of but yes what happens is is basically you form a government and a you do that by uh one of two measures one is
money and the second dispositions. So the head of the largest party or the party that is spearheading the negotiations then sits down at the negotiating table with generally two, three, even four or five partners. And what they do is they offer them a bit or a block or a portion of the sovereignty of the nation in return for their participation within the government. So they offer them positions in government and the larger...
the party or the more important the partner party, the better or the more prestigious positions they'll be offered. You know, most prestigious being a minister of finance or minister of justice, right? These are very senior positions which have a minister. defence in Israel is critical.
These are kind of positions that have independent power sources or independent bases. They control the largest ministries, the largest budgets. And so, you know, an ideal system, the head of the, you know, the major party, the party that's going to put forth.
Prime Minister would want to keep those positions within their own party, but the reality is different. You need to bring in your partners. And so you do that by giving them ministries and giving them positions, and you also do that by giving them money. what's called coalition money. So in Israel, we have a budget. The budget is a...
tightly controlled, much more so in the United States. We're a small country, we don't have the luxury of an enormous deficit. And one of the lessons learned from the runway inflation of the The 80s is very tight control by the Treasury, a professional level of the Treasury, not the political level of the national budget. And every item in that budget is closely scrutinized.
But, and then you get to the asterisk, you have the coalition money. Coalition money is money that is allotted from the Treasury. to, generally not to the parties, but to organizations that the party is a patron of, right? So if we're in the religious Zionist world, this would be, you know, or in the Haredi world, this would be... NGOs or generally educational institutions, military prep institutions. We're talking about religious Zionists, yeshivot.
You know, these kind of institutions of higher education or lifelong education that the ultra-Orthodox world is part of. It can be day schools. It could be community centers. It really could be almost anything. It's interesting you're mentioning this because in the United States right now, there's this huge fight over...
Doge. Yeah, Doge, the Department of Government Efficiency, saying, well, this... We have Doge on steroids. We'll kind of reverse. We're not cutting, we're giving. Yeah, because... USAID has become – this week was the issue. I don't know what's going to happen there, but Doge and Trump and Elon Musk have been – railing against all these NGOs who are getting funded by government, raising the point that to what extent are they a non-governmental organization, right? An NGO is a, in theory, a...
nonprofit that serves a public purpose, but it's not part of the government. It's non-governmental. But of course, if its funding is overwhelmingly from government budgets, it's kind of a shadow government organization. But here in Israel, it's... That's standard procedure.
Yeah, I would even go more so. I mean, we have huge education, you know, I mean, there's huge parts of the ultra-Orthodox world that without government funding fall apart. I mean, it's not even a majority, it's everything, you know. It's 90 plus percent of the funding.
And so and that is coalition money. I would know perhaps a, you know, to raise a question, I know that day, you know, this is the sort of things become very unpopular in the US. I actually think the coalition money ironically is a positive thing for these. Israeli democracy. And I think it's a positive thing because, well, I guess in Israel, any problem you can solve with money is a small problem, you know, an easy problem to some extent.
In a difficult region, problems you can solve with money are somewhat easier. But also because I think it creates buying. When the Haredi parties, when the ultra-Orthodox parties started becoming... part of the inner workings, the wheeling and the dealing of the Israeli system 20, 30 years ago, their populations were largely detached from the general Israeli public. Their children didn't necessarily...
speak Hebrew, many spoke Yiddish, right? You know, they learned in their separate schools. They worked in as much as they worked, you know, in a separate environment. They didn't have a, you know, a press system or newspapers or television. or internet sites that, you know, kind of covered the workings of the Israeli government or the society in general. And today that has completely and utterly revolutionized.
I mean, if you want to see a free, a kicking, screaming, you know, biting free press, you go to the Haredi world. It is, you know, cruel and critical and brilliant. its ability to follow, analyze, and pick apart Israeli society and politics. And now mainstream Israeli society is in the house, whether it's in print or the Internet. And yes, they have computers in much greater percentages than one would realize, or whether it's, you know, podcasts or radio.
shows the the money the coalition money has brought political buy-in from the parties but it is also bought a cultural buy-in you know from the man on the street And I think that it would be very, very hard for the Haredi subsections of society to backpedal that and become less interwoven into the general Israeli society. And that's what gives me hope.
for the question of the draft that you mentioned earlier. I think in the end, they can't backpedal, and we will see whether it'll be in five years or in 10 years. Or in less than that, we will see, and here I'm predicting the future, which is always a tricky thing. But I think that we will see a huge uptick in Haredi.
And, you know, Haredi enlistment in the Israeli army, whether it's in specific subsections or whether it's more in the medical field or, you know what I'm saying? No question that it'll have to be adapted at some point, but the start of that process. is in the coalition money. So I'm not quite as romantic as you are, Rachel, but let me try to, I want to make your case a little bit and then I want to, or at least I want to try to...
Let's make sure I understand it. And then I want to just raise some general issues of incentives that an economist would. The negative way to say what you're saying is that when there's a trough. that you can feed at, you're going to pay more attention to where it is and how it's set up and what it's made out of and when it's open to the folks. But it creates dependency in the end.
Yeah, which is a big difference between once you cross the line into dependency. Right. Then maybe you're not no longer milking the system, but the system owns you. Yeah. So it's the part I agree with you is that it has. Encouraged and incentivized engagement. And so people in that world, which is alien to most of our listeners, but this is the ultra-orthodox.
You know, Rachel was saying they have more computers than you think. You know, traditionally, they're not Amish, to use an American example. But there's something like the Amish. They have a suspicion of certain technologies about they try to stay separate from. the modern world to some extent, if not a large extent. And so they tend not to watch as much television or be on the internet to use smartphones. But times are changing. And as you point out, some of that is...
a result of the political process and the way they've become connected to it that they were not connected before. But I want to think more generally about the coalition because it's such an alien concept to most. So if you think about it, you have a – you've got some – a plurality. You don't have a majority. And so you've got to gather other – parties and their seats, you've got to patch together that 61 plus coalition.
And so what you're doing is you're offering goodies. That's the part you've emphasized. You have to offer goodies to those folks to come into your party because by definition, they stand for something slightly different from you. That's why they had a separate party. You're forced by this coalition process and the plurality rather than a majority to offer them things, and they in turn have to compromise and accept a partnership with folks that are not quite like them.
The other thing that's going on, though, that I just want to emphasize as an economist looking at this as a newcomer from the outside is, of course, they're in competition with each other to have access to those goodies. So some in some situations. They can demand a lot because they are going to be essentially the group that puts the coalition over the top. But in other situations, there's alternatives for the...
plurality party to choose from for Netanyahu to choose from, and you won't get those goodies. And so you'll accept a lesser cabinet role, for example, or you might accept a smaller amount of money. The competition that in, say, America takes place at the ballot box or in the primaries over the jockeying for which part, which, excuse me, which attitudes, which. policy positions are going to get centrality, is taking place in this weird, at least an outsider, a newcomer, this sort of alien...
jockeying for position with zero transparency to the public. That too. Yeah. Coalition agreements are published, and they are published on the Knesset website. But as the Supreme Court ruled back in the early days in a seminal ruling, that although they are agreements... i.e., they look like contracts, they are not in any sense enforceable. It's a handshake deal.
It's exactly it's a handshake deal. And yes, that has been brought to the court, you know, by one party claiming, you know, that another party didn't fulfill their obligations. And the court basically said, you know, this is between you guys. Yeah. And that, of course, if you don't honor your commitments, you eventually make it. becomes harder to get future people to join in with you. And that's one of the reasons Netanyahu has lost so many.
protégés and friends is they felt he didn't keep his deal, so they went off and did their own thing. Politics is people. In a large country and in a small country, all the more so. So let's talk about a very interesting aspect of the system that, you know, for an economist or political science, political scientist is fascinating, which is the threshold. Israel was first started, you only had to get 1% of the vote to get into the Knesset, to get representation. Up until 1992?
You only needed one percent of the vote. Correct. And so what that did, of course, is that it encouraged splintering and lots of parties and everyone didn't people like that. It meant that a coalition often had to patch together numerous members to get to 61 plus. And it also, of course, meant. that there was a lot more competition among those members to get into that situation. But in 1992, they raised it to 2%. And then in 2014, 2014, I think.
They raised it to three and a quarter. So right now. In 2004, they actually raised it to 2% in 2014. And at the time, the idea was to get up to four or even above. It never happened. But the hope, the art that they were, you know, it was some very well-meaning political scientists of an American background.
I think completely missed the mark when it comes to parliamentary democracy. But yeah, that was the idea, was to stabilize this chaotic coalition system to help build large parties so they wouldn't be prey. to a manipulation, extortion, you know, on the part of, you know, kind of very small parties that, you know, were able to control resources that was not proportional to their representation within the general society. And so that was the idea.
jump, the seminal jump, as you said, was 2014, from 2 to 3.5 percent. Three and a quarter, I think. As a result of that change, it meant that if your party, the person... And part of you voted for got, say, 3%, which is not a small – seems like kind of a large number. Your vote essentially doesn't count. You're – in America, people will often lament. Third-party voting, which I voted for many times in the past for third parties in America.
And people say, well, you're throwing your vote away. Well, I said, your vote doesn't count so much when you vote for one of the two major parties either. You're not breaking a tie. But in Israel, what it means is there'll be a large... collection of people with strong passion or interest for a particular issue that that party represents, and they do not get a seat in the Knesset, which means that All the other people who got over the three and a quarter get –
effectively your vote, your share. And it's actually worse than having your vote being thrown out, right? If you vote for a third party, you know, and your third party doesn't make it in, then basically they just shred your vote. But in Israel, the way it works is it's a percentage, right? You need 3.25% of the vote to get in. So if your party doesn't get in, your votes are essentially redistributed.
between the parties that did make it into the Knesset. And the way the algorithm works, it's a bit complicated, but the way it works is that it heavily favors the large parties, which basically means that your seats are redistributed.
to your competition, right? So, for example, in January 2023, Meritz drops below, this is the last election, below the threshold list, which is a far left or center-left party, okay, you know, assuming, you know... where you fall on that spectrum and their seats are redistributed between the major parties. And the way it ends up working out is that Ben Gavir, the far right, actually ends up with an additional seat that more or less is the people who wanted to vote for the far left.
And he inherits, you know, those votes. And obviously that is a source of enormous frustration, you know, within the Israeli political system. and the necessity to game the system so that you are you know, you are above the threshold and don't fall below, and if you fall below, don't give your seats, right, to your, you know, ideological opposition, has become...
It kind of a founding strategic principle of the Israeli system. And I would say, and you look back at this, I would just go back a second. The purpose of this was well-meaning and well-intended reform was the stable. the system and as you said it passed in 2014 and it actually had almost entirely an opposite effect.
of just completely destabilizing the Israeli system. We start seeing that effect coming into place in 2019 when we go into the first of... a maddening series, this must have been when you came to Israel, of five re-elections. And what it starts with is in April 2019, Naftali Bennett, who was running on what was called the New Right Party then,
it falls just under the threshold with 3.24% of the vote. Okay, so it's, I mean, it's maddeningly close. And in fact, When all those votes are tallied out, he's short about 5,000 votes, which is, I mean, it's... It's the blink of an eye. It's nothing, right? They then retally the votes. You have to recalculate and it goes down to 3.22, but the point stands. It's incredibly close.
And in that same election, the joint list, the joint Arab list, which is Rahm and Balad, which unites the Islamist and the national secularist parties of the Arab electorate, they clear the threshold, but with 3.33%. of the vote so again they just they squeak in and and this is i mean it's eight hundredths of a point okay between those who fall below and those who go above and it's and the difference is again it's a couple thousand votes in either direction and because of that
the majority party, or at least the largest party of the time, which is the Likud led by Netanyahu, because of that and because of various internal politics and fracturing within the right or within the centre. of those who are willing to enter into a coalition with Netanyahu and not, he is unable to cobble together a coalition. And it's important to say that if Bennett
had crossed the threshold, okay, and Ram Balad had not, right? If those 5,000 votes had swung in a different direction, then Israeli politics… You know, it's one of those forks in the road. Would have forked in a different direction and we would be today in a radically different place.
But, you know, history is history. And because you can't cobble together the coalition, we go to a second round of votes and then to a third, fourth and a fifth. OK, until a until in the end you create a and essentially the benefit. government, which ousted Netanyahu for about a year and a year and a bit before Netanyahu comes back in the 2023. But actually, I think that the big difference, that the kind of the reshaping of the Israeli strategic political mind.
It wasn't in those very frustrating periods of five votes, which had enormous economic fallout because there was no budget and the budget hadn't been passed and the workings of government kind of screeched. gradually and then faster to a halt over the course of that period. And obviously that adversely affected hundreds of thousands of individual citizens. But there was also a strategic difference, which was, and here you have to give credit.
to Netanyahu, not only, but mostly to Netanyahu, I think he was one of the first to see it, was that in a system where parties hover so close to the threshold, where such a small number of votes, several thousand votes, I mean, really a handful of thousands of votes can swing an election to one direction or another, the way to win.
or the way to ensure that you win is to bring out electors that have traditionally been felt disenfranchised, have been less interested in voting, i.e. people who are on the extremes of the political system. And Netanyahu saw that first in 2019 and he went through a process. of, let's say, rehabilitating the far-right party of which Benghavir is, you know, the current, the main representative. But, you know, this kind of conist, very far-right faction that had been taboo.
for the decades before. But my understanding is he also did something, besides encouraging them to come out and vote, he also literally made a deal with some of the parties on the far right that... People in America who don't follow Israeli politics think that Netanyahu is this far-right figure. He's actually much closer to the center.
He's actually the left wing of his own coalition. Yeah, of his own coalition, but he's taken in – Ben Gavir is the most visible. Some Americans will have heard of him. The most – Saber rattling and hardline person in Netanyahu's coalition. And he made a deal with this party and another party got them to essentially unite in their electoral.
It's a weird law, I understand, where they could count their votes together to get above the threshold, and then they get some sort of independent promise from him about what reward they'd get. And the left did not. They merged. They run. But they remain separate parties so they can disintegrate without having the party be ruled illegal afterwards. It's like a party conglomerate, confederation of parties. And he saw that.
He saw that and the left decided either they found it distasteful to do that confederation or Lapid, who was Netanyahu's opponent, didn't have that pre-election. uh strategy to get them to merge to offer them something in advance and as a result we have netanyahu who is seems to be What's the right word? He is a king of Israeli politics.
The pendulum swings right, it swings left, and Netanyahu has been able to, you know, his political instincts are phenomenal. But he's doing this, and here we are, we're in a war. He is under indictment. He – again, very similar parallels to the United States, a person who is a lightning rod of public opinion. People either despise him or love him. This person, Netanyahu, is –
If he doesn't stay in office, he's very vulnerable to prosecution, people suspect. So to some extent, and I'm an amateur here and I don't want to overstate it, but to some extent. He is beholden to Ben Gavir, who is very unrepresentative of the Israeli public. I would even go farther and say, I mean, Meghavir is the better known, also because he's extremely verbal, of Netanyahu's kind of new partners. But he also brought in people who are much farther.
out there, you know, in terms of the Israeli public opinion. For example, Noam, which is a proudly and vocally homophobic party. you know, that has a platform that opposes gay people, that is in favor of conversion therapy, that has really... Beyond distasteful in my mind views regarding people with disabilities. However, however, those folks have not had their agenda in effectuated in any way in this current world.
They do not have their genuine effect rate, but they do have their representatives in... a political party and in senior political appointments in a way that has, you know, has never been. Fair enough. But I'd say right now in this moment. Ben Gavir's hawkishness with respect, say, to Gaza, the willingness to negotiate a ceasefire hostage deal is disproportionate. His power is disproportionate to his.
support within the Israeli public, but he's very powerful because he potentially can bring down the government. or with others bring down the government. And that's the strange part of this parliamentary system. So why don't we turn to the question of how a government can fail before the election? So once you're elected, once you're elected. I'm sorry. Go ahead. No, I was going to say once you're elected, in theory, the next election is four years away. Is that correct?
Yes, that is correct in theory. I would just go back a bit. You mentioned, you asked the question, I think it's an interesting question, why Lapid didn't do something similar, right? Why didn't the left, you know, kind of create a similar conglomerate parties and make it over the threshold, right? Because the left... lost a lot of votes. I mean, Merz didn't make it over the threshold. And that's a huge, as we mentioned, a huge loss in the 2023 elections.
And I think that the answer is in the cultural DNA of each party. One of the sources of strength of Netanyahu specifically, but the Likud and more generally, is the loyalty to the party leader. Likud has only ever had four leaders since its inception at the beginning of the state, and all four were prime ministers. And you can, you know, you can criticize, you know, the critics.
of Likud, you know, will use all sorts of, you know, derogatory terminology, calling them sheep, and they'll vote regardless, and they don't think. But loyalty, party loyalty, is incredibly... powerful thing because it allows you to make unpopular decisions, whether they're unpopular to the general public or unpopular within your own party. And that doesn't exist at all.
You know, within the left, the labor, for example, it recycles their head. I mean, something, you know, on almost an annual basis. And that creates an internal destabilizer. which makes it very, very hard to go to unpopular or conciliatory or any sort of accommodation, whether it's within the left block, creating a conglomerate, or whether it's within policy for the country in general. So, these little bits of DNA, these cultural things, they have
they have far-reaching effect within the Israeli electorate and within the Israeli political body. And that's why it's important to understand a bit more kind of what happens behind the scenes and what people are feeling and thinking because then what... What seems like a very chaotic system suddenly makes a lot more sense. So in this period of the last 16 months, well, in the aftermath of October 7th, there were a number of times where.
Coalition members threatened to bolt and bring down the government, which would have precipitated an election before the normal four-year period, which, again, is something different than many other, let's say, in America. But it didn't happen. And how could it happen and how likely is it that it can happen, that someone would leave? Much less likely. Say again?
It's actually much less likely than commonly believed. Israeli leaders, one of their famous lines or popular lines, right, especially when they speak to Americans, is I can't do that, right, because my government, you know, will collapse or, you know, I'm going to lose this.
I'm going to lose this partner or that partner. It's much harder to bring down an Israeli government, and that's a reform that came through in the past few years, which basically says in order to advance a no-confidence vote, okay, i.e., to say that the ruling coalition no longer has a majority of the parliament, it's not enough to simply vote against the ruling coalition, i.e. to say we no longer have confidence in them. We have to actually present
to the members of parliament, to the MKs, an alternative, right? It's what's called a constructive, no confidence vote. And that is, you know, in a political system, to vote against is easy, to vote, to agree on who you're voting for. is much, much more complicated. I would also say even before that reform came into effect, there's only one, maybe two instances in the history of Israel in which a government has fallen.
a over no confidence vote so although there is a lot of talk of it and it's often used as an excuse to just to uh to you know kind of get out of out of under the thumb of uh you know forced to make unpopular decisions or or take unpopular stances and certainly often an excuse
to the American president, whoever the American president may be, if the Israeli prime minister is not interested in playing ball and whatever capacity is on the table, it's actually much, much, much less common. In fact, it almost never happens. You can really find... And the few instances are in the early years of the state.
What is much, much, much more common is that the government, as you well know, right, Israeli governments rarely make it to their full four-year session. You know, you've been here long enough to know that, you know, elections here are vacation day. And we like vacation days. We like to have them as many as possible. So, you know, what does actually bring down the Israeli government? And that is the budget for the most part. In Israel, you have to pass an annual budget.
You can vote on a biannual budget, i.e., and that gives you an extra year of breathing room. But if there is no budget, the Knesset automatically dissolves. And that's really important because at the moment... We're in a new financial year, right, 2025, and there is no budget yet. So if the Knesset doesn't manage to ratify the budget by March 31st, the government automatically dissolves. And that has been the kind of the...
the coalition dissolution point of preferred note. It doesn't require for anyone to actively vote against the coalition, which is often... Although the leaders of the party might be interested in doing that, it's often very unpopular on the base, right? The average citizen is frustrated with the instability of the Israeli political system. and often doesn't see the things that the leaders see as being so...
egregious that they need to pull out or they need to topple the government is often not shared by the average citizen for a large variety of reasons. So generally speaking, what brings down the government is a lack of agreement over the budget and this actually brings us back kind of full circle to the coalition agreements because what is the budget the budget is once again right it's divided up sovereignty through financial mechanisms it's who gets how much money where when and how now unlike
coalition agreements and the coalition monies here there's very careful oversight right uh over that you know or at least much more oversight over those monies there's also oversight of the coalition monies but it's It's more compartmentalized. Here there's, you know, full oversight, but still the budget is an opportunity to, you know, decide what your priorities are, you know, as a sovereign state and as a leader.
And that disagreement over what forms the government is the agreement of how you divide up the money. And generally what brings down the government is disagreement as to how you divide up that same pie. further down the road uh and that is what will most likely if this government falls apart will fall apart over that we will hit march 31st without a ratified budget
And then the Knesset will automatically dissolve and we will go to elections in July. Well, we'll see. I want to close with talking a little bit about the future and maybe just a little bit of. Utopian imagination. So, as you said, the future is hard to predict. I would never have imagined. I didn't think Trump would win the first time.
Of course, once he lost, I knew he would never be nominated again. And then if he's nominated again, he's not going to win. So I was wrong at least three times on October 8th. Shortly thereafter of 2023, I was, of course, certain that Bibi Netanyahu had no political future and that everyone associated with October 7th would be.
not in the public eye anymore. I think everyone agreed with you on that last one. That agreement from wall to wall. I also thought there was no future, and here we are. Here we are. He is a phoenix, Mr. Ninya. He rises from all kinds of ashes, and it's really quite extraordinary. We'll see what the future holds.
But what I want you to think about is if you could change something about the Israeli political system, anything, what would be the change you would make? If any, maybe you like it the way it is. Actually, I do like it the way it is. I am in that minority. I think that the chaotic, at first I would never, never, never move from a parliamentary system to a presidential system similar to the American model.
presidential system in many ways is much simpler. It's easier to get things done, right? You have your king. in you know in the term of the president and they have you know executive power and that creates a simplicity or at least from the as an outsider perspective it seems I'm sure you know as an insider perspective it's much more complicated but I think that the frictitious and not somewhat incredibly chaotic parliamentary system of Israel is a it is reflective of the population in general.
I think in that sense, it is a vibrant and effective democracy, as in, you know, we are a society that is a, you know, united, divided, chaotic. all at the same time. And our political system is reflective of that. And it is a place where all of those divisions that divides us and that binds us can be hashed out in front of the cameras.
it is interesting in the fact that it's probably one of the few institutions in the entire country, public or private, where people from the far left and the far right were the ultra-Orthodox and the Arab parties and the integrationists and the anti-integrationists, right? center all sit in a room and yell at each other. And that has value.
And out of those, you know, out of that frustration and out of that interaction, also come partnerships and also create, you know, legislation that is beneficial to. The average citizen, for example, when I was in the Knesset, and this is almost 10 years ago, one of the large pieces of legislation that has been debated recently, whether it was a good idea or a bad idea, was a law to...
indemnify the consumer if commercial flights are cancelled or late, so that they can receive some sort of indemnity or some sort of insurance policy. And that was a bill that was pushed forward by Ahmad Tibi, an Arab MK from a non-integrationist, anti-Zionist party. And it was pushed through with the support of...
all of the major Zionist parties. So the Knesset is a melting pot, not in the sense that people come out similar, but in the sense that they do interact and they do reflect the interests. and the needs of their various populations. So I do think that something works, you know, within the cacophony. What I would do is I would add, I would double, even triple the number of MKs.
The system simply doesn't work. When Israel was founded, you had about half a million people who had the right to vote or the potential of the right to vote. Today, within the next decade, we're... potentially going to hit the 10 million mark, if not within the next decade, then a bit after that. And you simply can't put the weight of that population on the same 120 number.
And that is a vastly unpopular move within Israel. There is a view that politicians are people who are useless and feckless and don't work anyhow. So the last thing in the world we need is to fund more of them off the public purse. But I do think that that would create a greater accountability and cause a greater specialization.
You have to remember in the Knesset, we have, let's say we have 80 members of Knesset who are in fact members of Knesset and not part of the executive. We have 15 standing committees, statutory committees, committees created by law that have to be in the Knesset in addition to, you know, a whole series. ad hoc, established to deal with specific issues or to give specific mandates. And what happens is that you have 40 members.
more or less a part of the opposition, 40 are part of the coalition. So that is their job, is the legislature's, is the makings and the details of parliamentary rule. And because there's only 40 of them and we have 15 standing committees, right, they are members of three to five committees at the same time. Each of those committees meet simultaneously. And so, you know, you get...
You find yourself running, you know, from 8 o'clock in banking reform, you know, to 9 o'clock, the welfare system, to 10 o'clock, should we attack, you know, in AZA after, you know, the new rockets, to, you know, 11 o'clock, what's going on with the light rail? And why, you know, isn't it? And during that time, you've been missing at each hour at least three to five similarly important and critical debates. And so...
It's just, as I would say, you know, after many new MKs or members of parliament after years in the Knesset, it doesn't matter. You could have been, you know, the head of the best tactical op team and then gone on to do a doctorate, you know, in economics. Harvard and in medicine at Yale, you will fail as an MK. It is.
possible job it cannot be one and so i think we need to rebuild the system so that uh you know kind of more similar to the american model you could have one committee where you are most invested where you can create specialization where you can deeper learn the issues that are involved. Just as a point, an average member of Congress can have dozens of aides.
Right. Depending on what exactly their position is and what the weight of the responsibilities are within the legislative process. In Israel, traditionally, members of parliament had two aides, one of which was their driver.
And about, you know, and about a decade ago, it was raised to three. And this was, you know, this was huge thing. Now you can have three. Right. So you can have the driver who's also the secretary. Right. And the person who does your kind of political party. And then you have one person who also has to do.
the legislature um and that's just thought i understand israel in israel we always like to do everything on a shoestring budget right we have you don't know we have we have maybe we have doge in our blood right we have a deep you know, frustration with anything that maybe goes back to our early socialist days, than anything that's, you know. looks like it is fanciful or wasteful or luxurious.
Luxurious, right, in any ways. But, you know, with all that in mind, you can't run a country of 10 million people with, you know, 120 MKs and, you know, two and a half aides. It's just not viable. Yeah. So I was going to say, Israel is a very large public sector, so the doge in its blood is a different kind of doge. That's true. But the point I want to close with is... how democracies work, in particular how minorities and majorities get a voice. And when you look from the outside, when I was...
Growing up and looking at Israel from the United States, this chaos you're talking about looks extremely unattractive. Collapse of coalitions or the inability to form a coalition or the splintering of all these small parties that can hold – Can use their power in this coalition buildings we're talking about to get influence way beyond their means, way beyond their actual proportion in the population. So that's the downside of this parliamentary system. The upside, which is.
harder to remember is that in America, because they're really only two parties effectively, minority positions within those parties get nothing. So if you – just to take a random example, if you were, say, a free marketer, as I have been most of my life, in the United States, the Republican Party pays lip service. to free market ideas. But there's really not a base for those views within the party. There's jockeying for position over time. Sometimes you get a more or less free market candidate.
There's no real power for that base. That base is small, those of us who are more free market. And because we're small, we get nothing. The threshold is quite... effectively much more than 3%. It's something much larger. And now we have a president in the United States, a Republican, who... not free market oriented. This has already imposed tariffs and done things that free marketers don't like.
Some things free marketers do like, but I don't think that's because of his, quote, free market principles. But my point is that within the Israeli system, if you're part of a viewpoint that has 3.25% behind it, You can get into Knesset. You can, in theory, be part of a coalition and therefore get a goody, either some power to affect policy in the direction you want or – resources to achieve things you care about. And so that system, in a funny way, for all that chaos, in a way gives a more...
is in many ways more democratic, even though it struggles to sometimes stay in place. And I had not thought about that much before I came here and before our conversation. That's very interesting to me. I completely agree. And also, I would say that's why I would be in favor of lowering the threshold, you know, and creating a less of an obstacle. For example, if we, you know, looped back to the question of the ultra-Wortox.
There are streams within the ultra-Orthodox that are in favor of joining the military, and in my mind, it's more important. joining the economic and the tax base of the Israeli system. They exist, but they are at the moment too small to cross the threshold. But if that threshold were to fall...
And it wouldn't even have to fall that much. Let's say to, you know, you could keep a threshold one, one and a half percent, even two percent. Then these new voices would squeak into the parliament and they would be amplified. Well, you know, on the national and perhaps even on the global stage. So, yes, it is chaotic, but it is very much a participatory democracy. And whether it's, you know, on the part of the citizen or citizen groups or interest groups.
You know, that's an interesting thing we can talk about another time. That was, you know, where my organization, you know, the lobby 99, the public lobby was founded, but it was founded exactly on that principle was that the ordinary citizen, if they organized. can, at least in the Israeli system, be incredibly influential because within that chaos is an openness.
to a participatory, you know, system of creating policy where really anybody who has expertise and time can come and be part of that legislative process. It's kind of an old school democracy. We're not quite like the Swiss, you know, where we kind of go out onto the hill and, you know, raise our hands in favor. But it is certainly a much more hands-on.
than the vast American system and even than most European systems of comparable size, comparable population size. And so it's an exciting place to be. You know, it's a fun place to do politics. And it's a place where if you get involved, and that's true of almost anyone, you can garner a significant influence and the ability to create real change.
And I think that that in the end, you know, is the sort of buying you need to keep a democracy, you know, healthy and happy. My guest today has been Rachel Gore. Rachel, thanks for being part of EconTalk. Pleasure. Thank you. This is EconTalk, part of the Library of Economics and Liberty. For more EconTalk, go to econtalk.org, where you can also comment on today's podcast and find links and readings related to today's conversation. The sound engineer for EconTalk is Rich Goyette.
I'm your host Russ Roberts. Thanks for listening. Talk to you on Monday.