Fiscal Allotment to Local Authorities: Is there Fiscal Discrimination against Non-Jewish Local Authorities?
This research examines government fiscal allotments made to Jewish local authorities in comparison to its fiscal allotments to Arab local authorities during the period 1994 – 2000. Data for this research was taken from publications issued by the Central Bureau of Statistics. This research is of particular importance because in Israel funding for many different areas of activity (education, social welfare, development, etc.) are channeled through local authorities. The first stage of this research compares the average fiscal allotments made by the Government to the Jewish local authorities with the average fiscal allotments made to the Arab local authorities. (The Druze local authorities were reviewed separately from the Arab local authorities; mixed local authorities were excluded from the database.) Findings indicate that the Arab local authorities received greater support. In the second stage, two additional factors were taken into account: (1) Size can be advantageous in the operation of local authorities. Consequently, it was anticipated that the amount of fiscal support per person in the smaller local authorities would be greater; (2) Fiscal allotments to local authorities that are weaker in socio-economic terms should be greater. Consequently, the data was analyzed according to population size, nationality and socio-economic class. Results of this analysis show that Jewish local authorities received more than their Arab counterparts, although the gap has continually decreased over the years.
Keywords: Local Authorities, Fiscal Discrimination, Arab Sector, Government Budget
Dr. Tal Shahor
Department of Economics, Max Stern Academic College of Emek Yezreel