Interlocal Disparities in Israel’s Metropolitan Areas: The Impact of Crisis and Recovery in a Neoliberal Regime

Abstract

This chapter examines interlocal disparities within and between Israel’s metropolitan regions, showing that metropolitan areas in central Israel are characterized by affluent central cities, whereas in the periphery, cities have weakened and the middle class gravitates into exurban localities. Transformations in fiscal disparities are in line with the anticipated ‘neoliberal’ impact: sharp cuts in central grants initially led to skyrocketing deficits, but eventually improved fiscal capacity, although increasing inequalities. Paradoxically, the neoliberal discourse emphasizes the need for centralized patterns of action in order to reduce fiscal disparities, acknowledging the impact of severe crisis among weak local authorities on the legitimacy of reforms and cost-cutting measures. Such response aims to achieve fiscal discipline at the local level and reduce disparities with minimal increase in state support.

This chapter is part of a research project funded by the Germany-Israel Foundation for Scientific Research and Development (GIF), carried out with Hubert Heinelt, Technische Universität Darmstadt. The author thanks Magi Levi, who performed most data analysis.