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1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference 2008

1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Page 1: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Israel and the OECDA Comparison Based on

The Herzliya Indices Approach

Presented by

Dr. Zalman ShifferThe Herzliya Indices Team

Herzliya Conference2008

Page 2: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Team MembersMs. Leah Achdut – Van Leer Jerusalem Institute; The

Ruppin Academic Center

Dr. Michel Strawczynski – Bank of Israel

Mr. Tommy Steiner – IDC Herzliya

Dr. Zalman Shiffer – Economic Advisor

Team LeaderProf. Rafi Melnick - IDC Herzliya

With thanks to Michal Ophir and Refaela Cohen (National Insurance Institute of Israel), Polina Dovman (Bank of Israel), and Gilad Skutelsky (IDC Herzliya) for their assistance with research.

Herzliya Indices Team

Page 3: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Purpose of the Presentation

The purpose of the present enquiry is to carry a systematic quantitative comparison between the economic, social and governmental/political performance of Israel and that of the current and potential future members of the OECD.

This will serve as background for evaluating the compatibility of Israeli achievements with the standards of the members of a leading advanced and democratic international organization.

Page 4: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Methodology

• Comparing Israel’s economic, social and governmental/ political achievements to those of:

- The OECD Members- Relevant Sub-Groups of the OECD- New Candidates to the OECD - “The Current Accession Talks”

group- Potential Future Candidates - “The Enhanced Engagement"

Group

• Using the Herzliya Indices wherever possible and partial components of these indices in other cases.

Page 5: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Groups of Comparison 26 OECD Members:• Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland,

France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea (Republic of), Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

OECD sub-groups• Scandinavia :Denmark, Finland, Norway, Sweden• Western Europe: Belgium, France, Germany, Ireland, Netherlands,

Switzerland, United Kingdom.• Southern Europe: Greece, Spain, Portugal.• Central Eastern Europe: Czech Republic, Hungary, Poland.

Candidates:• Current Accession group: Chile, Estonia, Russia, Slovakia and Israel• Enhanced Engagement group: Brazil, China, India, Indonesia, South

Africa

Page 6: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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59.263.2 64.0 66.8

56.0

46.5

110.1

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Economic Herzliya Index | 2006

Page 7: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Evolution of the EconomicDimension 1990-2007

35

40

45

50

55

60

65

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Israel OECD Southern Europe Central Eastern Europe

Page 8: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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89.1

100

121.5114.2

81.9

61.3

48.4

23.7

0

20

40

60

80

100

120

140

GDP Per Capita (% of OECD Level) | 2006

OECD Level

Page 9: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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89.1

100

42.6

55.7

38.8

56.6

2924.9

12.2 13.6

38.7

0

20

40

60

80

100

120

GDP Per Capita (% of OECD Level) | 2006

OECD Level

Page 10: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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95.299.2

104.5100.3

94.797.7

100.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0

120.0

Social Herzliya Index | 2006

Page 11: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Evolution of the SocialDimension 1990-2006

90

92

94

96

98

100

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Israel OECD Southern Europe Central Eastern Europe

Page 12: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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103.1100 101.2 101.5 100.8

92.6

88

75.9

50

60

70

80

90

100

110

120

HDI Life Expectancy (% of OECD Level) | 2005

OECD Level

Page 13: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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103.1100 99.5

86.2

74.6

91.987.2 88.6

72.2

83.4

48.1

40

50

60

70

80

90

100

110

120

HDI Life Expectancy (% of OECD Level) | 2005

OECD Level

Page 14: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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0.301

0.245

0.286

0.353

0.289

0.377

0

0.1

0.2

0.3

0.4

* No Data for Currant Accession and "Enhanced Engagment" Groups, New Zealand and Turkey

Gini Coefficient* | 2006

Page 15: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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88.394.8 93.0

83.780.0

98.0

71.6

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Governmental/PoliticalHerzliya Index | 2006

Page 16: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Evolution of the Governmental/Political Dimension 1996-2006

70

72

74

76

78

80

82

84

86

88

90

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Israel OECD Southern Europe Central Eastern Europe

Page 17: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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40.8

100 102.6

90.5

61.5

112.7

94.1 94.5

0

20

40

60

80

100

120

Political Stability and the Absence of Violence (% of OECD Level) | 2006

OECD Level

Page 18: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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40.8

100 101.0

54.3

103.3

74.4

65.7

51.3

41.1

75.0

103.3

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Political Stability and the Absence of Violence (% of OECD Level) | 2006

OECD Level

Page 19: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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82.6

100

115.5

107.6

88.0

79.575.0

58.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Rule of Law (% of OECD Level) | 2006

OECD Level

Page 20: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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82.6

100

88.3

41.1

75.8

52.2 54.4

69.1

43.4

70.9

94.6

0

20

40

60

80

100

120

Rule of Law (% of OECD Level) | 2006

OECD Level

Page 21: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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91.7

100

117.6

106.2

85.882.4 82.1

64.8

0

20

40

60

80

100

120

Government Effectiveness(% of OECD Level) | 2006

OECD Level

Page 22: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Overall Evaluation• In terms of past OECD standards, Israel has a

reasonable economic record, marginal achievements in the social dimension, and is lagging behind in the political dimension.

• In spite of these weaknesses, Israel is ready for OECD membership and is in the position of both benefiting from membership and contributing to the achievements of this organization.

• Israel could have qualified for OECD membership for some time; the timing of its invitation to join the organization may have been related to political considerations.

Page 23: 1 Israel and the OECD A Comparison Based on The Herzliya Indices Approach Presented by Dr. Zalman Shiffer The Herzliya Indices Team Herzliya Conference

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Overall Evaluation - continued

• More detailed assessment indicates that Israel’s mixed socio-political record reflects a combination of satisfactory and even good results in some fields with poorer achievements in other fields, notably the field of income distribution, and political stability and violence.

• Israel should be aware of its insufficient record in these important fields, and use its future OECD membership as leverage for improving its overall performance.