Advertisement

Incorporation and Privatization in the Infrastructure Sectors in Israel: Processes and Consequences

  • Eyal Tevet
Chapter

Abstract

This chapter analyses the developments and changes in government companies in Israel, with particular focus on companies that operate in infrastructure sectors, and whose importance and impact on the economy as a whole is far greater than their financial output. Initially, the analysis presents the historical background for the creation of government companies in general, and in Israel in particular. The chapter then moves to assess the characteristics of Israel’s infrastructure sectors, and the processes of incorporation and privatization of government companies in these sectors. Finally, an assessment of the outcomes is put forward, highlighting concentrated ownership and a lack of competition; commodification of essential services; and a weakening of democracy.

References

  1. Agmon, Tamir. 2011. Analysis of the Tax and Retail Margins in the Fuel Market in Israel and in Western European Countries (Updated). Jerusalem: Knesset Research and Information Center (in Hebrew). www.knesset.gov.il/mmm/data/pdf/m02780.pdf.
  2. Agmon, Tamir, and Ami Zadik. 2010. Business Groups in Israel: Description, Analysis, and Consequences (Updated). Jerusalem: Knesset Research and Information Center (in Hebrew). www.knesset.gov.il/mmm/data/pdf/m02523.pdf.
  3. Aivazian, Varouj A., Ying Ge, and Jiaping Qiu. 2005. Can Corporatization Improve the Performance of State-Owned Enterprises Even Without Privatization? Journal of Corporate Finance 11 (5): 791–808.CrossRefGoogle Scholar
  4. Aschauer, David A. 1989. Is Public Expenditure Productive? Journal of Monetary Economics 23: 177–200.CrossRefGoogle Scholar
  5. Bank of Israel. 2009. Financial Report 2009. Jerusalem: Bank of Israel (in Hebrew).http://www.boi.org.il/he/NewsAndPublications/RegularPublications/Pages/2009_maaz09h.aspx.
  6. Bower, John. 2002. Why Did Electricity Prices Fall in England and Wales? Market Mechanism or Market Structure? Oxford Institute for Energy Studies EL 2. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.392.7983&rep=rep1&type=pdf.
  7. Butler, Eamonn (ed.). 1988. The Mechanics of Privatization. London: Adam Smith Institute.Google Scholar
  8. Friedman, Milton. 1962. Capitalism and Freedom. Chicago: University of Chicago.Google Scholar
  9. Friedmann, Wolfgang Gaston, and John Francis Garner. 1970. Government Enterprise: A Comparative Study. New York: Columbia University Press.Google Scholar
  10. Government Companies Authority. 1983–2015. Annual Reports on Government Companies. Jerusalem: Government Companies Authority (in Hebrew). Google Scholar
  11. Haber, Hanan. 2011. Regulating-for-Welfare: A Comparative Study of ‘Regulatory Welfare Regimes’ in the Israeli, British, and Swedish Electricity Sectors. Law & Policy 33 (1): 116–148.CrossRefGoogle Scholar
  12. Hamdani, Assaf. 2009. Concentrated Ownership and Business Groups in Israel: A Legal Analysis. Policy Paper 78 (in Hebrew), Israel Democracy Institute at Jerusalem.Google Scholar
  13. Joskow, Paul L. 2008. Lessons Learned from Electricity Market Liberalization. Energy Journal 29 (Special Issue: The Future of Electricity: Papers in Honor of David Newbery): 9–42.Google Scholar
  14. Kosenko, Constantine. 2008. Evolution of Business Groups in Israel: Their Impact at the Level of the Firm and the Economy. Article Prepared for the 2006 Sapir Forum. Jerusalem: Bank of Israel (in Hebrew). http://www.boi.org.il/deptdata/mehkar/papers/dp0802h.pdf.
  15. Maman, Daniel. 2008. Structural Changes in the ‘Big Economy’ and in Business Groups in Israel. Law & Business 8: 123–157 (in Hebrew).Google Scholar
  16. Mizrahi, Shlomo, and Eyal Tevet. 2014. A New Institutionalism Analysis of Electricity Sector Reform: Theoretical and Comparative Perspectives. Public Administration Quarterly 38 (1): 3–37.Google Scholar
  17. Morck, Randall, and Bernard Yeung. 2004. Family Control and the Rent-Seeking Society. Entrepreneurship Theory and Practice 28 (4): 391–409.CrossRefGoogle Scholar
  18. Morck, Randall, Daniel Wolfenzon, and Bernard Yeung. 2005. Corporate Governance, Economic Entrenchment and Growth. Journal of Economic Literature 43 (3): 655–720.CrossRefGoogle Scholar
  19. Movement for Quality Government in Israel and Others; Academic Center for Law and Business and Others; MK Zehava Galon and Others; Israel Labor Party and Others vs. Prime Minister of Israel and Others; Government of Israel and Others; Acting Minister of the Economy and Others. 2016. High Court of Justice, 4374/15, 7588/15, 8747/15, 262/16 (in Hebrew).Google Scholar
  20. Munnell, Alicia H. 1990. Why Has Productivity Growth Declined? Productivity and Public Investment. New England Economic Review (January–February): 3–22. Google Scholar
  21. Nitzan, Jonathan, and Shimshon Bichler. 2002. The Global Political Economy of Israel. London: Pluto Press.Google Scholar
  22. OECD. 2005. Corporate Governance of State-Owned Enterprises: A Survey of OECD Countries. France: OECD Publishing. https://books.google.co.il/books?id=YYfVAgAAQBAJ&printsec=frontcover&hl=iw&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false.
  23. OECD. 2015. Corporate Governance of State-Owned Enterprises. Paris: OECD Publishing. http://www.bicg.eu/wp-content/uploads/2017/07/OECD-2015.pdf.
  24. O’Mahoney, Amy, and Eleanor Denny. 2013. Electricity Prices and Generator Behaviour in Gross Pool Electricity Markets. Energy Policy 63 (C): 628–637.CrossRefGoogle Scholar
  25. Peleg, Eyal. 2005. Privatization as Publicization. Tel Aviv: Tel Aviv University Press (in Hebrew).Google Scholar
  26. Peretz, Gad. 2016. Netanyahu in Dramatic Decision: Structural Division of Bezeq Canceled. Globes, March 9 (in Hebrew). http://www.globes.co.il/news/article.aspx?did=1001109014.
  27. Prosser, Tony. 2000. Public Service Law: Privatization’s Unexpected Offspring. Law and Contemporary Problems 63 (4): 63–82.CrossRefGoogle Scholar
  28. Roosevelt, Franklin D. 1933. Message to Congress Suggesting the Tennessee Valley Authority, April 10. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14614.
  29. Savas, Emanuel S. 1987. Privatization: The Key to Better Government. Chatham, NJ: Chatham House. Google Scholar
  30. Savas, Emanuel S. 2000. Privatization and Public-Private Partnerships. Chatham, NJ: Chatham House. Google Scholar
  31. Savas, Emanuel S. 2005. Privatization in the City: Successes, Failures, Lessons. Washington, DC: CQ Press.Google Scholar
  32. Sandel, Michael J. 2012. What Money Can’t Buy: The Moral Limits of Markets. New York: Farrar, Straus and Giroux.Google Scholar
  33. Sharkansky, Ira. 1979. Wither the State. Chatham, NJ: Chatham House.Google Scholar
  34. State Comptroller. 2012. Annual Report of the State Comptroller 2012, no. 63a. Jerusalem: State Comptroller’s Office (in Hebrew). http://www.mevaker.gov.il/he/Reports/Pages/115.aspx?AspxAutoDetectCookieSupport=1#.
  35. Tevet, Eyal. 2015. Reforms and Regulation in Government Companies in Israel: Infrastructure Sectors. In Privatization Policy in Israel: State Responsibility and the Boundaries Between the Public and the Private, ed. Itzhak Galnoor, Amir Paz-Fuchs, and Nomika Zion. Tel Aviv: Van Leer Institute and Hakibbutz Hameuchad (in Hebrew).Google Scholar
  36. Tishler, Asher, Jacob Newman, Itzik Spekterman, and Chi-Keung Woo. 2006. Cost–benefit Analysis of Reforming Israel’s Electricity Industry. Energy Policy 34 (16): 2442–2454.CrossRefGoogle Scholar
  37. Vickers, John, and George K. Yarrow. 1988. Privatization: An Economic Analysis, vol. 18. Cambridge, MA: MIT Press.Google Scholar
  38. Yelizarov v. Israel Electric Corporation Ltd. 2014. Civil Case (Haifa) 19120-03-14, July 13 (in Hebrew).Google Scholar
  39. Ziv, Amitay. 2016. Recovery Program Approved for Fiber Optics Company IBC. The Marker, January 7. http://www.themarker.com/technation/1.2817214 (in Hebrew).

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Eyal Tevet
    • 1
  1. 1.Van-Leer Jerusalem InstituteJerusalemIsrael

Personalised recommendations