Executive Summary

1. Achieving a development leap in Quality of Life in Israel depends on Israel's ability to compete for Human Capital and investments in the global marketplace.

2. Effectively improving national competitiveness through policies is grounded in comparing Israel to a reference group of competing countries.

3. Indices that enable international comparison are useful tools for decision makers to identify challenges and estimate policy successes.

4. This paper demonstrates the usefulness of the Freedom of the World Index in examining three aspects of Quality of Life: political and civil rights, social cohesion, and trust in the political system.

5. Decision makers can identify issues that require government action/attention by analyzing Israel's challenges and opportunities in light of existing government policies.

Using Comparative Indices to Examine Quality of Life

Different indices can assist strategic policy making in:

• Policy design and planning - Indices provide reliable and relevant information.¹
  
  
• Estimating policy success - Indices measure the results of policy intervention.

In order for an index to be useful to Israel's decision makers, it should include components that are relevant to Quality of Life and allow for comparison of Israel's performance over time and relative to competing countries.

The importance of analyzing various levels of an index - A country's overall rank provides limited information. Index analysis using different resolutions - variables, clusters of variables², and pillars - allows for a better depth of understanding of the issues facing a given country.

Identifying issues that require government action - Decision makers can identify unaddressed issues that require attention by analyzing challenges in light of present policies.

The Usefulness of The Freedom of the World Index in examining Quality of Life

Quality of Life is a subjective term determined by various components. Nevertheless, Reut Institute has identified three major aspects of Quality of Life in Israel: economic well-being, social well-being, and personal and physical well-being.³

The Freedom of the World Index (FWI) published by Freedom House⁴ examines social well-being.⁵ Social well-being reflects the desire and ability of an individual to identify with his community and to play an active role in it.

Considerations in determining a relevant reference group:

Countries similar to Israel - A reliable and comparative analysis requires identifying countries which are similar to Israel in factors that affect civil liberties and political rights:

• Countries recently addressing corruption - Countries that are currently building enforcement and legislation infrastructure can be a relevant reference group for Israel. One would expect that the scope and sophistication of the fight against corruption in these countries should be similar. For example, Eastern European countries are experiencing a process similar to that of Israel: shifting from an economy with socialistic characteristics to capitalistic ones. This process has an influence on the conduct of the public sector and the level of corruption.⁶
  
  A rise in the number of corruption scandals in countries that recently began to enforce laws against corruption does not necessarily mean that there is a rise in underlying corruption rates, but perhaps only in the awareness of its presence.
  
  
• The structure of government - Countries with a similar governmental structure and electoral system.
  
  
• Social Tension - Israeli society is heterogeneous with many dividing conflicts - in aspects of nationality⁷, religion, ethnicity, political ideology and socio-economic status.
  
  
• The geopolitical situation - Israel, like Taiwan, is a small country with hostile neighbors and unstable National Security. In such countries there is tension between National Security and the preservation of freedom of expression and civil rights.

Leading countries - Israel should compare itself to leading countries in all aspects of Quality of Life. In analyzing the FWI, one should choose the highest scoring countries that are relevant to Israel.⁸

Structure of the Index - The FWI is comprised of two main sub-indices: Political Rights (made up of three pillars) and Civil Liberties (made up of four pillars). One can analyze the strengths and weaknesses of a given country based on the score of each of the sub-indices and pillars.⁹ Freedom House also publishes a detailed annual report examining the unique characteristics of each country.

The connection between the FWI and Quality of Life:

• Two of the pillars of the FWI examine trust in the political system and rule and enforcement of law: 'Electoral Process' and 'Functioning of Government'.
  
  
• The remaining five pillars examine the level of protection of political and civil rights and the level of social cohesion: 'Political Pluralism and Participation', 'Freedom of Expression and Belief', 'Associational and Organizational Rights', 'Rule of Law', and 'Personal Autonomy and Individual Rights'.
  

Index Limitations:

While Freedom House published the score of each pillar, it does not release the score of each of the variables that comprise the pillars.

Identifying Challenges and Opportunities

Identifying challenges and opportunities in improving Israel's Quality of Life can be done by analyzing an index on various levels: overall rank, sub-indices, pillars.

Overall Rank - According to the 2007 report Israel is classified as a "Free" country, as it has been classified since 1973.¹⁰

Rank in Sub-Indices - The total number of points awarded to the political rights and civil liberties checklists determines the ratings. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom corresponds to a range of total points. In the 2007 report, Israel received a score of 1 in political rights and 2 in civil liberties.¹¹ Since 1994 Israel has received a score of 1 in political rights but her score in civil liberties has been more volatile.¹²

Pillar rankings - Israel received the following scores on political rights pillars: Electoral Process (12/12), Political Pluralism and Participation (15/16), and Functioning of Government (10/12). Israel received the following scores on civil liberties: Freedom of Expression and Belief (14/16), Associational and Organizational Rights (12/12), Rule of Law (10/16), and Personal Autonomy and Individual Rights (11/16).¹³

The Freedom House Annual Report highlighted the followings areas as positive in Israel: the right to assemble and protest, free elections and multiplicity of parties, equal rights for minorities, initiatives to fight corruption, freedom of religion, freedom of press, worldwide education, right to unite, frequency of unions protecting workers rights, and independence of the judicial system.

Despite the overall high score Israel received in the two sub-indices, Freedom House identified the following limitations on the freedom and rights of Israeli citizens:

• Representation - Parties and representatives are obligated to support Israel's right to exist and the democratic system.
  
  
• Women's rights - Arab women and religious Jewish women face some societal pressures and traditions that negatively affect their freedoms. Furthermore, the FWI sites a developing problem in the trafficking of women for prostitution.
  
  
• Corruption - There has been a wave of recent scandals among Israeli politicians.
  
  
• Equal allocation of resources - Muslim and Christian communities occasionally accuse the government of discrimination in resource allocation and upkeep of religious sites, though the official budget allocates funds according to need, regardless of faith or denomination.
  
  
• Freedom of religion - Though eroding slightly, the orthodox religious sector has a monopoly over Jewish religious affairs.
  
  
• Freedom of the press - Matters of national security are subject to a military censor.
  
  
• Exploitation of workers - Israel has many illegal foreign workers who are afforded few rights.
  

The following example reveals the possible use of the FWI in identifying challenges, focusing on freedom of religion:

• The high score in the political rights sub-index indicates that the rights and freedoms of individuals in Israel are positive compared to other countries.¹⁴
• Israel received a score of 14 out of 16 in the 'Freedom of Expression and Belief' pillar, indicating that there is room to improve the religious freedom and rights of citizens.
  
  
• The 2007 Freedom of the World Report details that the national budget allocates resources to all religious parties. Despite that, the Christian and Muslim communities still cite a lack of equality, for example the allocation of resources to the preservation of sacred places.
  

Estimating Policy Success

One can assess policy success in the area of freedom and rights by analyzing trends in Israel's historic scores and The Annual Freedom Report.

The following is an example of how to use the FWI to evaluate policy success in the context of equal opportunities for minorities:

• Israel improved in the civil liberties sub-index. In 2003 Israel's score was 43 out of 60 and in 2007, the score rose to 47.
  
  
• The 2007 FWI Report indicates that there has been an improvement in the educational, housing, infrastructural and welfare opportunities available to Arab Israelis. Nevertheless, the issue remains problematic and the report cites room for improvement.¹⁵
  

Identifying Issues That Require Action

Challenges facing Quality of Life improvement should be reviewed in relation to current policy in these areas.¹⁶

Mapping current policies in light of the challenges raised by the index facilitates identifying issues that need yet to be addressed by policy.

¹ Indices can be used to create a common vocabulary within the political system and the public sphere. See Reut Institute papers: Competitiveness Indices - Tools for Policy Design; Seven Indices for Measuring Quality of Life.

² A cluster is a group of variables with a common theme. Variables are chosen from one or more pillars.

³ See: Reut Institute paper: "Quality of Life".

⁴ The FWI reports on 193 countries and 15 disputed territories, including the Palestinian Authority. See: Reut Institute paper: Seven Indices for Measuring Quality of Life.

⁵ There are other comparative indices dealing with social well-being, but as opposed to the FWI, their analysis is one-dimensional. Transparency International publishes two indices that deal with corruption. The CPI analyzes the public's opinion of corruption in the government. The BPI examines the level of bribery of government officials. The Economist Democracy Index analyzes electoral democracy and political freedom.

⁶ See J. B. Rosser, Jr. and M. V. Rosser, Comparative Economics in a Transforming World Economy, 2nd Ed. The MIT Press, Cambridge, MA, 2004, p.262.

⁷ Israel is a Jewish State with minority citizens who do not necessarily identify with the Israeli national vision. This affects social cohesion.

⁸ In the 2007 report 50 countries reached the maximum score of "1" in the two sub-indices. We can identify the countries within this list that have common ground with Israel, for example: Finland, Iceland, Liechtenstein, Luxembourg, Norway, Sweden, Canada, Holland, Switzerland, Denmark, Italy, Chile, Ireland, Portugal, and New Zealand.

⁹ The total possible score summing all pillars is 100: 40 points for Political Rights (based on 10 questions) and 60 points for Civil Liberties (based on 15 questions).

¹⁰ Although Freedom House does not do so, countries can be ranked by summing the score each country received along all seven pillars. Using this method Israel is ranked 62nd out of 193 countries.

¹¹ Countries that received a similar score are: Greece, Japan, South Korea, Bulgaria, South Africa and Ghana.

¹² In the civil liberties sub-index Israel has received the following scores: 2 in 1992, 3 from 1993-1998, 2 in 1999, 3 from 2000-2004, and 2 since 2005 - marking a recent improvement.

¹³ The data in brackets are Israel's scores out of the maximum score.

¹⁴ Israel is an electoral democracy. Although there is no formal constitution, a series of basic laws have the force of constitutional principles. These laws and Israel's Declaration of Independence promise freedom of religion. The Christian, Muslim and other committees are given autonomy in religious practices such as marriage, burial and divorce.

¹⁵ This relates to several recent initiatives, among them: Ariel Sharon announced in 2004 that every governmental body must have representation of at least one Israeli Arab on its board of directors. In addition there is a rise in Arab representation in the Supreme Court and in the Knesset.

¹⁶ Current policies of the Government of Israel are already addressing specific areas of Quality of Life. The Orr committee that examined the condition of the Arab Israeli minority after the 2000 riots serves as an example.