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• Basic Statistics of Israel, 2014
• Glossary
• Executive summary
• Assessment and recommendations
• Progress in structural reform

  This Annex reviews the measures taken in response to the recommendations from previous Economic Surveys. The recommendations that are new to the present Economic Survey are contained in the corresponding chapters.

• Quantification of the impact of product market reforms in Israel

  A competitive product market environment that allows new firms to challenge incumbents, efficient firms to grow and inefficient ones to exit helps improve the allocation of resources and boost economic growth and living standards. A key policy ingredient for a growth-enhancing competition environment is for product market regulation to be set in a business-friendly way. Empirical studies have shown that greater competition and better regulation can raise overall output per capita by increasing investment and by encouraging companies to be more innovative and efficient, thereby lifting productivity (e.g. Conway et al., 2006; Bourlès et al., 2013).

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• Expand / Collapse Hide / Show all Abstracts Thematic chapters

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  • Boosting competition on Israeli markets

    Promoting competition to enhance productivity at the firm level and resulting income and growth improvement and a lower cost of living is an important economic and social challenge in Israel. Consistent evidence shows multiple deficiencies leading to a dual functioning of the economy between exposed and sheltered sectors. Product markets are hampered by regulations that are far from best practice. Because of its geographical and geopolitical situation, Israel is less open to foreign trade than other small OECD countries. Moreover, its product markets feature monopolies in many sectors. Addressing these issues have been high on the policy agenda since the 2011 tent protests, and the authorities have adopted or launched reforms in many domains since then. However, further increases in foreign trade exposure by lowering non-tariff barriers, making regulation more competition-friendly in network industries, especially electricity, and reducing the oligopolistic structure of the food and banking sectors would still have considerable economic payoffs.

  • Improving the pension system and the welfare of retirees in Israel

    Israel is a young country with still dynamic population growth, but it is already beginning to face the consequences of population ageing. The pension system relies largely on mandatory private retirement saving, which will moderate the long-term fiscal impact. Yet, there are questions about the fairness of the pension system, given the regressive nature of some of its tax provisions, its ability to effectively protect the most vulnerable elderly, whose poverty rate is high, as is the case for the rest of the population, and its efficiency in securing and valuing these retirement savings to guarantee pension adequacy. This review examines ways forward for policy to address these issues by reinforcing the protective role of basic pensions, by encouraging people to work longer and by improving the fairness and effectiveness of the system’s second pillar.

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