Economy and Community

State Responsibility a​nd the Limits of Privatization

The third session of the Bimat Mandel (Mandel Platform) series on the subject of social justice ad​dressed the issue of state responsibility and the limits of privatization

Professor (Emeritus) Yitzhak Galnoor, a Senior Fellow at the Van-Leer Institute, former Civil Service commissioner, and head of the public administration sub-unit of the expert panel on the social protest, presented the topic and answered questions. Dr. Varda Shiffer, President of Mandel Foundation-Israel, moderated the discussion. 

“The civil service in Israel has not changed in any real way over the years, nor have there ever been any systematic reforms in this area,” asserts Prof. Galnoor. He adds that the impact of the policy of scaling down the civil service and reducing the government’s responsibility in the social and economic fields has not been examined—neither on the specific or the general levels.

Since the mid-1980s, a significant reform has b​​een pursued consistently—what is called the policy of privatization. It is accompanied by the notion that economic criteria are the sole consideration behind this move. But is privatization always economically efficient? Galnoor cites several examples where economic efficiency was not necessarily an element but the privatization reform was carried out anyway. ​While no one is opposed to economic efficiency per se, he says, the problem arises when it is always perceived as correct or even as a value in its own right, to the exclusion of other rationales.

Prof. Galnoor suggests several solutions based on the committees set up last summer, in response to the social protests. The burden of proof concerning the need for privatization should always be on those lobbying for the c​hange, and so too for nationalization. Those who want to make the change should have to prove that their proposal will improve the current situation. The government must decide which public product requires privatization and carry out the process with full transparency and in conjunction with a detailed economic opinion prepared by the relevant ministry—and not by the Finance Ministry.

Galnoor reminds us that privatization harms workers . His bottom line is that “we shouldn’t automatically assume that privatization is a good thing.”




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