Centralization, neoliberalism, and housing policy central–local government relations and residential development in Israel

Abstract

In recent decades, many countries have experienced decentralization and neoliberal processes. The literature usually refers to decentralization as an outcome of growing neoliberalism, but are these two processes analytically connected? This study answers the question by examining the relationship between central and local government in Israel in the context of housing policy. It focuses on a housing policy called Heskem Gag (“umbrella agreement”), an agreement between the government and local authorities to rapidly increase the supply of housing units. Whereas Heskem Gag might seem an act of decentralization, in-depth analysis paints a mixed picture: although some terms of the agreement promote fiscal and administrative autonomy, others curb it and have a strong centralizing effect. The study discusses the possibility of a hybrid model of neoliberal centralism, and its problematic ramifications for the interests of local residents, especially the disadvantaged. Although the findings are based on the Israeli case, they are relevant to many countries with a neoliberal economy that have undergone decentralization in recent decades, especially at times of national crises.