The rise and fall (?) of public-private partnerships in Israel’s local government

Abstract

Municipal-private partnerships (MPP), including BOT concessions, joint municipal-private corporations, and leveraging municipally owned land to promote private investment, have become major tools of urban development, but the 2008 global crisis seemed to have changed attitudes towards their application. Based on documents and open-ended interviews, our study examines the apparent retreat from MPP in Israel. Results show that BOT lost appeal in the 2010s, particularly among fiscally sound cities and water and sewage municipal corporations, not because of an ideological rejection, but largely due to low interest rates that eliminated its financial motivation. Regulatory hurdles also played a role in luring municipalities away from MPP in the centralised Israeli context. However, BOT remains in the municipal development toolbox and the study points at 'maturation', moving away from the financial motive to the capacity motive, mainly in fields out of municipal core tasks and in projects sufficiently isolated from external uncertainties.

In search of social equity in entrepreneurialism: The case of Israel’s municipal regeneration agencies

“…Municipalities also alter market mechanisms, such as contractual agreements, to create alternative paths of accountability and control to those relinquished in entrepreneurial relations (Tasan-Kok et al, 2019). In addition, municipalities leverage their material assets such as public land (Van Loon et al, 2019) and intangible assets such as professional capacities (Razin et al, 2020). Political, economic, and professional capacities affect municipalities’ experiments with non-market entrepreneurial practices.…”

“…Compared with the core municipal organization, corporations have greater flexibility in entrepreneurial actions and are commonly used in Israel to manage the development and management of municipal infrastructure (Jakar et al, 2018; Razin et al, 2020). Therefore, their institutional setting was suitable for municipal intervention in property relations.…”