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.

KEYWORDS:

• Public-private partnerships
• BOT
• local government
• remunicipalization
• Israel

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

Based on a study supported by the Israeli Lottery, Federation of Local Authorities in Israel and the Federation of Regional Councils in Israel.

Notes on contributors

Eran Razin

Eran Razin is a professor of geography and urban and regional studies at the Hebrew University of Jerusalem, Israel, and holds the Leon Safdie Chair in Urban Studies. He specialises in comparative local government, urban planning and development and has published/coedited eight books and numerous journal articles in these fields.

Anna Hazan

Anna Hazan lectures at the Division of Public Administration and Policy, School of Political Sciences, University of Haifa, and at the Department of Public Administration and Policy, Sapir College, Israel. She specialises in regulation and development of the local government system.

Osnat Elron

Osnat Elron is an architect (Tel Aviv University) and a graduate of Public Policy and Urban Planning at the Hebrew University of Jerusalem. She is the town architect of Gedera Local Council.