The United States of Sanctions
The Use and Abuse of Economic Coercion
Until the recent formation of a new coalition government, Israel’s political system—and with it the entire country—had spent the past two years in a state of paralysis. Four inconclusive elections and repeated failures to form stable governments had left senior cabinet posts and civil service positions unfilled, put long-term policy planning on hold, and left Israel without an approved budget in the midst of one of the worst health and economic crises in its 73-year history. Most alarming, May’s explosive escalation in Israel’s long-simmering conflict with Hamas was managed by an interim government headed by a caretaker prime minister.
While the unprecedented spectacle of Israel’s powerful, long-serving prime minister, Benjamin Netanyahu, on trial for corruption undoubtedly exacerbated the turmoil, the root causes of the crisis include deepening social divisions that have helped to expose the inadequacies of Israel’s constitutional structure. Despite Netanyahu’s ouster (he and his family finally vacated the Israeli prime minister's official residence on July 11, nearly a month after the new government was formed), most of these issues remain unresolved, and all will require difficult but necessary structural reforms. Making these reforms must be the top priority for Israel’s new leaders.
This will not be easy. The government headed by Prime Minister Naftali Bennett and his coalition partner, Foreign Minister Yair Lapid (who is set to become prime minister in 2023), faces an unprecedented situation: a former prime minister (now leader of the opposition) on trial for corruption charges who, instead of stepping down to clear his name in court, was bent on clinging to power at any cost in order to wage war on the justice system from the most powerful perch in the land. The Netanyahu factor has so polarized Israeli politics that in the most recent election the traditional right-center-left divide gave way to a realignment of candidates into “pro-Bibi” and “anti-Bibi” camps. In this strange new landscape, right-wing stalwarts such as Avigdor Lieberman and Gideon Saar joined forces with the left-wing Israeli Labor Party and Meretz to remove Netanyahu from office. For several bewildering weeks, Ra'am—an Islamist party with ties to the Muslim Brotherhood—seemed to offer the Netanyahu bloc its best hope of forming a coalition, before ultimately agreeing to join the Bennett-Lapid government.
A shared disdain for Netanyahu was the proximate cause for these alliances of convenience. But deeper divisions remain over the fundamental question of Israel’s identity, and it will be extremely challenging for the new government to heal those rifts. In the meantime, however, there are steps it can take that would return some stability to Israeli governance and build public trust. Under Netanyahu, there was no hope of addressing the foundational issues of Israeli politics; his political survival depended on division and polarization. And, in truth, it remains unclear whether any government can foster the kind of unity the country desperately needs. This one, at least, has a chance to start trying.
As scholars such as Micah Goodman have noted, the sources of political division in Israel have shifted over the decades. In the years immediately after Israel gained independence in 1948, most disagreements were over socioeconomic issues. After the 1967 Six-Day War, political discourse evolved into an ideological debate over settlements and the future of the West Bank. Then, in the early years of this century, after the failure of the Camp David accords to produce a final peace agreement triggered a bloody uprising, Israeli Prime Minister Ariel Sharon chose to withdraw all Israeli settlers from the Gaza Strip while using the full might of the Israel Defense Forces and construction of a security barrier to reduce Palestinian terror attacks. Those steps had the effect of driving the Palestinian issue into the background.
In 2005, when Sharon left Likud to create a new party called Kadima, he shattered the traditional left-right divide and uncovered a vast new Israeli center, which included a wide range of Israelis who, despite their other disagreements, agreed that divorce from the Palestinians was necessary but were uncomfortable with what they saw as the right’s overly expansive “Greater Israel” project and the left’s utopian idealism. Netanyahu himself reflected these sentiments in the makeup of his earlier governments. From 2009 to 2015, Netanyahu’s coalitions always included centrist elements such as Ehud Barak’s Labor Party, Tzipi Livni’s Hatnua party, and Yair Lapid’s Yesh Atid party—the rising force of the Israeli center.
In recent years, notwithstanding occasional flare-ups of violence with the Hamas regime in Gaza, Israelis have placed the Palestinian issue on the back burner. To a degree that might surprise international observers, Israel’s internal debate has increasingly focused on the country’s character and identity. How much emphasis should be placed on the nation’s Jewishness relative to its status as a democracy, and who gets to decide? Should laws passed by a simple majority in the Israeli Knesset be the final say on all matters, or should an independent judiciary determine whether these laws contradict Israel’s Declaration of Independence and the nascent constitution (currently embodied in a series of “Basic Laws”)? To what degree should traditional Jewish law continue to inform Israel’s contemporary legal system and thus impact Israelis’ lives and personal liberties?
In recent years, Israelis have placed the Palestinian issue on the back burner.
The debate over these questions is fueled by Israel’s changing demographics. At one extreme stands Israel’s rapidly growing ultra-Orthodox sector, with its fundamentalist religious outlook and illiberal views on democracy. At the other end are Israel’s Arab citizens, who feel a kinship with their Palestinian neighbors and feel marginalized by a series of laws—most significantly the 2018 Nation-State Law that could be read as demoting the status of their Israeli citizenship. This sector, which makes up almost 20 percent of the population and recently engaged in both peaceful protests and violent riots in reaction to the fighting in Gaza, has a lukewarm attitude at best toward the notion of a “Jewish state.” Nevertheless, its members demand full equality.
Recognizing the changing nature of Israel’s demographics, outgoing Israeli President Reuven Rivlin has described its society as one divided among four “tribes”: secular, national-religious, ultra-Orthodox (Haredi), and Arab. In reality, these divisions can be simplified, dividing the country into two camps almost equal in number: those who see Israel first and foremost as a democratic country possessing unique characteristics as the world’s only Jewish nation-state and those who seek Jewish sovereignty, a form of majority rule with little concern for minority and civic rights.
To bridge this vast gulf and put Israel back on a path to economic prosperity and democratic vitality, the new government must take a number of bold steps. First, it must pass a law requiring any prime minister under indictment to step down or face suspension for the duration of the case. Although Israel’s Supreme Court rulings have decided that, once indicted, cabinet ministers must step down from their posts, the current law allows a prime minister to remain in office until all appeals are exhausted. As Israelis have witnessed, this is an untenable situation. A prime minister under indictment faces inherent conflicts of interest, especially when it comes to law enforcement. Even if some magical arrangement could resolve those conflicts, the sheer logistical hurdles of running the country while standing trial are insurmountable. This is why past prime ministers who found themselves the targets of serious police investigations, such as Yitzhak Rabin and Ehud Olmert, resigned even before indictments were handed down.
Israel also desperately needs electoral reform. There are a number of proposals on the table, including one I developed with my colleagues at the Israel Democracy Institute. Our plan would create unambiguous electoral outcomes by making the head of the largest party prime minister, automatically, as soon as the election results were in. This would eliminate political blackmail on the part of small sectoral parties and help engineer the reemergence of large, moderate aggregate parties more reflective of the broader public interest. Other reforms are needed as well, including the introduction of a regional component to Israel’s single-district system, in which currently all 120 parliament members are elected on national slates that offer no direct representation for local constituencies.
Israel must also define the rules that govern relations between the three branches of government. From an American vantage point, Israel has an extremely weak system of checks and balances: it is a unicameral parliamentary democracy with no constitution and no federal distribution of power, in which the executive and legislative branches are intertwined. Absent a constitution, Israel’s Basic Laws serve as a quasi-constitutional framework that enshrines both the workings of the Israeli political system and the freedoms citizens enjoy. These Basic Laws, along with previous court precedents, serve as the basis for Israel’s Supreme Court to practice judicial review over legislation passed by the Knesset and other government decisions. But they leave some glaring gaps, and many can and have been overturned with a simple majority—heaping fuel on the fire of the culture wars by incentivizing a temporary majority to tinker with the very foundations of the state.
To change this, the Knesset must pass a number of new Basic Laws, starting with one that redefines constitutional legislation and the relationship between the Knesset and the Supreme Court. Passing a Basic Law on legislation that would define the status of Basic Laws and the conditions for judicial intervention would mitigate the raging debate between the parliament and the judiciary, which has become a microcosm for all political disagreements in Israel and has turned the Supreme Court into a political football. Eventually, it will be necessary to go beyond defining the rules of the game and resume the long-delayed project of crafting a comprehensive constitution for the State of Israel, including a Bill of Rights.
How likely is it that all of this will come to pass in the near future? As long as Netanyahu remained in charge, it was inconceivable. But the Bennett-Lapid “change coalition” might try to live up to the aspiration implied by its name. To be sure, the extreme clashes of personalities and ideologies that must be contained in this government—which includes many smaller parties from across the ideological spectrum—bode ill for major progress on constitutional reforms. But smaller steps—for example, on electoral reform—may still be possible and are arguably necessary.
Ideological debate is a crucial component of democratic culture, and even sweeping structural reforms would not rid the country of internal divisions. But the stalemate of the past two years has intensified Israel’s identity crisis and thwarted discussion of ways to address it in a responsible manner. Under better management, and armed with a few crucial reforms, Israelis can overcome their divisions and forge ahead with the process of state building at home while playing an increasingly significant role in the region. As the founders of modern Israel wrote in the country’s Declaration of Independence 73 years ago: “[The State] will foster the development of the country for the benefit of all its inhabitants; it will be based on freedom, justice and peace as envisaged by the prophets of Israel.” It is high time that Israel’s political leaders set aside their differences and get on with that task.