Mid-term evaluation of Operation Independence, Inc.

OI is believed to be most effective at networking and the holding of conferences and seminars. It has conducted successful major conferences in the areas of capital markets, budgetary reform, and reform of business management schools. Research papers are generally of high quality, although questions have been raised as to their relevance. There is some feeling that more attention should be paid to the translation of existing documents and their distribution to a wider audience than to the production of new ones. OI's contribution to economic reform has been notable in the areas of the business schools, which have adopted more practically oriented curricula, and taxation, where OI assistance has led to the introduction of reform legislation. Some progress has also been made in housing, despite a major setback to reform caused by the upsurge in immigration from the former Soviet Union, and ensuing reversion to a control-oriented policy course by the government. Knesset education appears to be going well. However, the team could identify little else as having occurred in the general area of "changing economic perceptions." For the most part, economic education has been confined to opinion leaders. Problems with OI follow-up were noted in two of the above areas. The problems had to do with a long overdue paper (housing); a committee formed but not activated (business schools); and a long delayed start on the production of case studies at the business schools. In the important area of privatization, OI influence has been confined to informal approaches and sponsorship of a major conference dealing with the subject. Otherwise, although OI workplans have contained numerous proposals for undertakings in the area, and at least some work has been started (i.e., a paper more than two years in the making), nothing in this category has actually been produced. Israelis with whom the team talked generally felt that it would require the full weight of public opinion to move the government on privatization. A few felt that privatization could not properly be considered apart from the broader problem of cartelization of the Israeli economy. Two other OI activities, with which A.I.D. expressed disapproval, were shifted from A.I.D. to non-A.I.D. funding; namely, business networking in the U.S. and a study of the Israeli software industry. The latter became a particular point of contention in the wake of the Lautenberg Amendment (Section 599 of the FY 1993 Foreign Appropriations Act), which prohibits the obligation of funding approved in 1993 for activities that could result in the loss of U.S. jobs. A.I.D. counsel expressed the view that the software study could be construed as being in conflict with at least the spirit of Section 599. A.I.D. also felt that the recommendation embodied in the software paper for formation of an advisory board with government representation to promote the industry, ran counter to the free market philosophy underlying OI. The team was impressed with the quality of the principal OI subgrantees - the Israeli Democracy Institute (IDI), the Israeli Center For Social and Economic Progress (ICSEP), and Dr. Steven Plaut of the University of Haifa. (Author abstract)