Israel’s new Governance Law has been dubbed “the most dramatic electoral reform in decades” by the Times of Israel‘s political correspondent, Haviv Rettig Gur. This is unjustified hyperbole: the law is significant, but not on the same level as the introduction in 1992 of direct elections for the premiership – and its repeal in 2001, condemned as “the most incredibly stupid electoral system ever designed” for its widespread, unintended side-effects.

The recent bill comprised five main reforms:

  1. The electoral threshold is rising from 2% to 3.25%;
  2. Votes of no confidence will require the opposition to present an alternative government commanding a Knesset majority: it will no longer be possible to bring the government down and provoke fresh elections once the prime minister has lost his own majority;
  3. The cabinet is limited to 19 ministers and four deputy ministers; the post of ‘minister without portfolio’ is to be abolished;
  4. Faction-splintering is discouraged by requiring a splinter-faction from a unitary party to have at least two MKs to qualify for public campaign funding;
  5. Budget: if the Knesset fails to pass a budget, the previous budget is automatically extended on a month-by-month basis.

The no-confidence provision has the potential to be destabilising: if a government is approved by a narrow majority at the start of its term, and the junior coalition partners walk out, Israel would have a minority government struggling to pass legislation. But only one government has ever been brought down by a no-confidence vote in Israeli history (Yitzchak Shamir’s in 1990); and a government could still be brought down if the dissolution of a coalition rendered the process of governance impossible, and fresh elections desirable for all parties. The state budget reform disempowers the Knesset by enabling the executive to continue governance without asking the legislature for funds. The faction-splintering provision is hardly a game changer, given the very low bar of two MKs. And the shrinkage of the cabinet is a modest reform, which should streamline the executive but does not change anything fundamental about the Israeli constitutional order.

Most public attention, therefore, has focused on the increase in the electoral threshold, which has the potential to reshape Israel’s party system. The basic idea is that smaller parties will be forced to merge with larger parties (or with each other) in order to survive. Last year, I wrote that the reform, if successful, would have cosmetic effects: it might reduce the number of parties, but the polarisation within the Knesset would remain the same. And if parties failed to merge, Israel would face the nightmare scenario of having no Arab representation at all – hardly healthy for a pluralist, multicultural democracy. 

The Governance Law, however, has nothing on the game-changing reform of the 1990s. Back then, voters were given two ballots: one for the Knesset, and one for prime minister. The purpose of the reform was two-fold: to weaken the bargaining power of small parties during coalition-building negotiations, by having the public determine the identity of the prime minister; and to embolden the two main parties (Likud and Labour) by focusing campaign coverage on the prime ministerial candidates, at the expense of airtime for legislative parties.

The law backfired horribly. The public took the opportunity to engage in split-ticket voting, casting their ballot for prime minister on security policy and for the Knesset on domestic policy. Consequently, fragmentation increased and the vote share of the two main parties plummeted, giving them fewer than half of the Knesset’s seat share (together) for the first time in history. The system was repealed in 2001: this produced dramatic volatility (27%), in favour of the two largest parties, which jumped from 47 to 57 seats together; the number of parties fell, and the ‘effective number of parties’ (a political science measure that weights the number of parties against their size) fell dramatically, from a peak of 8.7 to 6.2. The system did not quite return to normal, but the worst excesses were tamed.

Compare that to the likely effects of the modest increase in the new threshold. If the 2013 election were re-run with the 3.25% threshold, and people voted the same way as they did under the 2% threshold, the seat distribution would be as follows: Likud-Beiteinu 34 (+3), Yesh Atid 20 (+1), Labour 16 (+1), Jewish Home 13 (+1), Shas 12 (+1), UTJ 7, Hatnua 7 (+1), Meretz 6, UAL 5 (+1). Hadash, Balad and Kadima would fall below the threshold. 14.8% of votes would have been wasted. Electoral volatility would be a mere 7.5%.

The raising of the threshold, however, should be expected to influence party behaviour, encouraging strategic behaviour to skirt the electoral threshold: Balad and the UAL might unite (but Hadash would be left out); Otzma LeYisrael might come back into the Jewish Home; Am Shalem might return to Shas (unlikely!) and Kadima could fold back into the Likud. Assume further that these unions do not influence people’s voting decisions, so if someone voted for one party, they could be expected to vote for the merger. The seat share would be: Likud-Beiteinu 33 (+2), Yesh Atid 19, Labour 15, Jewish Home 14 (+2), Shas 13 (+2), UAL-Balad 8 (+1), UTJ 6 (-1), Hatnua 6, Meretz 6. Electoral volatility, as one can see, would be marginal.

The Governance Law might force parties to unite: but the unification effect will not be as dramatic as the fragmentation effect encouraged by the last electoral reform, which encouraged people to vote for small parties. So the reforms will play a significant role in the next election campaign, but as they say, lo tzarich lehagzim (“no need to exaggerate”): Israel has weathered more dramatic electoral reform before.