Traffic congestion is a major problem in Israel. Costs of congestion are estimated at around 2% of GDP, above levels in other high-income economies. The availability of public transport is being increased to tackle the problem. However, it will take time to reap the full benefits of these investments. To provide a near term solution, an Inter-Ministerial Technical Committee is exploring the introduction of congestion charges. This report provides insights into the effectiveness of congestion charging systems and identify options that Israel could consider for the design and implementation of an effective congestion charging system. The report is the result of the work of an interdisciplinary OECD team bringing together the Centre for Tax Policy and Administration, the Economics Department, the Environment Directorate, the International Transport Forum and the Public Governance Directorate.
Israel’s economy continues to register remarkable macroeconomic and fiscal performance. Growth is strong and unemployment low and falling. With low interest rates and price stability, financial policy is prudent, and public debt is comparatively low and declining. The external position is solid, thanks to a dynamic high-tech sector. The average standard of living is improving, mainly due to higher employment rates. Continued accommodative macro policies and planned investments in the offshore gas fields in the coming years will spur further growth. Against this backdrop, Israelis remain on average more satisfied with their lives than residents of most other OECD countries.