The results of the last three election campaigns in Israel’s local authorities are analyzed,to find whether the fiscal performance of local authority heads affected their reelection probability.We find that in the 1989 and 1993 campaigns fiscal performance did not affect voter preferences. However,in the 1998 campaign financial performance is found to be a good predictor of local authority head reelection. Changes in the political environment, the effective enforcement of audit and financial reporting requirements by the Ministry of the Interior,tougher imposition of hard budget constraints and the development of local media are proposed as possible explanations.The hypotheses that the fiscal variables reflect the income level at the locality or the success of the authority’s head in extracting resources from the central government are tested and rejected.The results are interpreted as suggesting that important progress has been made in Israel towards meeting critical preconditions for a more decentralized approach to local government.

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