This study describes the socioeconomic dynamics of Israel's one hundred largest local authorities between 1983 and 1995, and identifies factors that affected their relative levels of socioeconomic well-being in this period. A direct comparison of their rankings in these two years highlights the relative decline of the southern development towns and of places with large ultra-orthodox populations, and the relative rise of Arab towns and suburban communities in the central and northern regions of the country. Econometric estimates quantify the effect of human capital and the quality of municipal administration, the short-term impact of the mass immigration from the former Soviet Union, and the influence of shifts in national priorities. The results highlight the considerable impact that policy variables can exert on local socioeconomic development. Better schools, good local government and the different policy levers through which national priorities are realized, are the means for extricating local authorities trapped in a steady state of poor socioeconomic development, and reclaiming the rights of their residents to a fair chance at attaining a reasonable level of material welfare.

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