The Israeli governments have implemented a consistent and systematic policy intended to encourage Jewish citizens to migrate to the West Bank. One of the tools used to this end is to grant financial benefits and incentives to citizens - both directly and through the Jewish local authorities. The purpose of this support is to raise the standard of living of these citizens and to encourage migration to the West Bank.
Most of the settlements in the West Bank are defined as national priority areas (A class or B class). Accordingly, the settlers and other Israeli citizens working or investing in the settlements are entitled to significant financial benefits. These benefits are provided by eight government ministries: the Ministry of Construction and Housing (reduction of price of the land and generous loans for the purchase of apartments, part of which is converted to a grant); the Israel Lands Administration (significant price reductions in leasing land); the Ministry of Education (Compulsory Education Law from Age Three, the long school day, extension of the school year, incentives for teachers, and subsidized transportation to school); the ministries of industry and trade, tourism, and agriculture (grants for investors, development of infrastructure for industrial zones, indemnification for loss of income resulting from custom duties imposed by countries of the European Union); the Ministry of Labor and Social Affairs (incentives for social workers); and the Ministry of Finance (reductions in income tax for individuals and companies). In 2003, the Ministry of Finance cancelled the income tax reduction that residents of settlements previously received.
The Ministry of the Interior provides increased grants for the local authorities in the territories relative to those provided for communities within Israel. In the years 2000 to 2006, the average per capita grant in the settlements in the West Bank was approximately 57 percent higher than the average per capita grant in authorities inside Israel. According to the report of the accountant general in the Ministry of Finance, which summarizes the total budget transfers the state made to local authorities in 2007, the per capita support given to the three municipalities and six regional councils in the West Bank was significantly higher than the per capita support given to municipalities inside the Green Line.
One of the mechanisms used by the government to favor the Jewish local authorities in the West Bank, in comparison with local authorities inside Israel, is to channel funding through the Settlement Division of the World Zionist Organization. Although the entire budget of the Settlement Division comes from state funds, as a non-governmental body it is not subject to the rules applying to government ministries in Israel.