We’re coming up on the end of today’s voting in Israel. Historic high turnout is the story of the day. And I would say we still know basically nothing about the outcome. I’ve mentioned a couple times that prediction markets are really only good as distillations of conventional wisdom. But sometimes conventional wisdom can be good to know. On Kalshi today, we’ve seen a new possible prime minister rocketing from nowhere to a 39% probability of winning. And the new guy is “no one.”
A few points on this. I’m a little surprised that “no one” wasn’t ranked higher before because while “no one” has maybe not been the most likely outcome there have been very good chances of his winning for weeks or months. Also remember that in case “no one” wins and no government can be formed, that actually means Netanyahu remains Prime Minister in a caretaker capacity while a new election is scheduled.
Watching Israel Twitter there are various anti-Netanyahu politicians doing emergency messages, saying we’re behind, rush to the polls, etc. But this is what you say to get people out. And other signals point to equal amounts of desperation on both sides trying to get every last voter to the polls.
Two other points to pay attention to.
While there are historic levels of turnout today, at least going back about half a century and possibly to the country’s founding, there is also, specifically, historically high turnout in the country’s Arab population. The rise in turn out appears to be higher in the Arab sector, which isn’t difficult since there is generally lower voting participation among Israel’s Arab or Palestinian population. This could be a significant — even game-changing — development. But its impact on the outcome depends hugely on which of the two major primarily Arab parties this group votes for, and whether there’s significant strategic voting for predominantly Jewish parties. I don’t know and I’m not sure anyone really knows which of those is going to be the case. The one thing that seems broadly agreed is that the motivation is heavily weighted toward driving Benjamin Netanyahu from office.
The other thing to remember about the Israeli electoral system is that pretty big changes are possible because of how voters can switch between parties which are parts of the same “blocs” (basically a Netanyahu and anti-Netanyahu block) and the question of which parties get to the 3.25% threshold. If you get to exactly 3.25% you get four seats in the 120-seat Knesset. If you get 3.24% you get nothing. So a couple parties unexpectedly falling below or getting above that number can have a very big impact. There are about a dozen parties which are either expected to or have a good shot of crossing that 3.25% threshold. So there’s a lot of potential switching that can happen.
None of that tells us what the final outcome is going to be. But I share that to give you a sense of how the outcome can shift pretty substantially because of these quirks of the multiparty parliamentary system even if broad public opinion is more or less what everyone expected. As I write we’re about a half hour from polls closing.
