ABSTRACT
This chapter discusses the stable and the dynamic elements of the country's political-economic history: the inner logic characterizing its past and present political-economic regimes, and the tensions and conditionality built into them. The conditions of Jewish immigration and settlement required that the political institutions of the Zionist movement and the Yishuv dominate the mobilization of capital and the purchase of land. The aftermath of the 1967 war fundamentally altered key elements of Israel's political-economic regime. The principal goal of liberalizing economic reforms in Israel, as elsewhere, has been state contraction, a fundamental alteration of the division of labor between markets and the state by means that include privatization, expenditure and tax cuts, sectoral "deregulation". Trade liberalization should be evidenced at the macro level by buying more from the outside world and selling more to it, and at the micro level by the elimination of import restrictions and export incentives.
