ABSTRACT
This chapter deals with an issue that has profound importance for many features of Israel's political economy: the large size of the government and other public sector bodies. It identifies a number of items not included in the government budget or the official compilations of the Central Bureau of Statistics. The chapter describes two kinds of implications for policy and politics. At risk are the conclusions of political scientists and economists that rely on quantitative analyses of financial data made available by governmental and international bodies. Israel's public finances may be extreme manifestations of a government that dominates the economy and conducts much of its public business via bodies that are not, strictly speaking, governmental. As in Israel, the activities of quasi-governmental organizations are especially problematic. Israel's variety of democracy seems especially conducive to a large and growing role for government.
