In recent years, Israel has deeply and quickly transformed itself from a self-perceived social-democratic regime into a privatized and liberalized "Start-Up Nation" and a highly divided society. This transition to neoliberalism has been coupled with the adoption of a hawkish and isolationist foreign policy. How can such a deep change be explained? How can a state presumably founded on the basis of socialist ideas, turn within a few decades into a country characterized by a level of inequality comparable to that of the United States?

By presenting a comprehensive and detailed analysis of the evolution of the Israeli economy from the 1930s to the 1990s, The Israeli Path to Neoliberalism seeks to explain the Israeli path to neoliberalism. It debunks the ‘from-socialism-to-liberalization’ narrative, arguing that the evolution of Israeli capitalism cannot be described or explained as a simple transplantation of imported economic models from advanced liberal democracies. Rather, it asserts that the Israeli variant of capitalism is the product of the encounter between imported Western institutional models and policy ideas, on the one hand, and domestic economic, social and security policy problems on the other. This mechanism of change enables us to understand the factors that gave rise to Israel’s unique combination of liberalization and strong national sentiments.

Providing an in-depth analysis of Israel’s transformation to neoliberalism, the book is a valuable resource for those studying the economic history of Israel, or the political economy of late-developing countries.

chapter |7 pages


Market nationalism and Israeli capitalism

part I|46 pages

The formative period

chapter 2|22 pages

Toward an industrial revolution

chapter 3|22 pages

Constructing state capacities

part II|110 pages

From full employment to economic independence

chapter 4|32 pages

Economic independence

Reality, policy and rhetoric

chapter 6|13 pages

The independence of the Bank of Israel

chapter 7|17 pages

Developmental central banking

chapter 8|30 pages

A financial revolution in Israel

part 181III|57 pages

The path to neoliberalism

chapter 9|34 pages

The Stabilization Plan

chapter 10|21 pages

Israel’s hawkish neoliberalism