ABSTRACT
This chapter outlines the main features of the old paradigm for promoting regional growth in Israel and its limited success. It describes the long-term master plan for Israel and its proposals for endogenous regional economic growth. Economic regional structures in Israel do not reflect any long-term natural free market development. The efficiency of support to agriculture as a measure to build an economic base for the growth of peripheral regions has decreased continuously with the trends of economic and political change in Israel. The Long-Term Master Plan for Israel outlines land use and economic development trends for the period 2000-2020. Contemporary thinking on regional economic growth considers regions not as a marginal component of the national economy but as economic entities with their own potential to create competitive advantage. The normative allocation of public expenditure for physical infrastructure by regions has to be based on a criterion variable.
