In February 1962, the Israeli government put in place a far-reaching economic liberalization reform. Had it been implemented as designed by the economists at the Bank of Israel and the Ministry of Finance, the plan could have dramatically changed Israel’s political-economic structure. Yet the plan’s actual implementation was limited and partial, with the result that economic liberalization was postponed for two further decades. This article examines the political dynamics through which Israeli economists tried to persuade political decision-makers to adopt the New Economic Policy and assesses the political obstructions that organized workers, employers, and the Ministry of Trade and Industry utilized in order to prevent its implementation. This analysis reveals the real yet limited political power that Israeli professional economists possessed in the 1960s, as well as the limits binding the power of the state with regard to organized economic interests.
ronen mandelkern is a Lecturer in Political Science at Tel Aviv University. Previously, he held Postdoctoral Fellowships at the Polonsky Academyat the Van Leer Jerusalem Institute and at the Max Planck Institute for the Study of Societies, Cologne. His main research fields are comparative political economy and international political economy, with a focus on economic liberalization processes in Israel and in other developed economies.