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Contemporary intra-state struggles over the future of the welfare state are played out within unequal state architectures, where fiscal state actors (treasuries and central banks) accumulate power resources and authority, while social state actors are subordinated to budgetary control and austerity discipline. This inter-national phenomenon is especially conspicuous in the case of Israel: A small developmental state that underwent a swift and radical transition to neo-liberalism, where the budgetary process is extremely centralized. This state of affairs creates significant barriers for collective intra-state action: A vital aspect in adjusting welfare state institutional arrangements to changing socio-economic conditions. This research studies change under the imperatives of neo-liberalism using two cases of welfare state reform in Israel (1990-2010): The introduction and implementation of the Israeli workfare program, and the changing service regime for children and teens at risk. The paper centers on the dynamics of coalition-making as a collective action strategy, which provides paths out of bureaucratic stalemate. In order to propel change, strategic state actors may (1) utilize new policy ideas strategically to produce ambiguous agreements, and (2) engineer new organizational structures in order to mobilize other actors and forge a coalition adequate for their needs. Notwithstanding the important role of ideas in forging ambiguous agreements, the paper argues that autonomy structures in intra-state coalitions are decisive for the unfolding of reform paths in the neo-liberal state in terms of their welfare logic, public legitimacy and sustainability.