Rethinking the Neoliberal Transformation of the State: State Elites' Motivations and Actions in Israel's Neoliberalization

• In Event: 4255 - Section on Economic Sociology Roundtables (1 hour)
  In Refereed Roundtable 60min: 7. Law, Regulation, Policy

Abstract

What made state elites, including politicians and unelected senior officials, adopt neoliberal policies? A common explanation points to neoliberal ideas' role (including ideology, paradigms and policy prescriptions) in converting state elites' policy preferences and goals. However, the adoption of neoliberal ideas was always incoherent, inconsistent, and incomplete. Alongside model neoliberal policies, elements of state protectionism, state-led development, and expansion of social protection were intermittently pursued by state elites. Understanding neoliberalism as a compelling ideological system born outside politics cannot explain why and when state elites undertake anti-neoliberal actions, or what other motivations drive state elites' actions in neoliberalism. This article explores this puzzle using a single historical case of neoliberal transformation in Israel, focusing on one central aspect: the restructuration of power relations between the state and powerful veto actors who oppose neoliberal policies in society, and inside the state. Using distinct historical observations on Israeli state elites' actions from the 1960s to 1990s, the article sets to challenge the argument that state elites' embrace of neoliberal ideas drove the restructuration of power relations. First, the article returns to the crisis of the pre-neoliberal economic-political order: Israel's hyper-corporatist developmental state. Long before neoliberal prescriptions were introduced, the article shows how the predicaments of the pre-neoliberal regime produced unequal constraints on some state elites' power and autonomy, establishing an early motivation to break loose from entrenched institutional shackles and advance restructuration. Then, shifting forward to the 1990s, the same state elites undertook perplexing policy actions: advancing textbook neoliberal policy action (e.g. privatization and adoption deficit and inflation targeting rules), while pursing anti-neoliberal policy goals by undertaking anti-neoliberal policy action (nationalization). Although violating key neoliberal dictums, these actions served state elites' motivations as top managers of state institutions who ordinarily strive to aggrandize their political power and autonomy.

Author

• Asa Maron, University of Haifa