The Reconfigured Institutional Architecture of the State
This chapter examines the institutional dynamics that have marked the reconfiguration of the Israeli state in the course of the transition to a neoliberal regime. In analyzing the transformation of the state and its relationships with the economy, it first assesses changes in the institutional architecture of the state and then discusses the modes of action of pivotal state agencies and the patterns of relationships among them. Specifically, the ascendency of the two most powerful state agencies in charge of macroeconomic management—the Ministry of Finance and the Bank of Israel—is examined, as well as the ways in which these actors promoted the adoption of particular reforms as key factors in the institutionalization of the neoliberal regime. The chapter claims that the incremental liberalization of the Israeli political economy was fundamentally molded by actions and interactions among state agencies striving to further their position within the political–economic field.