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Economy, Government Role in the Economy
austerity measures, decisive action, subsidizing, largest employer, government spending
Because of the pressing nature of Israel’s economic problems—national security and absorption of immigrants—the government has played a central role in economic policymaking and intervention throughout Israel’s history. For example, the government has been heavily involved in planning, subsidizing, and controlling agriculture since independence. The government has also taken decisive action to avert economic crises. For example, in the early 1980s it instituted an emergency program of spending cuts and austerity measures to counter hyperinflation. The government, including government-owned businesses, remains the largest employer, particularly in the public services sector. To reduce government spending and stimulate economic growth, the government began privatizing many of its enterprises in the 1990s.
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