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Delivering on Economic Prosperity in Israel
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Delivering on Economic Prosperity in Israel

How Monopolies Are Hampering the “Start-Up Nation”

Dany Bahar
Brookings Institution, 2016
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Editorial Rating

8

getAbstract Rating

  • Innovative

Recommendation

Israel’s economy – a fertile incubator for tech start-ups, perhaps rivaled only by Silicon Valley – stands out for excessive market concentrations across most of its industrial and service sectors. According to economist Dany Bahar, the Israeli middle class isn’t benefiting from the nation’s vibrant economy due to its high consumer prices, partly the result of monopolies. Thus, Israelis advocate political efforts to lower their cost of living. getAbstract recommends this insightful article on Israel’s economic challenges to analysts, policy makers and executives.

Summary

On the surface, Israel appears to have a healthy economy. Its R&D spending, as a percentage of GDP, is the highest of any country in the world. This nurtures entrepreneurship and tech start-ups. Israel enjoys growth and macroeconomic stability, yet its middle class is missing out on prosperity. In 2011, thousands of Israelis rallied for “social justice” reforms, focused on cutting the cost of living. The outcry about consumer prices has been a major part of the political landscape ever since. While many factors contribute to high prices, low levels of competition across sectors stand out as a significant...

About the Author

Dany Bahar is a global economy and development fellow at the Brookings Institution.

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