The political economy of populists in power, between policy and polity: Evidence from the Israeli case

This paper explores the connection between the current wave of populism, economic policies and governance practices. We first review the different ways in which populist political economy has been conceptualised, focusing on the relationship between populism and neoliberalism in terms of both policy and polity. We then briefly discuss right-wing populist governments’ recent economic policies and institutional changes. We argue that, while representing a continuation of neoliberalism in some areas, right-wing populism may, when in power, undermine neoliberal economic policies and institutional power by subverting governance norms and reintroducing the state as a major actor in the economy. To demonstrate and support our argument, we analyse the Israeli case, in which the right-wing populist leader Benjamin Netanyahu led three governmental coalitions between 2009 and 2019. We focus on the Israeli government’s response to the cost-of-living crisis and the housing crisis. We show that the populist Israeli government went beyond clientelism and welfare chauvinism and moved towards a more redistributive and expansionist economic agenda. To finance and legislate this agenda, it used unorthodox, short-term governance practices to bypass or overcome institutional limitations.