Neoliberal ideas of government and the political empowerment of economists in advanced nation-states: The case of Israel

Abstract

What explains the continued political influence of economists, particularly after the 2008 financial crisis? The two commonly cited factors-professional authority and ideational persuasiveness-might seem inadequate as the financial crisis undermined both. This article focuses instead on how the institutionalization of neoliberal ideas of government (NIGs) politically empowered economists before 2008 and supported the preservation of their power afterwards. NIGs are economic theories of authoritative decision-making processes which link economic malaise to democratic political organization and offer prescriptions for rationalization through depoliticization of economic policy-making. Their institutionalization, following the economic crises of the 1970s and 1980s, empowered economists and reflected a transformation in their role in government, from policy experts to policy-makers. While the 2008 crisis has weakened economists' professional authority and ideational persuasiveness, it has not impaired the institutionalization of their pivotal policy-making position. An historical examination of the Israeli community of economists illustrates this argument.