Unravelling the Politics of Activation Reforms: Exploring the Unusual Israeli Trajectory

Contemporary active labour market (ALM) reforms are pivotal in the reorganization of the welfare state as they challenge and threaten some of the fundamental achievements of labour in capitalist societies: social programmes and entitlements that compensate for unemployment, and governance arrangements in which the social partners share authority and responsibility with the state. Consequently, ALM reforms may give raise to social unrest and political struggle that involves the state (the main proponent of ALM reforms), trade unions and political parties. These conflicts are important in the politicization of reforms, i.e. raising public awareness of and engagement with controversies of welfare state change. In this article, we use a non-European perspective to ask more generally how distinct historical institutions create separate ‘politicization trajectories’ of ALM reforms, which in turn produce different policy designs and outcomes. Centring on the case of Israel, in which historically ‘abnormal’ class politics fostered indifference to the reform in both trade unions and political parties, we maintain that the preliminary de-politicization made it possible for bureaucrats to control the reform, leading to an intra-state conflict between competing agencies over its design and implementation. The usurpation of the reform by the Ministry of Finance made it conspicuously unbalanced, provoking many grievances. Paradoxically, the de-politicization of the reform advanced its re-politicization, led by non-governmental advocacy organizations in civil society. These uncommon political actors in the politics of ALM reforms were able to lead a counter-coalition, delegitimize the reform, and mobilize politicians to eventually terminate activation.