The Fiscal Path to the State of Israel: Social Policy and State Building in the Yishuv during the Mandate

Social policy and state building have long been central themes in the study of Israeli history. By shifting the focus from the spending side of social programs to their revenue side (dues and contributions), the article explores the fiscal dimension that connected social policy with state building in the Israeli pre-state period, 1920–48 (the Yishuv Jewish-Zionist settlement). The findings show that social programs served the broader agenda of a state-in-the-making, not just through its allocative functions (providing health services and basic income), but also through creating the domestic fiscal capacity necessary to its emergence. This account calls for some important revisions in the understanding of key issues in the political economy of the Yishuv.