Economic policy is dictated by goals of national security, full utilization of resources, integration of immigrants, and institution of a broad welfare program. The urgency of these goals imposes responsibilities on the government for planning, financing, and directly participating in productive activities. And, in fact, government infrastructure development since 1990 has played a large part in Israel's powerful economic performance in recent years. Major government projects include an expansion of the Ben-Gurion Airport, a subway for Tel-Aviv, a tunnel through Mt. Carmel, and a major new north-south highway.
In the years immediately following independence, the government influenced the setting in which private capital functions, through differential taxation, import and export licensing, subsidies, and high protective tariffs. The 1962 revaluation of the Israeli pound was accompanied by a new economic policy aimed at reduction of protective tariffs, continued support of development, planning and implementation of long-range development, and maximization of efficiency. Subsequently, the government has periodically decreed further monetary devaluations, new taxes, and other austerity measures designed to curb consumption and stimulate exports. By the mid-1990s, the Israeli government was actively engaged in an economic liberalization program that is a stark contrast from the largely state regulated economy of Israel's first few decades.