Basic Commodity Subsidies and Income Distribution
Author: Leah Ahdut, Ephraim Sadka Policy Research

Since July, 1985, when the economic stabilization plan was implemented, a clear trend of real decrease in the state budget for basic food commodity and public transport subsidies has been evident.

Subsidization of basic foodstuffs and public transport is an important element in the phalanx of systems meant to narrow income distribution disparities in Israel. Thus the cutback in subsidies aggravates inequality in the distribution of incomes.

This study reviews the development of the subsidy system and suggests alternatives to basic commodity subsidies.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1988-1989, and is available upon request.

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