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The Neoliberal Targeted Social Investment State: The Case of Ethnic Minorities

Abstract Neoliberal governance has been associated with rising inequality and economic exclusion. Recent scholarship proposes that the social investment state (SIS) is a turn away from such inequality and exclusion-enhancing neoliberalism. The ideal SIS responds to neoliberalism-generated social ills by investing in the productive capacities of all its citizens. However, commentators ask whether an SIS addresses the plight of weaker elements in society, specifically that of disadvantaged ethnic minorities. This paper looks specifically at this question by utilising a critical-case study research design of a surprising example of social investment in disadvantaged ethnic minorities: the extensive labour market policies for Israeli Arabs. This paper introduces the concept of a neoliberal targeted SIS in which social investment programmes are developed for economic reasons, promoted by neoliberal actors (right-wing parties and Ministries of Finance), target narrow groups instead of being applied to all, and the preferred mode for the delivery of services is private. Egalitarian outcomes – to the extent that they materialise – might be thought of as a policy by-product.