This chapter evaluates privatization and its impact on the civil service in Israel. It distinguishes between privatization of private goods, privatization of public services, and privatization of operations (outsourcing). The historical narrative traces the shift from a heavily state-directed economy (kibbutzim, Histadrut , extensive government-company ownership) to a neoliberal model driven by the Likud-era stabilization program and subsequent legislation. The chapter analyzes key cases – sale of government corporations (e.g., BAZAN and ICL); “privatization by omission” in health, education, and welfare; and the failed attempt to privatize prisons – illustrating how political motives, cronyism, and insufficient competition often outweighed efficiency gains. This chapter highlights the paradox that privatization expands the need for regulation while reducing the state’s direct oversight, leading to ambiguous responsibility lines and occasional public-sector failures (e.g., environmental harm and loss of labor rights). A 2015 legislative proposal would have set clear boundaries, required economic and social impact assessments, mandated public consultation, embedded “golden-share” safeguards, and preserved strong supervisory powers. This chapter argues that privatization should be an exception rather than the rule, ensuring that any transfer of public functions safeguards quality, equity, and democratic accountability.