The purpose of this study is to seek to understand the process of privatisation and deregulation of Israel's higher education system which had been until the late 20th century predominantly public.
Since 1994, public and governmental agencies became major clients of private universities. Thus the public sector played a major role in the expansion of international universities and in the operation of their academic programmes and became their major financial source. This partnership between the public and the private sector could be explained by the following: the increased demand for higher education by native born Israelis and the large flux of immigrants from the former USSR and Ethiopia on the one side, and the socialist ideology which deeply rooted in the Israeli society, to enable for everyone who wishes to attain higher education to find a place in the undergraduate system (particularly the population of the developmental towns and minority groups) on the other, pushed the Israeli government to expand its boundaries. Israel's public universities have been subjected to relax admissions requirement, which they refused to do.
Another reason is the increasing demand from the public service in general and particularly from the education service that having a BA degree would increase the teacher salary and it does not matter whether the degree comes from an Israeli university(with its higher standards) or from a branch of an international university(with its lower standards). That explains the expansion and diversification that occurred in the higher education system in Israel. The 1998 Branches Act stipulating that any overseas institution intending to open an off shore branch must obtain a licence from the Council of Higher Education. The new regime demonstrates the paradox in higher education policy, on one side privatisation by the backdoor, on the other, regulation and control by the Israeli government.