The history of Israel’s land allocation regime is traced from its inception in the formative years (1948–60), focusing on distribution of urban land to private and business entities. Rich archival materials provide documentation regarding the Development Authority (DA), established in 1950, and its practices. The prohibition on selling “national lands,” zealously observed in Israel’s rural regions, was never closely adhered to in urban areas. The DA’s double role, as a major actor in land allocation as well as the institution representing the “rules of the game,” serves as a platform for a preliminary examination into institutional path dependency theories.