How do external macrolevel factors encourage bureaucrats to become policy entrepreneurs? And what are their organizational goals in pursuing entrepreneurship? Contrary to traditional public choice literature on bureaucracy that sees the latter as change‐resistant, this study stresses that bureaucracies can and do change; they are not as insulated from reformist pressure. In this study, we lay the conditions under which change occurs, making bureaucrats—policy entrepreneurs. We argue that: (1) bureaucratic inefficiency, leading to (2) societal pressure as expressed by public opinion, and consequently to (3) pressure from potential new providers offering bottom‐up competition, will encourage bureaucrats to turn to policy entrepreneurship strategies. In addition, we assert that their goals in doing so are to modify and design efficient services, while protecting their monopoly on service provision. We test these claims by analyzing the state‐religion dynamics in Israel, and specifically the case of the 2021 kosher food inspection reform.