Institutional constraints on transport policymaking: The case of company cars in Israel

Galit Cohen-Blankshtain*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


Transportation analysis emphasizes the necessity to internalize the transport externalities of car usage through taxation. Yet taxation decisions are often made with non-transport goals in mind. In such cases, transport policies are made 'by the way.' This paper examines such a case: Israel's taxation policy on company cars. It shows that current taxation policies result in increasing numbers of company cars and growing numbers of transport users who are not sensitive to the marginal cost of car use and make excessive use of the car. As a result, a significant portion of Travel Demand Management (TDM) measures cannot affect this group. The Israeli case of company car tax reform demonstrates the problematic effect of a policy that does not take its overall consequences on other policy fields into account and thereby impairs efforts to reduce the negative impacts of the transport system. Also, it demonstrates the importance of institutional aspects of transport policymaking.

Original languageAmerican English
Pages (from-to)411-424
Number of pages14
Issue number3
StatePublished - May 2008

Bibliographical note

Funding Information:
Source: European Commission Directorate General for Environment (2002) a Provisional data b Derived from the database of car registration at the Ministry of Transport


  • Company cars
  • Policy by the way, TDM
  • Transport policy


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