Policies to control urban sprawl: Planning regulations or changes in the 'rules of the game'?

Urban sprawl, fuelled by powerful market forces, is unlikely to be controlled by macro-scale regional plans or by comprehensive reforms of the local government map. This paper emphasises two mechanisms that determine the 'rules of the game' of local development and public regulation of urban sprawl: local government finance and the transfer of land from rural to urban local authorities. Sharing local taxes paid by new non-residential property is discussed, in the Israeli context, as a means to reduce overdevelopment of industrial areas in the metropolitan fringes as well as pressures on open space. Complementary regulative measures, where rural local government is separated from urban local government, are based on improved co-ordination between land-use planning and decisions on municipal boundary changes.