Urban sprawl, fuelled by powerful market forces, is unlikely to be con
trolled by macro-scale regional plans or by comprehensive reforms of t
he local government map, This paper emphasises two mechanisms that det
ermine the 'rules of the game' of local development and public regulat
ion of urban sprawl: local government finance and the transfer of land
from rural to urban local authorities, Sharing local taxes paid by ne
w non-residential property is discussed, in the Israeli context, as a
means to reduce overdevelopment of industrial areas in the metropolita
n 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 plann
ing and decisions on municipal boundary changes.