INDUSTRIAL-DEVELOPMENT AND MUNICIPAL REORGANIZATION - CONFLICT, COOPERATION, AND REGIONAL EFFECTS

In this paper the nature, outcomes, and regional effects of conflicts over the municipal affiliation of industrial areas and large facilitie s in urban fringe and rural areas in Israel are examined, based on an analysis of sixty-seven conflicts that took place during the period 19 61-93. It is demonstrated that the potential for conflicts has increas ed because of the growing dispersal of industry into rural space, the increasing reliance of local government on self-income, and unique Isr aeli circumstances. These conditions have encouraged two contradictory options for local government, both promoted by neoconservative free-m arket approaches. The first consists of a growing role for local gover nment in economic development efforts, accompanied by intense competit ion among local authorities and by the establishment of voluntary mode s of municipal cooperation in initiating and managing industrial areas . Cooperation is intended to achieve a just distribution of regional w ealth and to promote the fiscal soundness of local government. The sec ond option is to remove nodes of economic development from local gover nment to local industrial councils and to free export processing zones , loosely controlled by the central government. These initiatives prac tically strip local government of its potential industrial base, with the intention of promoting national and regional economic growth. Refo rms of the above types tend to originate in the periphery, where the f lexibility to change existing structures is greater than in central re gions. Despite this pioneering role of the periphery, the specific imp lications of these reforms for local autonomy and fiscal viability of local government in peripheral regions are, at best, mixed.