This paper considers how municipal entrepreneurialism takes advantage of gaps between state-level planning regulation and local planning capacities. Tensions between local and upper tier regulatory apparatuses are common in Israel, a state characterized by a top-down statutory planning system, where major planning and development issues are subject to the approval of the central state. Intensifying interurban competition for capital investment has stirred local authorities to evade unwanted planning ordinances and central-state supervision while speeding up planning procedures to enhance local development. Taking a highly publicized development, the second IKEA megastore in Israel, this paper examines the sidestepping tactics and the deliberate misinterpretation of land-use regulation as an entrepreneurial strategy and how it really works. This strategy is composed of two dimensions. First, it is based on local know-how concerning planning regulations and taking advantage of ineffective and outdated central-state control. Second, beyond municipal entrepreneurialism, it indicates the practical redrawing of city-state relations in the realm of urban planning. Within the arsenal of local authorities, which are heavily dependent on the central state, this becomes a powerful instrument to boost entrepreneurial agendas.
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