Inter-municipal cooperation is promoted around the globe to achieve economies of scale in service provision, coordinated development, and as a tool to reduce spatial disparities, often viewed as an alternative to amalgamations or upper tier-municipalities. It is frequently a source for tension between local initiative and central state regulation, the former prone to “spoilers”, such as newly elected mayors, and the latter to (in)effectiveness and political interests of central state agents. A 2013 study of inter-municipal cooperation in the development of industrial parks in Israel showed how a local initiative (1992) was adopted and encouraged by central state ministries (1997), followed by its use as a tool imposed from above to achieve objectives such as distributional justice (2006). However, “the road to hell has been paved with good intentions”. The 2006 legal framework proved to be an obstacle rather than a tool enhancing implementation, hindering voluntary initiatives while failing to realize imposed redistribution. The present study revisits the Israeli case, aiming to assess the apparent 2014 breakthrough in revenue redistribution in the Negev, also referring a procedural reform: the appointment of permanent municipal boundary and revenue redistribution commissions. It also discusses the encouragement of regional clusters inspired by French intercommunalité that have started as a local initiative, later adopted as a central state initiative, including a new 2016 legal framework. These bring together sound and weak (mainly Arab) local authorities although lacking an explicit element of redistribution. The qualitative research, in progress, revealed hurdles associated with embedded centralization, such as the pressures of the Ministry of Defense to exempt army facilities from property taxes and likely increased influence of the Minister of Interior on the boundary and revenue redistribution commissions. Paradoxically, centralization may reduce rather than increase policy consistency and does not necessarily result in more effective implementation that balances the desire for meaningful inter-municipal cooperation (particularly one that contributes to distributional justice), while retaining the principle of voluntarism or “gentle imposition” in the development of these mechanisms.