Abstract
South Africa is one of the few countries in sub-Saharan Africa that has been embarking on a local economic development (LED) strategy (Malele, 2018). The adoption of the LED policy was motivated by the South African government’s objective of eradicating poverty, creating a large number of jobs, and building sustained economic growth (Koma, 2012). LED was seen as the key to redress the past challenges of the apartheid regime and create better conditions for all South Africans. Lewis (2012) explains that the LED policy was a bottom-up attempt by local actors to improve incomes, employment opportunities and quality of life of people in the communities, particularly in underdeveloped areas and areas undergoing structural adjustment. Since the institutionalisation of LED at local government level, local government has been unable to meet citizens’ demands. This failure is ascribed to inherent incapacities to plan for development, with major inabilities attributed to the lack of capacity within local municipalities; insufficient skilled LED practitioners; a lack of understanding of local economies; a lack of funding for LED; and a lack of integration between local authorities, communities and businesses (Hofisi & Mbeba, 2013; Nel & Rogerson, 2005; Rogerson, 2010). This study seeks to analyse how governance interventions have impacted the implementation of the LED framework in local municipalities. The study distinguishes between the dominant liberal approach to governance, which we call ‘marketenhancing’ governance (generally referred to as good governance), and an alternative view of governance, namely a developmental state governance approach. Findings from the study show that market-led governance reforms have acted as an obstacle to the implementation of the LED framework in South African municipalities. The study proposes that a developmental state governance approach should be considered when implementing the LED framework in municipalities.
M.Com. (Local Economic Development)