The role of Local Economic Development Agencies in South Africa’s developmental state ambitions

Abstract

South Africa’s Local Economic Development Agencies have emerged as appropriate institutional structures for advancing socio-economic development in the local government-led development landscape, due to the inability of local municipalities to lead local economic development. This shift signifies that South Africa is turning to local economic development strategies to address developmental challenges, such as poor socio-economic conditions (unemployment, poverty and inequality), by creating local development solutions and employment opportunities. This article utilises the developmental state theory to examine the role of Local Economic Development Agencies in South Africa’s aspirations of becoming a capable developmental state. While the developmental state literature is concerned with the central role of the state in economic development, this article extends the developmental state theory to the subnational level by arguing that the developmental local government is the local developmental state. In addition, the article locates Local Economic Development Agencies within the developmental state paradigm by showing that Local Economic Development Agencies were established as economic development coordinators at the subnational level to assist local government in addressing South Africa’s triple challenges. Although the roles and functions of South African Local Economic Development Agencies are aligned to the developmental state ideology, their developmental mandate is undermined by the lack of coordination within local institutions.

Local economic development agencies and peripheral small town development: Evidence from Somerset East, South Africa

“…The poor performance of LED in South Africa has been especially so in the context of less well-resourced municipalities in small towns. In order to support struggling local governments seeking to improve prospects for local development the national government, through the activities of the Industrial Development Corporation, supported the growth of LEDAs in South Africa (Lawrence, 2013;Khambule, 2018). LEDAs operate as entities with public interest and accountability but apply private sector tools and strategies.…”

“…With a general low level of confidence surrounding local government and in particular that the practices of local government are not matching policy intent, one aspect of that revised policy framework is the role accorded to Local Economic Development Agencies or LEDAs to support enhanced economic and social development prospects particularly in the country's peripheral regions. The introduction of LEDAs into the South African development landscape as part of the developmental state as well as aspects of the unfolding operations of LEDAs are documented in a number of recent research contributions (Malefane & Khalo, 2010;Malefane, 2011;Lawrence, 2013;Venter, 2014;Lawrence, 2016;Khambule, 2018;Lawrence & Rogerson, 2018) In terms of international scholarship LEDAs are acknowledged as an institutional vehicle which potentially can be a significant contributor to place-based development (UNDP et al, 2003;Muguira, 2006;Meyer-Stamer, 2007;Canzanelli, 2008Canzanelli, , 2009International Link and Services for Local Economic Development Agencies, 2009;Mountford, 2009;Blakely & Leigh, 2010;Clark et al, 2010;Canzanelli, 2011aCanzanelli, , 2011bBateman, 2012;Ferrannini & Canzanelli, 2013). Traditionally LEDAs are associated with local governments and closely aligned with locality development agendas as a key stakeholder both linked to local government as well as operating independently of it (Venter, 2014;Lawrence, 2018).…”

Constitutional Legal Framework of Local Government in Russia and South Africa

“…Thus, as noted in the literature, in the general system of public administration, municipalities are entrusted with the role of agents ensuring a high standard of living for citizens. 54 At the same time, the need for economic development of municipalities ("local economic development") is seen not just as a right, but as a direct constitutional requirement and a corresponding obligation of local governments. 55 One of the most important official documents that reveals the role of local government in ensuring the progressive development of society and modernization of the economy is the so-called White Paper on Local Government in South Africa -a program document that describes the socio-political vision of implementing the local self-government.…”

Exploring the role of social dialogue in local economic development: A case of a South African Local Economic Development Agency

“…This failure is attributed to the ‘lack of appropriate local institutions that have the mandate and legitimacy to represent broad-based civil society interests… and sufficient neutrality to create bridges between different interests and open up a dialogue between government, businesses and civil society representatives’ (Gasser et al, 2013: 35). The LED in South Africa and in many countries is failing because of a lack of capacity, a lack of understanding LED, a lack of funding for LED and so on (Khambule, 2018a, 2018b; Meyer, 2014). In the South African context, the absence of such an institution undermines the already weakened capacity of the local state to respond to the triple challenges of unemployment, poverty and inequality that face the country.…”