Local economic development in South Africa : a critical review

Abstract

Local economic development (LED) has been applied as a development strategy in many countries, including the United States of America (USA), Germany, and Italy in the global North, and Brazil and South Africa (SA) in the global South. This approach is viewed as a grassroots strategy where local resources and ideas are mobilized to achieve local development with the government providing an enabling environment. It is associated with devolution of authority and the mobilization of local resources to implement local interventions that address the needs of localities. In South Africa, local economic development planning is state-led, and it is mandatory for local municipalities to become developmental local governments with the responsibility of implementing economic development at the local level. This state-led brand of LED, hereafter referred to as “LED in SA”, does not conform entirely to the international prescripts for local economic development. A systematic review process was used to identify constraints faced by this strategy in SA. Systematic searches of major electronic databases were used to identify the academic literature used in this review. Grey literature on government and organizations' websites was also reviewed. ResearchGate, from which full-text requests can be made directly to authors, was utilized, especially in search of the most recent articles. The inclusion/exclusion criteria were based on whether the abstracts of the identified articles contained the concept 'local economic development' or 'LED'. The identified challenges include those presented by the top-down state-led planning, lack of collaborative partnerships, lack of capacity, lack of funding, and lack of understanding of what the strategy entails. It is possible for LED in SA to be successful if the necessary and sufficient conditions are met. After the state-led planning is implemented, a mechanism should be developed for managing the initiative at grassroots level, building partnerships, improving its funding and capacity, and commissioning studies that can be used to critically evaluate its performance, thus increasing its chances of success. The studies should evaluate the impact of local development interventions and assess how much of the strategy plans within municipalities have been implemented. The understanding of local economic development among all LED in SA practitioners should also be evaluated.