LOCAL ECONOMIC DEVELOPMENT
: A REVIEW OF THE
COMMONWEALTH EXPERIENCES
BY
PROF PS REDDY (UKZN)
and
PROF M WALLIS (DUT)
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1. INTRODUCTION
- Not a new concept : originated 30 40 years ago in response to socio –
economic challenges of localities.
Several disciplines contributed :
1970s : interest and ideas kept it alive
: implementation a challenge : varying
levels of success
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2. TOWARDS AN
UNDERSTANDING OF LED
- World Bank : “Build up the economic capacity of
a local area to improve its economic future and
the quality of life for all. It is a process by which
the public, business and ngo sector partners
work collectively to create better conditions for
employment generation”.
- No blueprint for LED : complementary to
provincial/national driven programmes :
decentralisation strategy
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3.KEY STAKEHOLDERS
3.1.LOCAL AUTHORITIES
-
Key actors : facilitate business
development : retention, marketing,
incentives, education and training, small
business development , infrastructure,
reviewing regulatory procedures. Local
governance : creative and adopt
collective approach
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3.2. CIVIL SOCIETY
- Residents fully involved for successful
LED : legitimise process/depoliticise
projects; increase effectiveness/
efficiency; widen consensus/support;
foresee problems by engaging key
partners/ stakeholders; secure
volunteer efforts and incorporate low
income/informal economy groups
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3.3.PRIVATE SECTOR
- Good understanding of local
economy; importance of co –
operating with government; support
small business development and
feasible expansion strategies
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4. ROLE OF NATIONAL, PROVINCIAL
/STATE AND LOCAL GOVERNMENT
- Leadership in LED is not confined to
single sector
4.1. NATIONAL GOVERNMENT
- Robust inclusive local economies : high
level of IGR : micro/macroeconomic
policies : diffuse thinking.
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-
-
Single vision for LED : access to
finance/ national tools/instruments :
facilitate growth. Universities
important.
Key to unlocking potential of locality.
UNCDF : develop capacity of local
governments to manage development.
/support of private sector.
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4.2.PROVINCIAL/STATE GOVERNMENT
- Co – ordinate resources transferred to
departments : priorities/initiatives at
local level. LED : major delivery area.
Departments dealing with LED/local
government adequately capacitated/
empowered : develop capacity of
municipalities
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4.3. LOCAL GOVERNMENT
-
Dynamic implementation of national,
provincial/state policies/instruments :
key to promoting LED : develop
capacity/skills base. Not sole perogative
to promote LED, but leadership
important : direct/indirect/critical roles.
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5. COMMONWEALTH EXPERIENCES
- Caribbean : Economic liberalism and
globalisation : socio – economic
challenges. “Third Economic Way” :
transformed local government. New
concept : challenges
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-
Africa : LED assimilated with
community/ local development to
achieve socio - economic goals : short
term survival as opposed to
sustainability/economic growth. Africa
Report : private/ngo sector growing.
Challenges : lack of capacity,
transparency/accountability/difficult
development environment.
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- Asia : Financial crisis : decentralised
governance : promote LED.: economic
growth with private sector/civil society.
Asian Development Bank : six strategic
principles : partnership, decentralisation,
participation, capacity building, networks
and communication technology
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6. LED PROSPECTS& CHALLENGES
Differences : developed/developing states
: general situation of local government
rather than problems specific to LED
6.1.Unfunded Mandate : gap : what
national government/society expects
and resources allocated
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6.2.Uneven Development&
Consequences: Impact of colonial
rule/economic history/.environmental
considerations/ locational features
6.3.LED Policy Transfer :
inappropriate transfer : policy failure.
Economic/ social/ political and
ideological contexts important. Local
realities : skills/investment climate/
limited funding : conditions
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6.4.Rural Local Government Challenges
: Traditional leadership : integral part of
local governance : key participants : land
tenure : politically fuelled tensions.
Deconcentration rather than devolution
model more suitable for rural areas
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6.5.Integration and Difficulties:
integrated action/planning and working
interepartmentally : appropriate
structural arrangements/model for
business development
6.6.Competing Priorities : Various
functions : competiting priorities :
demands on budget : challenges.
Energising LED : prejudiced by other
forms of LED.
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6.7.Need for Business Skills,
Capacity &Attitudes : capacity/
entrepreneural leadership /business
skills. Links with educational/training
institutions.
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6.8.IGR : Role of National/
Intermediate Governments and
Constitutions :
Centralised approach critiqued.
Constitutions : powers and functions
to local government : stronger role in
implementing socio – economic
policies : need support for LED
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6.9. Planning &Related Obstacles:
Difficult local/regional development
environment : limited capacity/
resources/ poor accessibility and weak
civil society : viability of LED
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6.10.Global Financial Crisis
2007 Crisis : challenges : Less
dramatic than Europe and Asia.
Crisis for LED : Greater scarcity of
revenue for public sector spending/.
private sector funding difficult to
obtain; donors cautious; debts
relief/cancellations more difficult.
Crisis : local action : LED
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7. INTERNATIONAL/NATIONAL/LOCAL
NETWORKS AND DONOR SUPPORT
- Networks/donors involved in LED
: share experiences. Strengthen
business communities through
public private partnerships,
decentralisation and LED.
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– Moyo :aid dependancy. Many localities :
basic conditions in place for LED : some
external top down support : main
supporters are GTZ; UN &World Bank.
UNCDF three objectives : subnational
focus; local level institutional
development; performance linked and
national policy relevance.
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- Donors : supporters of LED : over a
decade : from structural adjustment of
1990s : strenghten business
communities/national policy relevance.
- CLGF and other international ngos/
donor agencies : support LED by sharing
knowledge, insights and best practices.
Dangers of policy transfer : inadequate
grounding in local realities
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8.CONCLUSION
- Practised internationally for three
decades : not sole perogative of local
authority but collaborative partnership.
Several roleplayers : firm commitment,
supporting and enabling political
environment. Local partnerships/
linkages/networks can facilitate the
process.
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Way forward &Recommendations :
- The legislative framework including
national constitution reviewed to
ensure that LED is local government
function;
- LED must not be allowed to fall foul of
the unfunded mandate syndrome;
- National government : determine what
role it can play/action taken to support
LED;
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- Need for entrepreneural style of
leadership;
- Multiplicity of actors : networking/coordination
- Most countries are trying to cope with
the long term effects of the global crisis :
LED : part of way forward and not
casualty;
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- Enabling environment at local level
for companies to succeed and
business to flourish;
- Active and consistent participation of
private/ngo sector for recognition and
exploitation of local development
opportunities
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