Local economic development, an emerging reality in sub saharan africa

LOCAL ECONOMIC DEVELOPMENT, AN

EMERGING REALITY IN SUB-SAHARAN AFRICA

(CASE OF REPUBLIC OF SOUTH AFRICA)



MASTERS THESIS

SUBMITTED BY

EVANS FONSO AKAH

DEVELOPMENT AND INTERNATIONAL RELATIONS

AALBORG UNIVERSITY, DENMARK

DECEMBER 2008

TABLE OF CONTENTS

TABLE OF CONTENTS i

ACKNOWLEDGEMENTS iii

LIST OF ABBREVIATIONS iv

DEDICATION v

ABSTRACT vi

CHAPTER 1 : INTRODUCTION AND PROBLEM FORMULATION 1

1.1: Introduction 1

1.2: Problem Formulation 4

CHAPTER 2 : METHODOLOGY 7

2.1: Research Design 7

2.1.1: Case Study Research Design 7

2.1.2: Explanatory, Clinical Case Study Design 7

2.1.3: The use of Theories in Case Study research Design 8

2.2: The Structure of this Project 9

2.2.1: Theoretical Consideration 11

2.3: Alternative Theory 12

2.4: The aim of the Thesis 12

2.5: Literature 14

2.6: Definition Terms 14

CHAPTER 3 : EMPIRICAL DATA 17

3.1: Background to LED in the Republic of South Africa (RSA) 17

3.2: Local Economic Development as an Emerging Reality in SA 18

3.2.1: Overview 18

3.2.2: Why LED? 20

3.3: Policy Consideration for LED in South Africa 20

3.4: Local Economic Development in South Africa 22

3.4.1: Developmental Local Government 22

3.4.2: The Role of Local Governments in Promoting LED in SA 22

3.4.3: Objectives of Developmental Local Government 23

3.4.3.1: Maximizing Social Development and Economic Growth 23

3.4.3.2: Integrating and coordinating 24

3.4.3.3: Democratizing Development, Empowering and Redistributing 24

3.4.3.4: Leading and Learning 25

3.4.4: Advantages of LED in SA 27

3.4.5: The Council Monographic Study (MS) and Strategic Plan (SP) 28

3.4.6: Council Monographic Studies (MS) 28

3.4.7: Council Strategic Plan (SP) 28

3.4.8: Participatory Economic Analysis 29

3.5: Community Driven LED Case Study in the Rural District of Hertzog 30

3.5.1: The Study Area 30

3.5.2: Hertzog Agricultural Cooperative (HACOP) Initiative 31

3.5.3: Flaws of HACOP 32

3.6: The Johannesburg LED Urban Case Study 32

3.6.1: The Economic Background of Johannesburg 33

3.6.2: LED Strategies for Johannesburg 33

3.6.3: The Outcome of the Project 34

3.6.4: Lessons Learned in the Programme 34

CHAPTER 4: THEORETICAL AND CONCEPTUAL CHAPTER 38

4.1: The Neo-Liberal Theory 38

4.1.1: Definition of Neo-liberalism and the Theory 38

4.1.2: The Washington Consensus 41

4.1.3: Criticism of the Neo-Liberal Theory 41

4.2: The Empowerment Theory 44

4.2.1: Empowerment as Participation 47

4.2.2: Empowerment as Capacity Building 47

4.2.3: Empowerment through Economic Improvement 48

4.2.4: Critique to the Empowerment Theory 49

4.3: Theory on Decentralization of Governance 51

4.3.1: The Argument for the Decentralization Theory 53

4.3.1.1: Efficiency Values 54

4.3.1.2: Governance Value 54

4.3.2: Critique of the Decentralization Theory 56

4.4: The Concept of Good Governance 57

4.4.1: Attributes of Good Governance 59

CHAPTER 5: ANALYSIS, CONCLUSION AND PERSPECTIVES 64

5.1: Analysis 64

5.2: Conclusion 73

5.3: Perspectives 75

Bibliography 76

ACKNOWLEDGEMENTS

I wish to thank all those who supported me through out my studies in Aalborg University. Intellectually, my greatest debt is owed to my supervisor Dr. Vibeke Andersson who did not only read my work but also inspired and focused my thoughts throughout this research project. My sincere thanks also go to my beloved wife Ntsang Miranda Akah who took her time to read through the manuscript and her unremitting moral support during these tough moments. I would also like to extend my appreciation to my sisters Mildred Bugh Ferim and Nicholine Ngum Anagho for their continuous encouragements.

My gratitude also goes to Hosea Nguh Akam and Franklin Mbende Che who gave me a lot of technical assistance with regards to laptop when I was writing this masters thesis. I also owe a duty say thanks to; Eric Shu Neba, Mr and Mrs Senjo, Leonard Anagho and Collins Anyi for their moral and social support in times of sorrow and happiness. To Bradley and Junior I say thanks for your cheers to me when I am returning from the library.
Above all, my endless thanks and praises go to God Almighty for guiding and guarding me through out this work.

LIST OF ABBREVIATIONS

ANC………...………………………………………………….African National Congress

CSO ………………………………………….………………...Civil Society Organization

CSO’s ...………..……………………………………………. Civil Society Organizations

DLG …………………………………………………...Developmental Local Government

DPLG…………………………………………..……...White Paper on Local Government

EU…………………………………………………………………………European Union

GDP………………………………………………………………Gross Domestic Product

Gear……………………………………………..Growth, Employment and Redistribution

HACOP……………………………………………........Hertzog Agricultural Cooperative

HELVETAS …………..……………...... Swiss Association for International Cooperation

IMF…………………………………….…………………….International Monetary Fund

LEDA………………………….........Local Employment Development action programme

LED………………………………………………………...Local Economic Development

LG…………………………………………………………………..…. Local Government

LG’s……………………………………………………………………Local Governments

MDG………………………………………………………Millennium Development Goal

MDG’s……………………………………………………Millennium Development Goals

MS …………………………………………… ………………….....Monographic Studies

NGO……………………………………………………None Governmental Organization

NGO’s…………………………………………………None Governmental Organizations

OECD ……………………Organization for the Economic Cooperation and Development

RDP…………………………………………….Reconstruction Development Programme

RSA……………………………………………………………...Republic of South Africa

SA……………………………………………………………………………..South Africa

SP ……………………………………………. ……………………………..Strategic Plan

SSA…………………………………………………………………….Sub-Saharan Africa

UN…………………………………………………………………………...United Nation

US…………………………………………………………………………….United States

WB…………………………………………………………………………….World Bank

WTO……………………………………………………………World Trade Organization