Local economic development, an emerging reality in sub saharan africa

1.2: Problem Formulation

Local economic development as a practical concept aims to strengthen the economic capacities of localities, improving its future and the quality of life for all. It focuses on the community’s competitive advantage and provides communities with the means to identify new opportunities, create jobs, income, develop local infrastructure and enhance the revenue sources for the municipality and its people. Thus it lays emphasis on local needs and the use of local resources for the development of its own economic potentials. Communities in both the developed and less developed world turn more increasingly to LED strategies as a response to the challenges posed by globalization and the widespread move towards decentralization of governance (Cazanelli, October 2001: p. 6 – 9 and Catenacci, December 2003: p. 12 – 16).
Thus LED seeks to address the hypothesis of an economic possibility of solving the problems of the underdevelopment of communities within this present global dispensation. Communities in the Republic of South Africa (RSA) are endowed with enormous economic possibilities which can be used as a means to jump-start their own economic advancement. Yet these resources are seldom engaged to enable local populations reap the benefits of their own economic potentials. The driving force of this hypothesis stems from the fact that states and other international economic actors have designed and approved economic policies that have stood the test of time, yet academic researchers and professionals within development and international relations were quick to find fault with these policies for not being capable of solving problems at local levels due to the specific peculiarities of localities.

The rationale behind the many LED initiatives in South Africa became obvious in that, people living in their localities are concerned about their economic future and are bound to determine their own economic destiny through LED initiatives. Rather than being mainly the result of economic strategies pursued at the national level (the top bottom approach) emphasis for local potential for economic development is resulting more from the many local initiatives (bottom up approach) taking place (Spilling, 1985: p.1).

As such, the developed and developing worlds have been experiencing processes of economic changes. This has affected so much the production forms, organizations and enterprise management, the role of public intervention in the economy as well as the activities of private organizations and why not the labour market. These changes are further compounded by the increasing globalization of the world’s economy which poses major challenges in guarantying proper conditions for the consolidation of national local small and medium size enterprises. Secondly, centralized policies had little effect on the more marginalized areas of the economy to reassure growth. The results of such policies became inevitable, sometimes leading to poverty, exclusion of disadvantaged groups in the society, less safe environment, greater gap between the developed and the less developed counties, more disparity between the rich and the poor, etc. In this vacuum LED became a viable alternative which intends to solve the problem of local job creation, inclusion of the disadvantaged groups in the communities, ensuring environmental safety nets, improving the welfare of the people within the lower echelon incomes and the participation of communities as a whole in directing their own economic, social and political destiny (Canzanelli, October 2001: p. 4 and Catenacci, December 2003: p.12).
Achieving these objectives is not without its own limitations, which has provoked scholars and researchers to explore this area of studies. This in effect, takes us to the problem question which we seek to examine in this report. Why, despite the emergence of Local Economic Development in the Republic of South Africa, are localities unable to exploit their economic resources sufficiently to enable them overcome poverty at local level?
The challenges of these localities are that of transforming their available economic opportunities for their own prosperity thus eradicating poverty. How tenable the LED approach has been in overcoming poverty in the RSA is the focal point of this research. Therefore, this research work intends to tackle the notion of LED and its role in poverty alleviation. A detailed examination of this problem question exposes us to the ramifications of communities grappling with issues of overcoming poverty within localities in SA through LED programmes.

CHAPTER 2: METHODOLOGY

LED in Sub-Saharan Africa is considered as an economic possibility to strengthen the capacities of communities laying emphasis on local needs and local resources. It focuses on community’s competitive advantage as a means to identify new opportunities, create jobs, income and develop local infrastructure. In this light, this research work will strive to present the research design which seeks to investigate the research question.

2.1: Research Design

Arguments on how to strengthen the economic capacities of localities in order to alleviate poverty vary according to the different theoretical views. Therefore, it may be possible to identify several economic development programmes in various countries, that each stresses on different solutions to achieve poverty alleviation through economic improvement. Instead of taking the overall perspectives on how different economic development programmes attempt to alleviate poverty, our problem formulation focuses on only one specific economic development programme in one country, that is, LED in South Africa. Thus it is the research problem and the research objectives that determine the type of research design which will be used in this project (de Vaus, 2001: p. 220).

2.1.1: Case Study Research Design

A case study research design will be used for this project because the research deals with a particular case study as the unit of analysis from which information is collected i.e. the Republic of South Africa (de Vaus, 2001: p. 220). The object of study (LED and poverty alleviation) will be examined within the explanatory case study.

2.1.2: Explanatory, Clinical Case Study Design

Here, this case study seeks to achieve both a more complex and fuller explanation of LED in South Africa. It seeks to achieve this through the narrow or idiographic explanations as well as the nomothetic (fuller) explanations of LED and poverty as spelled out in the problem question within this research (de Vaus, 2001: p. 221 - 233). This will not only give us the narrower explanation but also a full explanation of LED and poverty in South Africa.
Furthermore, this project will examine the case as a whole (holistic), which is LED and poverty in the Republic of South Africa and a case as consisting of various levels or components (embedded units), that is, background of LED in SA, the developmental local government, the urban LED case study and the rural LED case study in South Africa. This will enable the research to build a much fuller and a different picture of LED and poverty by incorporating the experiences and perspectives of these factors as subunits. It is imperative to avoid examining a specific constituent element (embedded unit) of LED and poverty because the other embedded units will build up a extensive or extended picture of the case by taking into account the information gained from the other levels – holistic or the case as a whole. By so doing, the final case study will tell us something different from what LED and poverty in South Africa if looked from just one embedded (Ibid, p.220).

2.1.3: The use of Theories in Case Study research Design

De Vaus presents three different ways of performing a research study based on a case (de Vaus, 2001: p. 221). Firstly, a theoretical dimension can be used as a testing mechanism in which case the purpose of this design is to see whether the theory can be supported in a real life situation. In contrast to this stand is the theory-building research design, where cases are selected to develop and refine propositions. The purpose is therefore to test and develop a theory that fits the case (Ibid, p. 223). The difference between the two is that the former begins by setting out specific propositions and testing them against the real world situation. The latter begins with questions and basic propositions and then looks at real world cases in order to end up with a more explicit theory. The third research design is a clinical case study; in this design the locus or area of attention is the case itself. The clinical case study gathers information in order to build up a complete picture of what is happening in the case. The goal of the clinical case study is to understand a case with the purpose of solving a problem. The purpose is not to test or develop theories but to use existing theories to understand and explain what is going on in the case. This is an inductive theoretical approach, where the question raised in the problem formulation acts a starting point, and the case is examined in the light of the question (Ibid).
In this research project, a clinical case study design will be used to examine why despite the introduction of LED in South Africa, communities are unable to make use of the available resources in order to alleviate poverty. The project will make use of three different theoretical perspectives, which can be used to understand LED and poverty alleviation. This will enable us to identify different important aspects to be taken into consideration when assessing poverty alleviation. The identification of theoretical assumptions allows us to assess the ways to alleviate poverty at different levels as defined by the theories. Finally, this multi layered understanding in a holistic perspective will provide the answer to the problem formulation.