One-size-fits-all local government is failing South Africa

South Africa needs to radically rethink its system of local government, says a new study from the Institute of Race Relations (IRR).

The study, Local government: crises decades in the making and how to deal with them, by Projects and Publications Manager Terence Corrigan, argues that South Africa’s model of wall-to-wall municipalities with extensive developmental mandates has shown itself to be no longer fit for purpose.

Municipalities differ enormously in their economic foundation, institutional capacity, revenue-raising potential, infrastructure needs and the functions they are capable of performing.

Yet the system has imposed broadly uniform responsibilities and institutional arrangements on them. This was never realistic and, with the benefit of close to three decades of experience, it is apparent that the system – and not only individual municipalities – needs fixing.

“Local government has run up against some of its inevitable structural limitations,” Corrigan argues.

“Scholarship on the municipal malaise has for years warned that one size does not fit all, and therefore solutions need to recognise the enormous diversity of the conditions under which individual municipalities exist and function – or fail to function. The municipal system was based on an assumption that substantive standardisation is possible, and that a level of viability can be attained. It is hard to sustain that view now.”

The paper notes that some municipalities have a substantial economy, a strong revenue base and a professional administration, while others operate in areas with limited economic activity, weak revenue sources and severe shortages of skills.

Expecting all of them to perform the same functions under the same institutional model creates unrealistic expectations and can entrench failure. Some municipalities, in other words, are inherently and structurally unviable.

The key to a successful reform programme is institutional differentiation: municipal powers, responsibilities and fiscal autonomy should be structured according to the circumstances and capacity of individual municipalities.

This supports the principle of “form follows function”, and by extension, of finance doing so as well: municipalities should not be assigned responsibilities without the resources and capacity required to perform them.

South Africa urgently needs functional cities. These are essential for economic activity and for any prospect of getting South Africa out of the economic malaise it finds itself in. Smaller jurisdictions need to be assessed for their functionality. Some are failing because of misgovernance, but have the potential to be viable, and should be given support to become so.

Others – lacking a rates base, skills and municipal expertise, and a sufficient local economy – need to be reconsidered, possibly abolished.

“A revised local government system,” Corrigan argues, “has to match responsibilities and resources to local circumstances and create incentives for municipalities to generate and collect their own revenue.”

The study also points to the damaging effects of politicisation within local government administrations, arguing that it has eroded their ability to operate professionally and effectively. This is a problem throughout South Africa’s public sector, but both the political culture and the prevailing institutional design have made local government particularly vulnerable to it.

It is absolutely imperative to step away from this. Political leaders need to set policy and exercise democratic oversight, but the failure to build professional local bureaucracies is an existential issue. Stepping away from this pathology will require political commitment, which is uncertain at this point.

This study was produced with the generous support of the Konrad Adenauer Stiftung.

Media contact: Terence Corrigan IRR projects and publications manager Tel: 066 470 4456 Email: terence@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za