Academic journal article Economics & Sociology

Measurement of the Enabling Development Environment: A Comparative Study in a Developing Region

Academic journal article Economics & Sociology

Measurement of the Enabling Development Environment: A Comparative Study in a Developing Region

Article excerpt

Introduction

In recent years, South Africa has witnessed an upsurge in the total number of violent protests regarding services' delivery across the country, people are mostly distressed with the very slow pace of services' delivery (Mashamaite, 2014). Local governments in South Africa are under enormous pressure to deliver basic services to communities (Rogerson, 2010). According to (Sebugwo, 2011), low levels of municipalities' capacity to deliver basic services has resulted in most protests. In an effort to deal with the needs of impoverished communities, various pro-poor policies and tools such as the integrated development plan (IDP) and local economic development (LED) have been formulated (Mashamaite, 2014). However, there is still widespread poverty that is linked to the lack of basic services' delivery, as well as poor socioeconomic conditions in various local economies. On the global scale, the United Nations Development Prgramme (UNDP) has replaced its Millennium Development Goals (MDGs) with the Sustainable Development Goals (SDGs). The SDG's includes social, economic and environmental aspects (Dlamani, 2016). South Africa is a partner in the implementation of these goals and any analysis of the enabling environment should take into account these goals.

The efficient delivery of basic services is important for any local region to prosper. The Local Economic Development (LED) may be seen as an approach of deliberate intervention by local government to promote sustainable development within a local economy (Leigh & Blakely, 2013; Streimikiene et al., 2016; Lizińska et al., 2017). Bartik (2003) states that LED is defined as the overall increase in the local economy's capacity to increase wealth for its residents. Local government is regarded as the main facilitator of LED (Shah & Shah, 2009). Given that South Africa faces numerous socioeconomic and structural problems, LED seeks to utilise the potential of areas so that to stimulate local economic systems to improve their economic environments. The local business sector is seen as one of the greatest assets for any local economy since it is creating the foundation for economic development (Huggins et al., 2014). It is the first priority of any region to retain and attract firms as well as to facilitate sustainable living standards for local citizens (Huggins et al., 2014). Hindson and Meyer-Stamer (2007) state that as soon as the business environment improves, it will have a significant impact on local economic development (LED).

South Africa is currently facing numerous socioeconomic, political and macroeconomic problems, all of which influence economic growth in a negative way. Some of these problems include poverty, inequality and unemployment (Bexter, 2013; Shuaibu & Oladayo, 2016). One approach in addressing these various problems by the acting government of South Africa is the expansion of business activities and creationg of an enabling environment for the local businesses to prosper (Meyer et al., 2016a, b). The main objective of such an enabling environment is the creation of a framework which enables businesses to launch, develop and thus generate more jobs (ILO, 2014). The enabling environment is thus very important as it enables businesses to grow and sustain in terms of improved efficiency of their production with the direct help and assistance of local governments and other relevant community stakeholders (Bocken, 2014).

The Sedibeng District Municipality was selected as the study area in our case. It is situated at the southern section of the Gauteng province. The reason for the selection of the Sedibeng District Municipality is due to numerous protests and strikes that have taken place in the past few years, and the fact that the researchers are located in this region (this fact is thus leading to significant cost savings). The research process included various aspects of regional economic development and LED in the South African context. …

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