Financial and fiscal facilitation of developmental local government in South Africa

Heese, Karen

Financial and fiscal facilitation of developmental local government in South Africa

Master Thesis

2000

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

Local government in South Africa is mandated with the delivery of basic services. This responsibility reflects the evolving role and status of subnational governments across the world. In South Africa, local government policy is underpinned by a developmental vision. The vast backlog of infrastructure that apartheid entrenched requires that considerable financial resources facilitate basic service delivery. In many other countries, inter-governmental transfers account for a far larger portion of municipal revenue than in South Africa where financial capacity is broadly assumed to be sufficient for expenditure needs. This is an inequitable assumption - for communities that do not have substantial revenue bases the current fiscal and financial system undermines equalised service delivery. Inter-governmental relations therefore require revision if municipalities are to address socio-economic inequities. Fiscal options to facilitate developmental government include a greater transfer of resources to local government, or, if the constraints of the fiscus inhibit this, transfers that primarily focus on equalisation. If this restructuring does not occur, local government will not have the financial means to ensure that decentralisation implies the optimal mechanism for development - improved financial and fiscal facilitation of developmental local government is therefore imperative.

Description

Includes bibliographical references.

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