n Africa Insight - The impact of market-friendly policies in the Eastern Cape municipalities

Volume 44, Issue 3
  • ISSN : 0256-2804


This article examines the impact of market-friendly policies such as the privatisation of water provision, broad-based black economic empowerment (B-BBEE) and public-private partnerships (PPPs) at local government level in two metropolitan centres in the Eastern Cape province. At a methodological level, the researchers have employed both quantitative and qualitative approaches to answer the central research question, which is: Do the PPPs and B-BBEE ventures that constitute anti-poverty strategies within local economic development (LED) succeed in addressing the issue of poverty and achieving more equitable development at the municipal level in the Eastern Cape? The findings of the investigation indicate that, rather, these 'business-friendly' policies, which are seen to contain a mix of neo-liberally inspired and patrimonial elements, result in the allocation of state resources to politically influential individuals and foster a corrupt symbiotic relationship between entrepreneurs and the political elites, and therefore fail in their most important task, which is meant to be the development of local communities. However, it must be noted that the allocation of state resources to business and political elites with strong networks is not confined to neo-liberalism. For instance, fascist states also have a similar political and economic arrangement that benefits politically well-connected individuals at the expense of the poor. The researchers recommend that the privatisation of services or PPPs should be replaced by a strong local state that takes responsibility for rendering services itself, based on the premise that development should be driven by a strong local state rather than by market forces however, this does not mean that the local state should be kept out of the market.

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