Local Economic Development

923 Words4 Pages
Introduction The Local Economic Development (LED) became popular in the 1990s in many developing countries. However, various forms of it were already implemented many years earlier by industrialised countries. With the newly elected democratic government of South Africa in 1994, came the raise of a new vision for development and the return to the global economy. The economy was exposed to both globalisation and localisation. The concept of Local Economic Development (LED) was adopted and introduced to various planning and development aspects. The concept attracted a lot of attention in the governmental spheres and policy makers. It has influenced planning, development and policy making which has become an explicit priority in government today.…show more content…
The practice of LED and understanding local economies is a constantly evolving process. One of the latest concepts influencing LED is ‘New Institutionalism’. This concept distinguishes between society and economy functions. It shows the relationship of how economic decision-making and action influences and shapes of the formal and informal institutions of society based on norms, values, rules (procedures) and beliefs. Globalisation has touched South Africa extensively, influencing economic activity and thus causing a change between different operations of sectors. Post 1994, we found a shift towards local enterprises and entrepreneurship. This again bring us to relationship between local government, business and the community, which need to work together to create innovative and active roles in the growth of that local area (municipality). (Department of National and Local Government,…show more content…
Post 1994, great pressure has been place on the newly elected democratic national government to improve and introduce new way to achieve economic growth and alleviate poverty. LED plays a fundamental role in local government (through economic and social development) to achieve this and it is a ‘relatively’ new approach to development in South Africa. It is a strategy plan aimed at tackling poverty and unemployment and providing a “bottom-up” approach to economic development. Even though numerous policies and strategies have been put into places, very few success stories have been produced in the last two decades. This is due various reasons, like lack of capacity within the local government and resources constraints. In many case in South Africa the establishment of a relationship between businesses, government and civic society have not been successful. This relationship is essential for local governments to acquire necessary resources and networks. This is where the LED comes in. (Nel,

More about Local Economic Development

Open Document