Economic Governance and the Local Business Environment: Evidence from Two Economically Lagging Provinces of South Africa

The improvement of local business environments in order to provide more favorable conditions for private sector development represents a critical policy intervention for strengthening local economic development planning. This article reports the findings of a participatory assessment tool which was developed to assess changes in the business environment between 2006 and 2009 for 16 local municipalities in South Africa's Eastern Cape and Mpumalanga provinces. It is shown that while a general improvement is recorded in the overall quality of local business environments across surveyed municipalities, in many cases the improvement is marginal. This points to a need for sustained intervention and support in order to achieve necessary improvements in the local business environments within these two poor provinces of South Africa.