A striking feature of local government reform in many Commonwealth countries has been a heavy reliance on structural reform, often in the form of forced local council amalgamation. This paper argues that the long-run success of structural change in local government hinges on several key factors, not least that voluntary rather than compulsory council mergers have a far greater chance of success. A second key ingredient resides in a high degree of local autonomy in both the composition and operation of decentralized governmental functions. A third vital factor lies in ensuring that revenue and tax assignment is sufficient to provide local government with financial autonomy. Finally, adequate powers of taxation need to be accorded to local government and this requires careful consideration of the types of taxes most suited to local government.

This paper provides a brief introduction to the recent history of, as well as the legal and policy framework for, local government in South Africa. It discusses the transformation of local government from a racially configured, illegitimate arm of the apartheid government into a system designed to produce developmentally oriented municipalities. The progress made by South African municipalities towards realising the vision of developmental local government is remarkable and unprecedented. Over the last 13 years, municipalities have embarked on the extension of infrastructure and development, whilst absorbing fundamental changes to their internal governance and management arrangements, financial management systems and intergovernmental responsibilities. The new local government system offers great potential for the realisation of a better life for all citizens, facilitated by a new generation of municipalities. However, the challenges remain huge and some of these can be attributed to institutional fault lines. These include challenges that come with large, inclusive municipalities, new executive systems and the political appointment of senior officials. The paper also identifies the downside of overzealous institutionalisation of community participation. With regard to intergovernmental relations, the paper highlights the need for a clearer definition of local government mandates and a greater recognition of the role of big cities. The current insistence on comprehensive intergovernmental alignment of policies and budgets is questioned, and suggestions are made to substitute this with an approach of selective alignment around key national priorities.

This is a rich collection of case studies and will be valuable to anyone seeking a wide range of examples of local governance and decentralisation in developing countries. It covers Indonesia, India (Kerala and Karnataka), Sri Lanka, Uganda, South Africa and Ghana. With the exception of Sri Lanka, all the countries have two chapters devoted to them by different authors, thus providing a broader perspective on both the context of decentralisation and research findings.

Various forms of decentralization are recently pursued in the world, including developing countries. However, there has not been a coherent framework to access these intended outcomes generated by decentralization measures implemented in Asian and African countries. This book provides such a framework based on comparative analyses of different experiences of decentralization measures in six developing countries, where the policy rationale to “bring services closer to people” originated in different socio-political backgrounds. Although decentralization measures are potentially useful for attaining both political democratization and economic efficiency, what is often packaged under the umbrella of “decentralization” needs to be disaggregated analytically. Successful reforms need coherent approaches in which a range of stakeholders would become willing to share responsibilities and resources in order to achieve the ultimate outcome of poverty reduction in the developing countries.