Background discussion for Commonwealth Local Government Conference 2015.  CLGF commissioned two “thinkpieces” Local government 2030 achieving the vision – the role of local democracy and good governance and Local government 2030 achieving the vision – the importance of local government in economic development and cities as engines of economic growth. 

This paper discusses network governance and its contribution to the capacity of local governments (LGs) to deliver local economic development (LED) in Uganda. Although a formal LED policy was only established in Uganda in February 2014, there have been LED-inspired practices in the past decade. Various scholars and practitioners have observed that the autonomy and capacity of LGs to deliver LED is limited, but have been hopeful that new governance strategies like network governance would increase the capacities of LGs. However, neither network governance arrangements among LGs, nor their potential to improve governance capacity, have been documented. In a case study of Kyenjojo District, this paper finds that existing network governance arrangements have been fundamental in improving financial autonomy at this LG, delivering some income to invest in LED activities, although no evidence was found of reduced transaction costs in transforming local economies. The study further reveals that network governance arrangements have not led to the development of specialised skills in regulation or law enforcement, and capacity gaps are evident amongst staff and members in understanding the private sector and how it works. On a positive note, there is clear evidence of attempts by the LG to be innovative. Based on these findings, this study recommends that LGs need to consider a multi-pronged or multi-network governance approach to LED, which in turn will require a refocusing of governance mechanisms to become more dynamic and responsive, and offer incentives to the various actors in the development sector.