Decentralisation in South Africa¶

Literature › Works

Martin Wittenberg (2003). Decentralisation in South Africa. Draft paper (first draft May 2003), ERSA / School of Economic and Business Sciences. University of the Witwatersrand.


Type	working paper
Scope	Wider apartheid literature
Method	synthesis review
Period studied	1910–2003
Regions	South Africa, Pietermaritzburg/Natal-KwaZulu, Transkei, Bophuthatswana, Venda and Ciskei (TBVC) homelands, KwaNdebele
Themes	bantustans removals influx, politics ideology elections, business and state, manufacturing industrial policy, labour markets wages, macro fiscal finance debt, resistance social movements, transition post apartheid, demography urbanisation
Citation key	`wittenberg2003a`

Argument¶

The paper argues that apartheid was a form of decentralisation designed to keep central control while fragmenting the African majority and reducing accountability to it. The institutional boundaries it created (homelands, administration boards, black local authorities, planning regions, Regional Services Councils) generated regional and local interests that shaped later politics. These include the Pietermaritzburg civil war and the compromises of the 1990s negotiations. The post-1994 system (provinces built on the planning regions, districts built on the RSCs, a German-style cooperative model with formula-driven equitable shares) therefore carries the apartheid inheritance. The author argues through a historical-institutional overview, a local case study and a preliminary assessment of post-apartheid fiscal and political arrangements, and he flags a centralising drift.

Evidence and method¶

Secondary literature (Hindson 1987, Christopher 1994, McCarthy 1992, Niehaus 2001, Kentridge 1990 and others), SAIRR surveys, National Treasury budget and fiscal reviews (2003 data), Bahl's work, newspaper reports (Weekly Mail & Guardian, Natal Witness), a secret 1990 government memo on the National Coordination Mechanism, and the author's earlier policy report (Wittenberg and McIntosh 1992) and participant knowledge as UDF Secretary. No original econometric work.

Place in the debates¶

Does decentralisation bring government closer to the people? (theory of decentralisation) (see Post-apartheid economic policy, governance and corruption). The paper holds that benefits depend on institutional design and the balance of forces rather than on any abstract case, and draws on Bardhan and Mookherjee on capture. Apartheid showed decentralisation used to reduce accountability.
Coherence of apartheid as a grand design versus a fragmented, contradictory and corrupt system (see Origins, coherence and ideology of apartheid and Afrikaner nationalism). The paper stresses that the fragmented structures required ever more coordinating layers and generated corruption, expense and unintended interdependence (commuting, migrant dependence). Decentralisation was fundamentally aimed at coercive control of Africans, and equitable partition was never politically feasible.
Centralism versus federalism in the transition (see Post-apartheid economic policy, governance and corruption). The paper sees the ANC's accommodation of regional interests and bantustan bureaucracies as shaped by the negotiating balance of forces. It notes a subsequent centralising drift through party discipline and national Treasury dominance.

Findings¶

Apartheid is framed as decentralisation aimed at reducing accountability to the African majority. (p. 4)

Indeed apartheid could be seen as form of decentralisation intended to reduce government’s accountability to the majority.
Post-1948 urban policy segmented the African labour market into settled urban workers, migrant labour for mines and others, and a residual population in the reserves. (p. 12)

there would be a small and settled urban African working class to service urban manufacturing and retail; a stratum of migratory labour to service South Africa’s mines
Influx control through Section Ten of the Urban Areas Act strictly limited African urban residence. (p. 13)

no African could remain in a municipal area for longer than 72 hours without permission.
The Native Services Levy funded township housing but also raised the cost of African labour, discouraging labour-intensive production in urban areas. (p. 13)

By making the employment of African labour more expensive, it discouraged labour intensive forms of production in the urban areas.
From 1971 Administration Boards took control of the townships and of labour bureaux, concentrating control over African access to cities. (p. 14)

So the Administation Boards controlled accommodation, employment and access to the cities.
The 1976 Soweto riots pushed the state toward giving townships municipal status as Black Local Authorities. (p. 14)

This quest for a solution gained greater urgency after the 1976 Soweto riots, which impressed on the central state the idea that urban blacks would need to be politically incorporated in some way.
The lack of an economic base for the bantustans was the central weakness of partition, and the state's industrial decentralisation began with border industrial areas. (p. 20)

The problem of the lack of an appropriate economic base for the bantustans was the Achilles Heel of the entire partition project.
The first border industrial sites were Hammarsdale, Rosslyn and Pietermaritzburg. (p. 20)

Initially three such sites were developed: Hammarsdale (between Pietermaritzburg and Durban), Rosslyn (near Pretoria) and Pietermaritzburg itself.
By the late 1970s, decentralisation was deepening bantustan dependence on migrant labour and transfers rather than fostering take-off. (p. 21)

there were many signs that these economies were becoming even more dependent on migrant labour and transfer payments.
Regional Services Councils, funded by business levies, were created in 1985 to finance bulk infrastructure for weak black local authorities. (p. 22)

The Regional Services Council Act of 1985 provided for the establishment of joint structures called Regional Services Councils (RSCs), between local authorities for the provision of bulk infrastructure.
During the 1980s unrest, the National Security Management System ran as a highly centralised parallel structure of state control. (p. 23)

Indeed the NSMS was run in an extremely centralised way.
The primary function of decentralisation under apartheid was coercive control of Africans, with corruption an inevitable by-product. (p. 25)

Since an equitable partition was never going to be entertained, the primary function of decentralisation was always going to be a more coercive one, viz. to maintain control over the African population.
In the negotiations the ANC saw regional government as a means of constraining the inherited national bureaucracy and co-opting bantustan leaders. (p. 32)

In short the ANC came to be of the view that a regional dispensation might be one way of reining in the national bureaucracy
South Africa's post-1994 system is highly fiscally decentralised by international comparison. (p. 38)

the share of subnational government never falls below 40% of the total.

Evidence ledger¶

Sources used¶

Source	Kind	Period	How used
National Treasury, Budget Review 2003 (provincial equitable share formula)	commission or official report	2003	Supplies the components and weights of the provincial equitable share formula and its description as indicative rather than earmarked.
National Treasury, Intergovernmental Fiscal Review 2003 (incl. Table 1.1, Division of Revenue 1999/00 to 2005/06)	official statistical series	1999/00-2005/06	Table 1 gives the vertical split of nationally raised revenue and shows trends in provincial and local shares; the Review is also cited for personnel spending, municipal debtors, rates revenue and audit outcomes.
National Treasury (1998), The introduction of an equitable share of nationally raised revenue for local government	commission or official report	1998, with 2003 budget allocations	Source for the local government equitable share formula and its components (S-grant, I-grant, free basic services, nodal, R293, guarantee).
National Treasury, Intergovernmental Fiscal Review 1999	commission or official report	1999	Describes the Intergovernmental Fiscal Relations Act process and the Public Finance Management Act, and gives personnel expenditure trends for 1997/98-1999/00.
Bahl (2001) cross-country calculation of expected subnational expenditure share	secondary literature compilation	c. 2001	Used to claim South Africa is fiscally more decentralised than expected (15.7% expected subnational share).
Bahl and Solomon (2000), evaluation of the Regional Services Council levy	secondary literature compilation	2000	Supplies findings on the incidence, compliance and revenue shares of RSC turnover levies.
Alderman et al. (2000) poverty map imputation using 1996 Census, 1995 Income and Expenditure Survey and October Household Surveys	household or labour survey microdata	1995-1996	Describes the imputed poverty estimates that feed the local equitable share formula and their weaknesses.
1996 national census, October Household Surveys and 1995 Income and Expenditure Survey	population census	1995-1996	Described as the new information base for poverty targeting after the old statistical system omitted the TBVC states and covered Africans poorly.
1985 census, as cited via Wills (1988)	population census	1985	Gives the White, Indian and Coloured population figures to illustrate the apartheid city's spatial division.
SAIRR Race Relations Survey 1976, 1988/89 and South Africa Survey 2001/02	newspapers periodicals	1976-2001	Cited for repression in Transkei (1976), the Bophuthatswana coup (1988), and municipal complaints about district councils (2001).
RSA (1990), Handleiding Nasionale Koordineringsmeganisme (secret government memo)	state archives	1990	Quoted to show security-force involvement persisted in the National Coordination Mechanism.
Wittenberg and McIntosh (1992), Local Government Policy Project report (unpublished)	secondary literature compilation	1992	Draws on this unpublished report for the account of regional structures (RDACs, NCM) and the earlier sections of the paper.
Christopher (1994), The Atlas of Apartheid	secondary literature compilation	1994	Source for details on Trust lands, consolidation, resettlement, border industries and the 42 RSCs.
Hindson (1987), Pass controls and the urban African proletariat	secondary literature compilation	1987	Source for the pass laws, labour bureaux, Section Ten rights and Native Services Levy description.
Legislation: Native Laws Amendment Act 1952, Urban Areas Act, Bantu Authorities Act 1951, Status of Transkei Act 1976, RSC Act 1985, Local Government Transition Act 1993, Municipal Structures Act 1998, IGFR Act 1997, PFMA 1999, 1996 Constitution	legislation gazette	1913-1999	Establishes the formal institutional architecture of decentralisation before and after 1994.
Weekly Mail & Guardian and Natal Witness newspaper reports 1997-2002	newspapers periodicals	1997-2002	Anecdotal evidence for corruption, patronage and provincial policy divergence in post-apartheid decentralisation.
Pietermaritzburg conflict literature and papers (Aitchison 1988 death counts; Kentridge 1990; Cross et al. 1988; Gwala 1988; Laband and Haswell 1988)	secondary literature compilation	1987-1990	Supplies death tolls, displacement figures and interpretive accounts for the Pietermaritzburg case study.

Inference¶

Quantification: Descriptive tables.

Historical-institutional narrative built on secondary literature and official documents, with a single-locality case study (Pietermaritzburg) and descriptive fiscal tables; theory is used as background, and the author says the assessment of the current system is preliminary and impressionistic, with no econometric testing.

Key claims¶

Claim	Basis	Strength
Apartheid decentralisation was designed to maintain central control, with the homeland and local structures fragmenting opposition and shifting responsibility for Africans away from the White state. (p. 24)	Synthesis of legislation and secondary literature (Hindson, Christopher, Niehaus, Forsyth); no primary quantitative data.	Illustrative or anecdotal
Administrative boundaries and differences in the micro-regulation of African settlements shaped the lines of the Pietermaritzburg conflict. (p. 31)	Case study drawing on Kentridge, Cross et al., Gwala and Aitchison, with a map and death counts from secondary sources.	Illustrative or anecdotal
The apartheid-era planning regions and Regional Services Councils became the basis of the post-1994 provinces and district councils. (p. 22)	Institutional narrative based on Christopher (1994), McCarthy and negotiation history, with no archival detail.	Asserted
South Africa is fiscally highly decentralised, with provinces receiving a very large share of non-interest national revenue, and the 2003 equitable share formulas are broadly redistributive. (p. 38)	Table 1 from National Treasury (2003b), Bahl (2001) and the National Treasury formula descriptions.	Systematic data
Poverty targeting in the local equitable share is hampered by weak data, since the imputation relied on an Income and Expenditure Survey that may mis-state provincial poverty. (p. 47)	Alderman et al. (2000) method, Wittenberg (2002) mimeo and the 1996 census and 1995 IES.	Partial data
The new system has weaknesses in local financial management, with widespread audit failures and large uncollected municipal debtor balances. (p. 44)	National Treasury (2003b) figures on Auditor General opinions and municipal debtors.	Systematic data
The district council layer is problematic and there is a centralising drift via ANC party control, with corruption and patronage appearing at subnational levels. (p. 45)	Newspaper reports, a SAIRR quote from the Msunduzi municipal manager, and the author's own impressions.	Illustrative or anecdotal

The author's caveats¶

The author states that the assessment of the post-1994 system is preliminary and impressionistic, and that careful econometric work has not been done. He also notes that the poverty estimates behind the equitable share may be biased, that the system is in constant flux, that the unpublished source report is not available, and that his own role in the UDF and in transfer system design may colour the account.

Gaps in the evidence¶

The argument relies mostly on secondary literature and press reports, with no archival work on Cape Town, homeland or Administration Board finances, or on the negotiation records. Municipal- and provincial-level panel data on transfers, spending and service delivery, which Treasury and Statistics South Africa data could supply, would permit systematic tests of the claims about efficiency, patronage and poverty targeting. Quantified evidence on how boundaries shaped violence (event-level death data by administrative area) existed in contemporary monitoring records and is not used systematically.

Replicability: Data poorly documented.