The relationship between the creation of an enabling environment and economic development: a comparative analysis of management at local government sphere

Abstract

The facilitation and creation of an enabling environment by local government for business to prosper is one of the key factors in local economic development (LED). In this creation of an enabling environment, effective service delivery by local government is important. Local government can create this environment through good governance and transparent management. Globally however, many local governments are struggling to provide an acceptable level of management and service delivery to their communities. The study has the aim to test the hypothesis of the creation of an enabling environment leads to economic development. The geographical focus of this study is on the Vaal-Triangle region in Southern Gauteng, South Africa. The study will focus on two local municipalities namely Midvaal Local Municipality and Emfuleni Local Municipality, situated in Gauteng. The perceptions of business owners regarding the creation of an enabling environment and service delivery within this area will be analysed. A total of 150 business owners were interviewed using a quantitative questionnaire. Data were statistically analysed through descriptive analysis. The results revealed that effective municipal management relates to the creation of an enabling environment for local businesses to prosper and in turn translate to economic development. In contrast poor municipal management leads to poor service delivery and a lack of economic development.