"Supporting Municipalities for Local Economic Development" - how does Local Government stimulate LED?

Local government has various means of stimulating local economic development. First, the municipal functions of service delivery and infrastructure provision can be undertaken in a manner that supports LED. For example, efficient, effective, responsive and well integrated infrastructure can stimulate the development and expansion of large and small enterprises within a locality. Secondly, the manner in which the municipality carries out its business can impact on LED. For example, a municipality that efficiently processes development applications and adopts affirmative procurement policies can stimulate SME development. Thirdly, a municipality can support LED through providing direct and indirect economic services. Examples of these are:

• provision of business facilities
• promotion of agro industry
• support to tourism initiatives and
• human resource development programmes.

Local government has a further responsibility when stimulating and promoting local economic development. That responsibility is to take forward the broader agendas of government: those of

• job creation
• poverty alleviation
• redistribution

This implies that the local government has to consider the impact of the LED strategies it adopts. LED Fund projects, therefore, are not simply concerned with brick and mortar but with the ongoing impact of the projects to the quality of life of the poor within the community.

A function of Local Government is to promote economic development. The challenge is to generate innovative responses that will result in improved access to the formal economy by the poor."

Source: "Planning and Implementation Management Support System" PIMSS. 
This document also describes in detail how local governments can arrive at operational development strategies by using a participatory, strategic and implementation-oriented planning process, called the Integrated Development Planning (IDP) approach.

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