South Africa’s Local Economic Development Agencies have emerged as appropriate institutional structures for advancing socio-economic development in the local government-led development landscape, due to the inability of local municipalities to lead local economic development. This shift signifies that South Africa is turning to local economic development strategies to address developmental challenges, such as poor socio-economic conditions (unemployment, poverty and inequality), by creating local development solutions and employment opportunities. This article utilises the developmental state theory to examine the role of Local Economic Development Agencies in South Africa’s aspirations of becoming a capable developmental state. While the developmental state literature is concerned with the central role of the state in economic development, this article extends the developmental state theory to the subnational level by arguing that the developmental local government is the local developmental state. In addition, the article locates Local Economic Development Agencies within the developmental state paradigm by showing that Local Economic Development Agencies were established as economic development coordinators at the subnational level to assist local government in addressing South Africa’s triple challenges. Although the roles and functions of South African Local Economic Development Agencies are aligned to the developmental state ideology, their developmental mandate is undermined by the lack of coordination within local institutions.
The role of local economic development agencies and nonprofit organisations in local economic development: South African case studies