The impact of socioeconomic factors on municipal fiscal health in South Africa

Date
2022-04
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH SUMMARY: Municipal fiscal health and the measurement thereof has become a concern for governments and public administrators across the world. Significant episodes of fiscal stress experienced by the City of New York and Detroit in the 1970s and 1980s, as well as the global financial crisis in 2008, inspired a plethora of research into the topic. Since then, several approaches and methodologies have been developed by public finance experts, academics and practitioners on how local government fiscal health can be better measured and even predicted to avert potential fiscal crises. Despite there being no uniform definition of local government fiscal health after four decades of research into the topic, there is consensus that local government fiscal health is a multidimensional concept related to the fields of economics, public administration, public finance, accounting, planning, political science and sociology. There are thus different ways in which local government fiscal health can be measured and understood. Relying dogmatically on any one measurement system limits the ability to understand some of the other causes that may underlie the poor fiscal health of a local government institution. In South Africa, many municipalities are in crisis and despite the urgency of the situation and the myriad of reports capturing symptoms of fiscal distress, comparatively little is known about the underlying root causes from a structural and systemic perspective. In this research study, the researcher uses factor analysis to better understand how structural factors observed through a selection of practical and theoretically relevant socioeconomic variables impact the fiscal health of municipalities. This is particularly important within the context of South African local government given the country’s history of oppressive policies that have impacted the spatial, social, economic and financial landscape. To what extent are these structural issues still impeding the progress of municipalities in South Africa?
AFRIKAANSE OPSOMMING: Munisipale fiskale gesondheid en die meting daarvan het ’n bekommernis vir regerings en openbare administrateurs regoor die wêreld geword. Beduidende voorvalle van fiskale stres wat die stede New York en Detroit in die 1970's en 1980's ervaar het, sowel as die wêreldwye finansiële krisis in 2008, het ’n oorvloed navorsing oor die onderwerp meegebring. Sedertdien is verskeie benaderings en metodologieë ontwikkel deur kenners van openbare finansies, akademici en praktisyns oor hoe plaaslike regerings fiskale gesondheid beter kan meet en selfs voorspel om potensiële fiskale krisisse te voorkom. Ten spyte daarvan dat daar geen eenvormige definisie van plaaslike regering fiskale gesondheid ná vier dekades se navorsing oor die onderwerp is nie, is daar konsensus dat plaaslike regering fiskale gesondheid ’n multidimensionele konsep is wat met die vakgebiede van ekonomie, publieke administrasie, publieke finansies, rekeningkunde, beplanning, politieke wetenskap en sosiologie verband hou. Daar is dus verskillende maniere waarop plaaslike regering fiskale gesondheid gemeet en verstaan kan word. Om dogmaties op enige meetstelsel te vertrou, beperk die vermoë om sommige van die ander oorsake te verstaan wat onderliggend aan die swak fiskale gesondheid van ’n plaaslike regeringsinstelling kan wees. Baie munisipaliteite in Suid-Afrika is in ’n krisis en ten spyte van die dringendheid van die situasie en die magdom verslae wat simptome van fiskale nood vasvang, is daar vanuit 'n strukturele en sistemiese perspektief relatief min oor die onderliggende grondoorsake bekend. In hierdie navorsingstudie gebruik die navorser faktoranalise om beter te verstaan hoe strukturele faktore waargeneem deur ’n seleksie van praktiese en teoreties relevante sosio-ekonomiese veranderlikes die fiskale gesondheid van munisipaliteite beïnvloed. Dit is veral belangrik binne die konteks van Suid-Afrika se plaaslike regering gegewe die land se geskiedenis van onderdrukkende beleid wat die ruimtelike, maatskaplike, ekonomiese en finansiële landskap beïnvloed het. In watter mate belemmer hierdie strukturele kwessies steeds die vooruitgang van munisipaliteite in Suid-Afrika?
Description
Thesis (MPA)--Stellenbosch University, 2022.
Keywords
Fiscal policy -- South Africa, Municipal finance -- Management -- South Africa, Government spending policy -- South Africa, Municipal services -- Economic aspects -- South Africa, UCTD
Citation