Ease of Doing Business in Local Government: Push and Pull Factors for Business Investment in Selected South African Municipalities

Abstract

Ease of doing business with municipalities and within municipal areas refers to the simplicity, effortlessness, and extent to which private enterprises can establish and conduct their business. It is influenced by multiple factors such as the conduciveness of the statutory and regulatory framework and the effectiveness of municipal structures and processes, in order to reduce bureaucratic red tape for the simplification of administrative processes such as the registration of business property, the issuing of permits, and access to electricity. Municipalities thus play a significant role in attracting and retaining business investment by establishing a conducive climate for business growth and local economic development. The aim of this article was to analyze the findings of a survey that was conducted to pinpoint business investment pull and push factors in selected municipalities in South Africa. By means of semi-structured interviews, a survey was undertaken with seven target groups. The obtained data were then triangulated with a desktop analysis of sampled businesses (i.e., case studies) that had relocated, mainly due to municipal service delivery failures. The survey revealed the underlying factors that lead to ease of doing business weaknesses, uncovered winning strategies to attract business investment, and proposed measures to enhance municipal business retention praxis.