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==Definitions for local economic development==
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==Approach==
There are two broad approaches to LED. One is about developing a strategy for a ___location, mainly through planning. This is often the preferred approach by international development organisations and governments in developing countries.<ref name=":0" /> The other approach is a more iterative approach where local stakeholders jointly learn about what is possible in the local context. In this approach a broad range of private and public stakeholders cooperate to improve local conditions to create jobs and local wealth.<ref>{{Cite journal |last1=Cunningham |first1=Shawn |last2=Meyer-Stamer |first2=Jörg |date=2006-06-30 |title=Planning or doing local economic development? Problems with the orthodox approach to LED |url=http://www.ajol.info/index.php/ai/article/view/22449 |journal=Africa Insight |volume=35 |issue=4 |doi=10.4314/ai.v35i4.22449 |issn=1995-641X|url-access=subscription }}</ref>
According to the ILO, national and local governments, as well as enterprises and other organisations have to rethink development strategies to cope with ongoing events such as [[globalization]]. In contrast to traditional development policies, local economic development strategies promote local dialogue and enable people to be more proactive; help to make local institutions better contribute to development; make economic activity dependent on the comparative advantages of a specific territory, generating development by firms more capable to withstand changes in the global economic environment rather than top-down development imposed by national planners.<ref>{{Cite web |date=2011-02-14 |title=Local Economic Development (LED) |url=http://www.ilo.org/empent/areas/WCMS_093862/lang--en/index.htm |access-date=2023-12-30 |website=[[International Labour Organization]] |language=en}}</ref> Economic development activities in developing countries tend to be unidisciplinary, initiated and implemented by just one ministry or agency. An advantage of LED approaches is that they facilitate a multidisciplinary approach. [[South Africa]] has been particularly active in promoting the concept.<ref>{{Cite journal |title=Local Economic Development in South African Municipalities: Prospects and Challenges |url=https://journals.co.za/doi/10.31920/2634-3649/2023/sin2a9 |journal=African Journal of Development Studies |volume=2023 |issue=si2|doi=<!-- --> |hdl=31920/2634-3649/2023/sin2a9 }}</ref>
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===LED in South Africa: pro-poor vs. pro-growth===
Many LED interventions in South Africa have taken a direct pro-poor intervention, leading to questions regarding whether this approach is more effective in terms of poverty relief than the spin-offs of more pro-growth focused endeavours. The Microeconomic Reform Strategy is a central component of the 2005 policy guidelines for implementing LED in South Africa.<ref name="World Bank-Netherlands Partnership Program 2005">World Bank-Netherlands Partnership Program (BNPP), 2005. "Investigation of Pro-Poor Local Economic Development in South Africa."</ref> This strategy seeks to address the inequalities in the country and to build on the RDP (Reconstruction and Development Program), by focusing on issues of the geographical spread of activity, integration, black economic empowerment, knowledge-led growth, skills development and state responsiveness.
In addition to the laws and policies directly supporting and encouraging pro-poor
LED, other instruments, such as
====Integrated
In terms of what an '
* The municipal council's vision for the long-term development of the municipality. Special emphasis is to be placed on the municipality's most critical development needs
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* The council's spatial development framework, which should guide the way in which the physical area will be developed
It is suggested that IDP can assist in the promotion of socio-economic development in at least three ways; first, in helping to attract funds from other spheres of government, donor organisations and investors through defining and packaging attractive projects and programmes; secondly in helping to create an environment that is conducive to private sector investment and the general promotion of LED; and thirdly, by proposing direct interventions in the economy through, for example, providing incentives, developing economic infrastructure, and buying, developing and leasing/selling land.<ref
====Public participation====
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There is entrenched policy support for pro-poor development in South Africa – often being the primary focus of municipal vision/mission statements. In many cases it is treated as the partner of pro-growth/economic growth interventions. This situation is to be welcomed and reflects both local imperatives and responsiveness and local adherence to nationally identified objectives.
Given the dual challenges faced by South African society of needing to address both [[chronic poverty]], yet also to achieve economic growth and global competitiveness, from a policy perspective it would seem that the approach adopted by Mangaung, Cape Town and eThekwini is most appropriate. These municipalities took a middle of the road approach, focusing their LED strategy on addressing both issues of poverty and growth and the fundamental linkages between the two (World Bank, 2005, 75).<ref
These case studies show that pro-poor, community-based initiatives that are market linked, providing a viable product and operating in an economically effective fashion, can help disadvantaged community members to effectively participate in the market economy. Similarly, community-based service provision and labour-intensive employment is an effective mechanisms to extend services and create employment and business opportunities for the poor (World Bank, 2005, 78).<ref
====Land-use planning for LED====
[[Land-use planning]] and development control serve as measurable tools for LED. The assignment of property rights in land and third party enforcement are essential for the efficient operation of markets. Public intervention ensures the separation of incompatible land-uses, integrated planning and development of synergistic land uses, and the 'public goods' aspect of necessary public facilities, open space and infrastructure investment (Lai, 1994, 78-80).<ref name="LAI WAI CHUNG 1994">LAI WAI CHUNG, L. (1994), 'The eco- nomics of zoning: a literature review and analysis of the work of Coase', Town Planning Review, 65, 77-98.</ref> Land use planning and development control are essential for the existence and operation of land and property markets (Alexander, 48).<ref>A Transaction-Cost Theory of Land Use Planning and Development Control: Towards the Institutional Analysis of Public Planning E. R. Alexander The Town Planning Review
The following are a list of public land use and development controls that the Ontario Ministry of Municipal Affairs and Housing lists as useful methods in promoting economic development.<ref>Ontario Municipal Affairs and Housing. "Municipal and Financial Tools for Economic Development Handbook".</ref>
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