Public service delivery and private firms in South Africa : perceptions and possible impacts

Abstract

Since the advent of democracy in 1994, the South African Government has accomplished greater economic growth, a reduction in the fiscal deficit, lower inflation as well as tax relief for corporates and individuals. Regardless of these accomplishments, South Africa as a country is still struggling with a number of difficulties, including high unemployment, unequal income distributions as well as extreme poverty and crime. To overcome these problems, the majority of studies show that sustainable job creation is essential. It is the responsibility of the Government to take active steps that will guarantee favourable economic and social conditions through which employment opportunities can be created. Part of these steps that the government can take, and has been taking, is the provision of public goods and services, specifically the provision of infrastructure, which has been seen as key to creating an environment conducive to growth and development. The issue of service delivery in the academic literature and popular press is focussed on households and delivery of basic services, while limited research has been done on the level of firms and basic service delivery. This dissertation aims to reduce this gap in literature. By means of Principal Component Analysis, public service delivery indicators are computed, highlighting the factors that make up aggregate service delivery to the firms in the 2007 World Bank Enterprise survey data. This dissertation was successful in computing these factors and determining whether the situation differs between four metropolitan cities in South Africa (Cape Town, Durban, Port Elizabeth and the greater Gauteng area) and whether firm size play a role.