Accommodating Diversity or Imposing Uniformity? The Hollowing Out of Provincial Governments in South Africa

The creation of the nine South African provincial governments was a concession by the African National Congress (ANC) to the National Party (NP) regime during the negotiated transition to democracy. The ANC favored a strong national government and strong local government, while the NP saw provinces as a vehicle for protection of White minority rights and privileges. While playing an important peace building function, provinces were endowed by the 1996 Constitution with few exclusive functions and negligible own revenue raising powers, therefore largely reliant on intergovernmental grants from national government. These already limited provincial powers have been further attenuated over the last two decades by the relocation of functions (e.g., social security and training and vocational colleges to national government, housing and public transport to large metropolitan governments, the proposed National Health Insurance system which will centralize current provincial health functions). This is exacerbated by centralized wage bargaining resulting in provincial wage bill escalation outstripping increases in intergovernmental grants and crowded out other non-wage expenditures. Provincial governments have little control over their largest cost driver which introduces budgetary rigidities. The highly centralized application of intergovernmental relations has limited scope for provincial experimentation and innovation.