Vertical Decentralisation and Urban Service Delivery in South Africa: Does Politics Matter?

Focusing on the case of South Africa, this study examines how decentralisation policies and inter‐party politics have affected urban service‐delivery responsibilities and resources. Service delivery does not appear to be worse off in Cape Town than in Johannesburg, even though the former is controlled by the opposition Democratic Alliance. While there have been political attempts to undermine the authority of its officials, the fiscal elements are protected by a relatively strong and well‐managed department of finance. Consequently, both donors and the national government steer money towards Cape Town because they know it can deliver on its obligations.


Introduction
Although there is a global tendency towards greater decentralisation to local government, African countries still tend to be comparatively quite centralised. South Africa, however, is a notable exception to this trend, and the 1996 Constitution made provision for strong decentralisation of powers and functions to local government. This decentralised framework has given considerable responsibility to South African cities for dealing with the challenges of rapid urbanisation. Indeed, South African cities face major developmental challenges, given the massive backlog of urban infrastructure needed in the black areas neglected under apartheid. In the absence of appropriate approaches to development and urbanisation in general, this manifests itself in various forms of rapidly expanding informal settlements and increased demands for basic services (RSA, 2008).
This article asks whether vertically-divided authority, which occurs when different political parties control disparate levels of government, matters for these urban developmental challenges. The local-government elections in 2011 have shown that vertically-divided authority is becoming increasingly important. In fact, the opposition Democratic Alliance (DA) won overall control of Cape Town, one of South Africa's six metropolitan municipalities, in the elections and narrowly lost another, Nelson Mandela Bay. This success follows the DA's stint governing Cape Town as a majority party in 2001-2 and in a coalition from 2006 to 2011.
To address the impact of politics on service delivery, the article compares Cape Town with the city of Johannesburg. Since the advent of the new local-government system in 2001, Johannesburg has been controlled by the African National Congress (ANC), also the © The Author 2014. Development Policy Review © 2014 Overseas Development Institute. This is an open-access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Development Policy Review 32 (S1) ruling party at national level. Through interviews with a variety of stakeholders in Cape Town and Johannesburg in 2011 as well as an analysis of local-government documents and data, opposition-controlled municipalities are found to be not necessarily less capable of delivering services than those under ANC control. Indeed, opposition-ruled Cape Town has been ranked by EMPOWERDEX, an independent rating agency, as the best-run municipality in the country. Moreover, the Department of Co-operative Government and Traditional Affairs (COGTA), which is the government department responsible for local government, has also singled out Cape Town as South Africa's best metropolitan municipality in the delivery of basic services.
This does not imply that there have been no attempts to subvert opposition-based municipalities. For example, the article will show that controversial crossing-the-floor legislation undermined the opposition's ability to govern at the local level in the early 2000s. In addition, the complex inter-governmental relations (IGR) system means that cities do not have full responsibility for delivering major services. This has created space for political manipulation by the national government, such as in the housing sector.
To elaborate on these points in greater detail, the article first delineates how national decentralisation policies have affected service-delivery responsibilities and resources. Subsequently, it focuses on differences in service delivery depending on whether or not the city is governed by an opposition party and discusses how vertically-divided authority affects IGR. The article concludes with implications of the current IGR system for policymakers, including for international donors operating in the country's urban sector.

Decentralisation and the South African case
Political decentralisation in Western and Eastern Europe in the 1980s and 1990s has led to many local governments being granted greater powers by their central government (Goldsmith, 2005;Wollman, 2003). This was not confined to the developed countries, as many of these trends became increasingly evident in Latin America, Asia and Africa (Crook and Manor, 2000;Manor, 1999;Prud'homme, 2003).
However, in comparison with other parts of the world, African countries still tend to be rather centralised (Olowu, 2003). Manor (1999) suggests that this limited decentralisation is due to the fact that nascent state formation is taking place concurrently with democratic, decentralisation reforms. Decentralising power is often seen as a risky endeavour in Africa within a context of political instability, most notably where ethnic and regional cleavages exist. National elites often fear losing power at local-government level (Mawhood, 1993;Olowu, 2003;Prud'homme, 2003;Wunsch and Olowu, 1990). This is compounded by the tendency of opposition parties in many democratic African countries to control capital cities which, in turn, has led to attempts by central government to undermine their power (Olowu, 2006;Resnick, Introduction).
South Africa generally has avoided this African trend of weak local government by constitutionally entrenching local governments with specific functions and powers, and sources of revenue. This has not always precluded political interference in oppositioncontrolled cities, especially because of key challenges discussed below related to the delineation of responsibilities and accountability across different levels of government.

The 1996 Constitution and inter-governmental relations
Historically, South Africa had a centralised form of governance, but the IGR system changed substantially as a result of the 1996 Constitution, which stipulated the creation of a quasifederal system, consisting of national, provincial and local tiers of government (RSA, 1996). Parliament consists of the National Assembly and the National Council of Provinces which represents provincial interests. Currently, there are nine elected provincial governments. Moreover, the Municipal Structures Act stipulated the creation of metropolitan governments for major cities, and there are currently eight metropolitan governments in South Africa.
Strong local government is an integral part of the 1996 Constitution, which states that each level of government is distinct, interdependent and inter-related. The principle of cooperative governance underpins this non-hierarchical system of inter-governmental relations. Section 151(3) of the Constitution stipulates that a municipality has the right to govern on its own initiative the local community's administrative affairs, subject to national and provincial legislation as provided for in the Constitution. Section 151(4) states that national or provincial government may not compromise or impede a municipality's right or ability to exercise its powers or perform its functions.
The specific powers and functions of local government are entrenched in Schedules 4B and 5B of the Constitution. Municipalities have the executive authority and right to administer local-government matters articulated in the Constitution and any matter assigned to them by national or provincial legislation (Cameron, 1999;Pimstone, 1998). The most important constitutional functions of local government include the provision of water, sanitation, roads and stormwater drainage, solid waste disposal, electricity reticulation and municipal health services. The Constitution's list of local-government objectives includes the provision of services in a sustainable manner and the promotion of social and economic development.
However, in reality, the system of local governance has been considered a failure in some respects. For instance, a COGTA report (RSA, 2009: 10) stated that much of local government is in distress and pointed to: • tensions between the political and administrative interfaces; • poor ability of many councillors to deal with the demands of local government; • insufficient separation of powers between political parties and municipal councils; • lack of clear separation between the legislative and executive; • inadequate accountability measures and support systems and resources for local democracy; and • poor compliance with the legislative and regulatory frameworks for municipalities.
What accounts for the disjuncture between the rhetoric and reality of the new local government system? Manor (2001) observed that introducing new local governments without sufficient financial resources was a recipe for disaster. 1 Siddle (2012)  major factor contributing to the failure of local government is to be found in the demands placed by a complex system on institutions which have limited ability and little inclination to meet those demands. In turn, Cameron (2007) claimed that one of the consequences of the decentralised system was the emergence of local clientelistic and patronage interests that have not promoted service delivery to communities. COGTA's report covered all 283 municipalities (now 278) in the country and much of it was concerned with the inability of smaller municipalities to perform their functions and conform to rigorous reporting criteria. The report acknowledged that it might be giving a rather skewed picture of local government, suggesting that there are a few well-capacitated and effective municipalities, such as the metropolitan governments (RSA, 2009). In fact, the report states that the metropolitan governments and secondary cities are wellestablished and consolidated, but they confront sustainability challenges from urbanisation and in-migration, and the accompanying high levels of poverty.
There are also some broader concerns about the practical implications of existing legislation on inter-governmental relations. For instance, Steytler (2008) argues that the current plethora of national and provincial laws may be guilty of strangulating local government, thus preventing it from executing its constitutional, developmental mandate. The Municipal Finance Management Act (RSA, 2003), which came into effect in July 2004, is the key legislative mechanism governing financial administration within local governments. MFMA regulations are well-intended but have proved problematic in practice. Implementation has required the development of a complex set of skills and has in some cases been extremely demanding (SACN, 2007: 67-8).
In addition, the South African Cities Network (SACN, 2006: 5-23) points out that the responsibility of local government is often dependent on both the provincial and national spheres. This gives rise to fragmentation, potential duplication and confusion about responsibilities, and major cities such as Cape Town and Johannesburg do not have total responsibility for the delivery of major services.
Some examples of this overlap include the following: • Housing is a joint national/provincial responsibility, part of which is delegated to local municipalities. The responsibility for housing is thus shared between three levels of government. • In accordance with Schedule 5 of the Constitution, provincial roads and traffic are exclusively a provincial function, while municipal roads, traffic and parking are exclusively municipal functions. Public transport is a concurrent function of both national and provincial governments, while municipal public transport is an explicitly municipal function according to Schedule 4B. • Planning is also split between different tiers of government such that provincial planning is an exclusive provincial competence, while municipal planning falls under the mandate of the municipalities.
As discussed later, these overlapping responsibilities create the space for political manipulation.

Fiscal framework
Despite the lack of clarity in some key areas regarding administrative responsibilities, local governments have their sources of revenue guaranteed by the Constitution. This is a strong indication of financial decentralisation. The Constitution gives local government the right to impose taxes on property and surcharges on fees for services provided, and these are major sources of municipal revenue. Many municipalities also make a profit from the reticulation of electricity and, to a lesser extent, from water.
Local governments are largely self-financing, with a couple of caveats. First, there is an imbalance between available local revenue sources and expenditure functions assigned to local government. Second, the capacity of local governments to raise revenue differs due to varying tax bases. Metropolitan municipalities are generally well-endowed with resources, while many smaller towns and rural municipalities are poor and lack resources.
The quasi-federal Constitution guarantees an equitable share of nationally raised revenue for the provincial and local spheres of government. In 2011/12, the national government received 63.7% of this vertical division of revenue, while provincial governments obtained 32.5% and local governments acquired 3.8% (RSA, 2011). The equitable share of nationally raised revenue is intended to fund a range of municipal activities, although the main purpose is to secure free service levels on a national scale.

2
The equitable-share formula allocates resources between local governments largely on the basis of the proportion of poor households in their jurisdiction. Notwithstanding this, it is an unconditional grant which the local government can spend at its discretion. There are also provincial transfers to local government that are made at the discretion of provincial government. Conditional grants make up the remainder of resources transferred by national government to the municipalities. These transfers are intended to support investment in municipal infrastructure and strengthen municipal capacity (RSA, 2008).

Profiles of Johannesburg and Cape Town
Metropolitan areas are crucial to South Africa's economy, as they contribute the most to the total geographical value-added, which is a measure of municipal activity at the local level. The respective contributions of the metropolitan governments are: Johannesburg (14%), Cape Town (11%), eThekwini (9%), Tshwane (9%) and Ekurhuleni (9%) (SACN, 2011: 20). 3 Clearly, of all the metros, Johannesburg and Cape Town are the two highest contributors to national growth.
Johannesburg is the capital of Gauteng, which is the wealthiest province in South Africa. Home to approximately 3.9 million people, it not only has the largest population of all metros in the country but is also the most densely populated and urbanised municipality (City of Johannesburg, 2008: 19). The previous census, held in 2001, put the population at 3,225,812, implying a 17% growth rate and high levels of in-migration in the 2001-7 period. With the exception of Cape Town, this has been the highest growth rate of all 2. It has been national government policy since December 2000 that municipalities provide 6 kilolitres of water and 50 kilowatts of electricity per household per month free. Most provide free services to all residents but some offer them to indigents only. Some metropolitan municipalities provide more than the minimum requirement. 3. Two more metropolitan authorities were established by the Municipal Demarcation Board in 2011.
© The Author 2014. Development Policy Review © 2014 Overseas Development Institute. This is an open-access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Development Policy Review 32 (S1) metropolitan municipalities in this period (Statistics South Africa, 2007). The municipality of Johannesburg employs 26,274 people, which is more than any other municipality in the country (RSA, 2008: 178). Johannesburg is also a stronghold of the ANC, which won the 2000, 2006 and 2011 local elections with overall majorities. Currently, the ANC holds 153 seats in the 260-seat council, with the DA holding 90 seats.
Cape Town is the capital of the Western Cape province. The city's population increased from approximately 2.9 million in 2001 to 3.5 million in 2007 (Statistics South Africa, 2007). The municipality of Cape Town employs 22,095 people. The Democratic Alliance, which resulted from the merger of two historical white parties, the New National Party (NNP) and the Democratic Party (DP), won Cape Town's local-government elections in 2000. 4 After a street-naming scandal discussed in greater detail below, the NNP faction broke away from the DA and formed an alliance with the ANC in 2002

Performance of the municipalities
As seen in Table 1, there have been significant service improvements in both cities since 2001. From an absolute perspective, Cape Town has a better service-delivery record, but this must be qualified by stating that historically the city has had a higher level of service provision, partly due to the fact that it has no populous black township with high degrees of poverty comparable to Johannesburg's Soweto. Despite these improvements in service delivery, considerable backlogs exist. According to MCA Planners and Oranje (2005: 12), the metros were simply not able to keep up with the high levels of in-migration and household formation. This is particularly true for Johannesburg, which has one of the highest backlogs in water and sanitation provision among the South African municipalities (RSA, 2009). Cape Town, on the other hand, has been ranked as South Africa's best-run municipality by EMPOWERDEX (2009), an independent rating agency. COGTA's universal household-access-to-basic-services index ranked it as the best metro with regard to the delivery of basic services. And the National Treasury has singled it out (along with eThekwini), as the best performing municipality in terms of financial management. Although a well-endowed municipality, Johannesburg is characterised by weak management as evidenced by the poor billing system for rates and services, which led to 65,000 incorrect bills being sent to consumers, and poor maintenance of infrastructure. These differences in performance have translated into disparate levels of support for the ANC and DA in their respective strongholds. Table 2 indicates that the DA increased its support in Cape Town by almost 20% between 2006 and 2011, which suggests increased voter satisfaction with service delivery. Voter turnout has also gone up by 17%, which is another reflection of voter satisfaction. The Johannesburg results indicate that ANC support has dropped by almost 4%, while that of the DA has increased by 7%. This suggests some dissatisfaction with service delivery.

Attempts to undermine decentralisation
Given the above context, what impact does party politics have on the process of decentralisation and service-delivery performance in these two cities? I show here that there are some attempts to undermine political decentralisation in opposition-controlled Cape Town and to further centralise human resources. Perhaps the service that has been most hampered in this regard is housing. Yet, with the possible exception of the equitable share, financial decentralisation is not really under threat, and this may explain why other key urban services are not seriously threatened by vertically-divided authority.

Backtracking on political decentralisation
There are a number of ways in which the ruling government has attempted to undermine political decentralisation. For instance in the last two local-government elections, the ANC © The Author 2014. Development Policy Review © 2014 Overseas Development Institute. This is an open-access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Development Policy Review 32 (S1) did not announce in advance its candidates for the metropolitan area mayors, except in the case of Cape Town in 2011. Instead, the mayors are appointed by the President, in conjunction with the ANC's national working group. This, however, undermines the ability of constituents to hold their representatives directly accountable.
The electoral system for local government further contributes to political centralisation. Specifically, half the councillors are elected on a ward basis and the other half on a party-list proportional-representation (PR) system. This has centralised enormous power in the hands of party leaders. The fielding of candidates in local-government elections is determined at the regional level, and by the President in conjunction with the National Working Committee of the ANC in the case of mayoral positions in metropolitan municipalities. Mayors and councillors owe their positions to the party bosses who nominate them, rather than to the public who might have voted for them. Accountability is therefore to political leadership rather than to the community. This is problematic not only for the ANC but also for the DA. In fact, a study by Cameron (2003) showed that the ANC in Ekurhuleni and the DA in Cape Town have both removed mayors from metropolitan governments. Consequently, constitutional decentralisation co-exists with party centralisation (see also De Visser, 2009).
Inter-party conflict has also limited political decentralisation. For instance, there have been clear attempts by the ANC to undermine local government in the DA-controlled city of Cape Town. The DA won the 2000 local-government elections in Cape Town with 53.02% of the vote, but its rule turned out to be short-lived (Cameron, 2003). After a streetnaming scandal in 2001, 5 the mayor of Cape Town, Peter Marais, was suspended and ultimately fired by the DA political leadership. 6 The NNP faction, to which Marais belonged, subsequently withdrew from the DA alliance and announced that it would go into coalition with the ANC. After negotiations between the two parties, a constitutional amendment as well as legislation allowing floor-crossing were introduced in Parliament in March 2002. This enabled councillors to defect from their political parties without losing their seats. 7 The major beneficiaries of the floor-crossing legislation were the bigger political parties, notably the ANC. 8 In fact there were no defections from any ANC-led council during the period that the floor-crossing legislation existed.
After the legislation was implemented in October 2002, the ANC/NNP coalition won a number of important municipalities, including the City of Cape Town (Cameron, 2003), where it had the majority until 2005 when the NNP was abolished and its members joined the ANC which then ruled the city until the 2006 elections. The ANC regime in Cape Town was characterised by constant accusations of corruption and mismanagement, and the party went 5. The mayor designed a proposal to change the names of the streets in Central Cape Town as part of a reconciliation initiative. i.e. Adderley Street to Mandela Avenue and Wale Street to F.W. de Klerk Avenue. During the consultation process there were several lists of forged signatures in favour of the mayor's plan. Two senior officials in the mayor's office were implicated in the fraud (Cameron, 2003). 6. This was challenged by the mayor in court. Although he won his case, he subsequently resigned from the Council. 7. Certain requirements had to be met. To minimise political opportunism, a threshold of 10% of a party's council members was required in order to cross the floor. Furthermore, in order to ensure political stability, defection could only happen in certain window periods, that is, within the second and fourth year in a five-year term. The legislation was abolished in 2009. 8. This was because it was more difficult for smaller caucuses to obtain the 10% threshold of councillors needed to defect.
into the 2006 elections as a highly unpopular incumbent (Dhawraj, 2011). In the 2006 poll, the DA managed to capture 42.86% of the vote, the ANC 38.57%, and the Independent Democrats (ID) 10.95%, with the rest of the vote going to a number of smaller parties (IEC, 2011). At the first council meeting, an alliance of the DA and smaller parties elected Helen Zille as the mayor over Nomaindia Mfeketo, the ANC/ID's candidate, by a narrow majority (Dhawraj, 2011). However, the ANC did not give up on its attempt to recover Cape Town. To understand what followed requires an understanding of the executive system of municipalities. In accordance with the Municipal Structures Act (1998), two types of executive systems (Cabinets) are available for metropolitan authorities: • The collective executive system, which allows for the exercise of authority through an executive committee in which the leadership of the municipality is collectively vested. Provision is made for a mayor, although he/she is only one member of the collective executive committee. The committee must be composed in such a way that the party representation of the municipal council is reflected in the committee in substantially the same proportion as in the council. • The mayoral executive system, which allows for the exercise of executive authority through an executive mayor, in whom the leadership of the municipality is vested and whom a mayoral committee assists. Under this system, the mayor may appoint a committee to provide assistance, and he/she may delegate specific responsibilities to the committee. This is to be a Cabinet-type structure, with the mayor at liberty to choose committee members.
The provincial Members of Executive Councils (MECs) decide on the type of government structure. The Gauteng ANC-controlled provincial government favoured the mayoral executive system, while the opposition-controlled Western Cape was governed through the collective executive system. This meant that, after the 2000 elections, Johannesburg was governed by means of a mayoral executive system and Cape Town by a collective executive system (Cameron, 2005).
When the ANC (initially in alliance with the NNP) won control of the Western Cape through floor-crossing in 2002, it amended legislation so as to give municipalities the option to decide on their governing mechanism. This enabled Cape Town to replace its existing governing body with the mayoral executive system. The ANC/NNP alliance then elected Nomaindia Mfeketo as executive mayor and because this system does not make provision for proportionality, the DA lost all its seats on the city's mayoral executive committee.
The DA campaigned in the 2006 elections with the theme of bringing back the collective executive system on the grounds that this was more democratic and transparent. After its narrow victory, the DA alliance faced a dilemma: if it fulfilled its campaign promise and re-instated the collective executive system with its proportionality clause, it would lose its political strength because half of the executive committee seats would go to the ANC/ID alliance. Understandably, the DA stayed with the mayoral system. The ANCcontrolled province, however, was the final arbiter in this matter, and according to widespread speculation, it was planning to amend legislation once more to ensure that Cape Town adopted the collective executive system. Ultimately, however, the province did not change the legislation, purportedly at the behest of the national government. The ANC also tried to undermine the DA by renewing the contract of the ANCappointed city manager, Wallace Mqogi, just two days before the 1 March local polls, which was a clear violation of legislation that stated that managers had to be appointed by the full council. 9 Mqogi also became embroiled in the 2006 election campaign by writing an article in a local newspaper expressing his support for the ANC. The DA-led alliance voted in a special sitting to oust Mqogi but he refused to vacate his office and continued to arrive for work every day. He eventually left the city after losing a Cape High Court Order (Dhawraj, 2011).
Helen Zille is on record as stating that the ANC tried on numerous occasions to unseat the DA coalition. This confrontational atmosphere continued until the DA went into an alliance with the ID in 2007, which gave it a clear majority in the council. The DA then won the Western Cape Province in the 2009 elections with Helen Zille, now the national leader of the DA, becoming premier. The DA absorbed the ID and won the 2011 elections in Cape Town with a clear majority, receiving 60.92% of the vote.
Another potentially centralising factor is the idea of holding concurrent elections for all tiers of government. In June 2011, President Zuma stated that the government was seriously exploring the possibility of having one election for national, provincial and local governments. This would lead to the country having one financial-year period, one system of public-service provision, a common five-year medium-term planning framework, as well as aligned human and budgeting frameworks.  Yet, as seen in Table 3, election results differ between the national and local levels. 11 This has tended to favour the opposition at the local level. As such, the introduction of a single election is likely to weaken the DA vote in Cape Town. The DA has received more 9. The contract renewal was made by Nomaindia Mfeketo, the then mayor of Cape Town. 10. See www.polity.org.za 11. There are also different electoral systems between national and provincial government, on the one hand, and local government on the other. National and provincial governments only have a PR system while, as pointed out, local government has a combination of a ward-based and PR system. than 50% of the vote at the local level in Cape Town on two occasions, but has never reached that level of the national vote in the city. It seems to be able to mobilise its supporters better in local elections, while the ANC has difficulties in this respect. The empirical analysis is insufficient to explain why this is the case. However, there is evidence to suggest that African communities are less likely to vote for the local government because of the oppressive role it played during apartheid and because the concerns of the poor with regard to unemployment, poverty and job creation are primarily addressed by the national government. By contrast, white middle-class communities are more likely to vote only if they believe they can win, as is the case at the local-government level in Cape Town (Faull, 2006).

Centralisation of human resources
One of the most important aspects of decentralisation is the right of local governments to appoint their own staff (Mawhood, 1993). The South African Constitution articulates the basic values and principles governing public administration, which apply to all organs of the state. According to Section 195(i): public administration must be broadly representative of the South African people, with employment and personnel management practices based on ability, objectivity, fairness, and the need to redress the imbalances of the past to achieve broad representation. (RSA, 1996) Based on Section 160(1) (d) of the Constitution, a municipal council 'may employ personnel that are necessary for the effective performance of its functions'. Local governments have the discretion to appoint their own staff subject to national labour legislation, while the Employment Equity Act (1998) obliges municipalities to structure their workforce on representative racial lines.
In practice, public human-resources policy is somewhat more complicated. In 1997, the ANC introduced its 'cadre policy and deployment strategy', which states that: transformation of the state entails, first and foremost, extending the power of the National Liberation Movement over all levers of power: the army, the police, the bureaucracy, intelligence structures, the judiciary, parastatals and agencies such as regulatory bodies, the public broadcaster, the central bank and so on. (Cited in de Jager, 2009: 282) Cadre deployment entailed a high degree of ideological commitment. Potential deployees were made to understand and accept the basic policies and programmes of the ANC (Mafunisa, 2003;Maserumule, 2007). The strategy made no reference to the need for administrative competence. Similar deployment structures exist at the provincial and local levels.
How has this contradiction between formal political decentralisation and party control worked with respect to senior managers? The municipal manager and senior managers are appointed by the council. These managers must have the relevant skills and expertise to perform the duties associated with the post in question, although provision is made for the advancement of persons or categories of persons disadvantaged by unfair discrimination.
Municipal councils may, however, delegate a degree of their power to mayoral executive committees, and in many municipalities there has been an extensive delegation of power to such committees. In some municipalities, all staff appointments are made by the mayor (Atkinson, 2003;Cameron, 2007). This has contributed to the appointment of political supporters, families and friends to government posts.
The government has acknowledged that the deployment of unskilled cadres to senior party positions has contributed to poor service delivery. According to COGTA, party deployment and political interference have contributed to inefficient and ineffective administrations because senior managers, including municipal managers, who are assigned to these positions, often lack the requisite skills and relevant qualifications to manage municipalities (RSA, 2009). When the ANC was in power in Cape Town, a number of mostly white senior managers were given early retirement packages and replaced by largely native African managers. The DA accused the ANC of replacing experienced managers with political and patronage appointments. The DA in turn has been criticised by the ANC for disproportionately appointing white senior managers and forcing senior African managers to resign.
Johannesburg is a well-capacitated municipality employing a number of highly skilled professionals. However, they have been bedevilled by serious management problems most notably concerning the billing system. The problem, according to one Johannesburg interviewee, is that there are unqualified managers in a few key positions, which has a negative impact on the city administration (interview with consultant/ex-senior Johannesburg official, June 2011).
The government also introduced draft legislation to create a single public service, which would expand its remit beyond national and provincial government to include local government. The Bill's main aim was to improve service delivery and co-ordination amongst the various spheres of government, but controversy emerged in a number of areas. For instance, the Bill allowed local staff to be deployed by the central government in other municipalities or in national and provincial departments throughout the country, and vice versa. Senior managers were to be accountable to both the central government, which could influence their careers in the long term, and their current employer, the local council. Yet international experience has shown that this system ultimately leads to direct control by the central government. While the Bill's objective was ostensibly administrative, DA leader Helen Zille believes that its true motivation was to appoint ANC supporters to senior positions in Cape Town in order to thwart the implementation of DA policy (Cameron, 2009). The Bill was withdrawn because of concerns about constitutionality, and it is currently being redrafted.

Implications of inter-governmental conflict for housing
In addition to a greater centralisation of human resources, there is often a lack of clarity regarding responsibilities between different levels of government. This creates the potential for political conflict in instances of vertically-divided authority, particularly with regard to high-profile urban services. Confusion over IGR responsibilities emanates directly from the South African Constitution, which not only allocates functions but also enables national and provincial government to delegate certain powers to local government.
This has been most problematic in the area of housing which, as noted earlier, is an obligation shared between all the national, provincial, and municipal levels. These overlapping responsibilities have been the source of much frustration. For example, the province has the authority to decide the location of potential housing settlements. But, due to resistance from middle-class communities, it frequently selects peripheral areas that normally do not align with the budgets and plans of the municipalities. The infrastructure grant goes to the municipality, while the housing funding is allocated from the national level to the province, leading to a lack of co-ordination (interview with local government consultant, November 2011).
Since housing is a function delegated to local governments, it can become a political football. The most notable case occurred in 2006 when the national government removed the City of Cape Town from the N2 Gateway scheme, which was a major showpiece housing project. Until then, a joint committee of national, provincial and local governments, which were all controlled by the ANC at the time, had managed the N2 Gateway project from March 2005 until March 2006.
One of the big political issues in the Western Cape is the allocation of low-income houses. Under apartheid, Western Cape was a preferred 'coloured labour' area, with restrictions on Africans entering the area. Coloureds, in turn, were largely the victims of group removals which forced them out of the white areas. A huge housing shortage ensued, and Cape Town had a waiting list that was based on the principle of 'first come, first served'. When apartheid was abolished, the housing lists became an issue of contention for the ANC, which felt that they discriminated against Africans. To compound matters further, Africans form the bedrock of ANC support, while coloureds predominantly support the DA.
As part of the N2 scheme, the ANC's policy was that 70% of the beneficiaries were to be people from the informal settlements, while the other 30% were to be those who are categorised as backyard dwellers. The main complaint was that this was a racial policy in disguise, because the majority of people from illegal settlements were African and most backyard dwellers were coloured (interview with senior Cape Town official, December 2011; Delcarme, 2011). There were allegations that the ANC allocated housing in the N2 Gateway project not only to Africans but in particular to new migrants to the city who supported the ANC. This caused resentment amongst the coloureds, who had been on the waiting lists for years, resulting in one prominent land invasion of houses orchestrated by a DA councillor.
The timing of the cancellation of the N2 project was therefore significant because it occurred in March 2006, just after the DA had taken over from the ANC as the majority party in Cape Town's local-government elections. The DA argued that they were barred from the N2 Gateway project because the ANC was concerned that they would uncover evidence of patronage-based allocation and would take steps to prevent further political allocation of housing. Consequently, the local municipality no longer has a role in the N2 Gateway project, except for the allocation of basic services such as water, electricity and refuse removal (interview with senior Cape Town official, December 2011; Delcarme, 2011).

Strong financial decentralisation as a counterweight to political interference
Notwithstanding the above details highlighting attempts to limit the decentralisation of political and human resources and the attendant consequences on key-service delivery areas, there is still strong financial decentralisation. While there have been some concerns related to the distribution of inter-governmental grants, South Africa's major metropolitans are largely self-financing. This in turn reduces, though it does not entirely eliminate, the influence of party politics on financing local service delivery.
Budgets. As of 2011/12, the municipality of Johannesburg had the country's largest operating budget (R28,373,051,000) but its capital budget (R3,927,844,000) is relatively low for a city of its size, which is a reflection of its liquidity problems. The 'current ratio' measures the ability of a city to pay its current liabilities out of its current assets. An acceptable ratio for municipalities is 1.1, but for Johannesburg the current ratio is under this threshold (City of Johannesburg, 2011: 86). Johannesburg's income is derived as follows: 57% from services charges, 17% from property rates, and 15% from grants (ibid.: 13).
In Cape Town's 2011/12 budget, its operating budget totals R21,953,048,000 and its capital budget R5,089,867,000. Service charges account for 53.5% of the city's income, rates 20.7%, and transfers and grants 8.6%. The current ratio for the city is 1.5 (City of Cape Town, 2011: 20, 58).

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Grants. As seen in Table 4, grants are a relatively minor component of the finances of both cities. These metropolitans are largely self-financing, which indicates a high level of decentralisation. Neither city is dependent on central-government grants for revenue, which is rare in the African context. While there are a few constraints such as the Treasury's financial guidelines, these major cities can determine their own spending priorities to a large extent.  (2011) 12. During the pre-World Cup financial years, the major cities undertaking to build stadiums received extensive infrastructure allocations from the Treasury, which inflated the percentage of revenue received as grants. The 2011/12 budget is the second post-World Cup budget and is perhaps a more realistic indication of the breakdown of the cities' income.
The metros and big cities receive a conditional grant in the form of the Urban Services Development Grant (USDG). In addition to the USDG, all municipalities receive the equitable share of funding which is constitutionally guaranteed and is an unconditional grant. This means that the share of unconditional grants as a percentage of overall grants is 61.5% in Johannesburg, and 52.5% in Cape Town. Consequently, concerns have been raised about the fairness of the equitable-share allocation. As pointed out by the Cape Town interviewees, the city has approximately the same population size as Johannesburg but receives R1 bn less. In terms of the Division of Revenue Act of 2011, Johannesburg was allocated R1,897,561,000, while Cape Town received R970,473,000. Cape Town had requested that the data that underpinned the allocation be made public, but the department of finance refused to do so. The deputy mayor of Cape Town stated in his 2011 budget speech that: We have also received unwelcome information, such as that the equitable share allocation from the national fiscus was cut by R27 million. It is highly questionable as to why Cape Town receives such a low equitable share compared to other similarly sized cities in the country. We believe that this city is being seriously short-changed in funding for its fair share of national funds that are our right in terms of the Constitution. (City of Cape Town, 2011: 12) According to a senior Treasury official, the allegations of political manipulation of the equitable share were patently untrue. 13 Allocation of the equitable share is finalised in the budget forum, which is chaired by the Minister of Finance and consists of the MEC for local government and representatives of the South African Local Government Association (SALGA). But a ministry official confirmed that the equitable-share allocation was calculated on the basis of the 2001 census, and Cape Town had been disadvantaged by its rapid population growth in the post-census period. According to officials, no other representative national database exists which could be used to calculate the equitable-share formula. 14 By contrast, political considerations appear to play less of a role with regard to certain conditional grants. For example, there are good relations between Cape Town and the Department of Transport in this respect. The city was allocated considerable funding for operating the integrated rapid transport system (IRT), one reason for this being that negotiations were conducted among fellow professionals, including engineers. Another reason is because, with respect to service delivery, the national ministers now have performance contracts with the President. Cape Town therefore became the Transport Department's pilot project because it had the reputation of being a well-run city able to deliver on its obligations. Thus, though opposition-governed, a good performance in Cape Town can bolster a minister's image (interview with Cape Town's deputy mayor and senior financial official, May 2011).
It is interesting to note that these findings overturn the conventional wisdom regarding grants, which is that unconditional grants are more conducive to decentralisation than equitable grants because they give municipalities the right to choose their own spending priorities 13. Johannesburg has also indicated that its equitable share was insufficient, given the city's infrastructural shortcomings (interview with senior Johannesburg financial official, June 2011). 14. The community survey of 2007 (which was a sample) was not deemed sufficiently representative at the national level by the Treasury.
© The Author 2014. Development Policy Review © 2014 Overseas Development Institute. This is an open-access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Development Policy Review 32 (S1) (Mawhood, 1993). In the case of Cape Town, conditional grants in respect of transport appear to be more conducive to decentralisation than the unconditional equitable-share grant.

Policy implications of vertically-divided authority
What are the implications of vertically-divided authority for South Africa's donor community? Although the amount of donor money is relatively small in South Africa, totalling 1% of the national budget (RSA, 2010: 15), it is seen as significant in terms of helping the country leverage its own resources more effectively in order to stimulate development.
Recently, the international development co-operation (IDC) Chief Directorate of the National Treasury updated its guidelines for official development aid (ODA) flows to South Africa from the international development community in the form of grants and technical and financial co-operation (see RSA, 2010). The core principles in this report stipulate that: • the three tiers of government have the right to attract, plan and use ODA, in accordance with their own strategic priorities taking into account the basic tenets of the overall government policies, plans and priorities, and • ODA must be aligned to overall national strategic policies which means that any ODA intervention must be designed to support the overall government policies as stipulated in the Medium-Term Strategic Framework, and should address the government programme of action (RSA, 2010: 18-20).
Yet, there are no guidelines as to how the above principles should be applied in practice. While the national government has the overall responsibility for ODA management, provincial and local governments have the right to establish their own ODA policies and structures, and to pursue their own ODA practices within the broad national policy framework and guidelines (RSA, 2010: 28). Draft contracts need government approval, and are checked for compliance with domestic and international law and compatibility with the Department of Finance guidelines, for example, conformity with government priorities. Contracts are signed by the Finance Minister or the relevant departmental minister.
Within this national policy context, donors have adopted disparate approaches to dealing with opposition-controlled cities. For instance, the Danish International Development Agency (DANIDA) works with a number of municipalities, including Cape Town. According to an ex-DANIDA official, it would be too risky politically to work only with an opposition municipality (telephone interview with ex-Danida representative, November 2011). In fact, one of its most successful projects in recent years was the Urban Environmental Management Programme (UEMP), which involved working closely with the Department of Environmental Affairs and Tourism, the provinces and the four large municipalities of Ethekwini, Ekurhuleni, Cape Town and Johannesburg. According to DANIDA, the UEMP was an excellent example of good development co-operation. This strategy was the result of a consultative process that is founded on South Africa's development priorities and Denmark's overall development policy entitled 'Partnership 2000' (DANIDA, 2010. The UEMP was a conventional project in which the flow of money went through the Treasury's Reconstruction and Development Programme (RDP) fund. The UEMP funding was to supplement existing programmes and was therefore intended to support an implementation rather an infrastructure policy or new programmes. In addition to regular meetings with the donors, including biannual sessions with DANIDA, there was a steering committee that included representatives of the Department of Finance, SALGA and donors. There is general consensus that this co-ordination model worked particularly well (interviews with senior environment officials from the City of Johannesburg, June 2011). DANIDA was seen to be a highly flexible funding agency that focused on local priorities, in contrast with other more paternalistic donors who tried to determine what priorities were in the best interest of the municipalities. According to an ex-DANIDA official, this was one of the most successful programmes on which they had worked.
By contrast, the German donor agency KfW works only with the Cape Town municipality. One of its key projects has been the Violence Protection through Urban Upgrading project (VPUU) in the township of Khayelitsha (KfW, 2010). In answer to the question why KfW operates in an opposition-controlled municipality, a local KfW official confirmed that, according to the original plan, it was to fund an ANC-controlled municipality as well, but the municipality did not deliver and the project did not get off the ground. A good proposal was submitted by the then mayor of Cape Town, Helen Zille. Given that KfW is a state-owned organisation and accountable to German taxpayers, it needed to ensure that its money was well spent. Cape Town has a reputation of being wellorganised and able to deliver on its obligations, and KfW is very pleased with the city's performance with this project. Although there have been some subtle political criticisms about KfW working in an opposition-controlled municipality, no formal complaints have been forthcoming (interview with KfW representative, October 2011). Indeed, one Department of Finance official described Cape Town as an 'oasis', stating that the VPUU scheme was the best donor project with which he had worked (interview, October 2011).
In summary, the donors have a relatively high level of discretion because the central government does not act as a gatekeeper and they are able to negotiate with municipalities directly. They do, however, have different approaches towards vertically-decentralised authority. DANIDA is very conscious of the issue and attempts to intervene in a wide range of cities. Conversely, KfW is quite happy to work only with the DA-controlled Cape Town because it knows the city can fulfil its commitments.

Conclusion
In contrast to many other African countries, South Africa has a strong decentralisation policy. This has been facilitated by the country's strong constitutional framework, which accords a great deal of autonomy to metropolitan authorities. Despite some areas of ambiguity and overlap, the IGR framework also facilitates co-operation with regard to governance issues. In a similar vein, the South African Cities Network, consisting of the metros and one secondary city, mobilises around common issues facing big cities. To some extent this acts against victimisation of opposition-controlled Cape Town.
As a result of this strong constitutional framework, the role of politics in the provision of urban service delivery does not appear to be as problematic in South Africa as it has been in other African countries. The greatest effect of vertically-divided authority has been with respect to political decentralisation, as highlighted by the floor-crossing legislation that emerged in the wake of the DA's popularity in Cape Town. In the administrative realm, there has been a creeping centralisation of human resources, which has affected not only Cape Town but also Johannesburg. The removal of the N2 Gateway housing project prevented the DA from gaining visibility and support from constituents in Cape Town, but there have been other areas of strong co-operation with the central government, such as in the transport sector. Moreover, performance contracts on service delivery create positive incentives for national ministers to work closely with the administration in Cape Town. While there are concerns about the calculation of the equitable share, the fiscal framework is well-protected by a strong and well managed Department of Finance. This, combined with Cape Town's high levels of self-financing, prevents political considerations from playing a more pernicious role in the financing of urban services.
Moreover, even though South Africa receives relatively little foreign aid, the manner in which aid is provided reduces the likelihood that opposition-controlled cities are at a disadvantage in obtaining even small amounts of donor money. Donor grants have to be consistent with the guidelines of the Department of Finance, but both local government and donors have a reasonable amount of autonomy to determine spending priorities. The donor financial framework is relatively well developed, combining central co-ordination and a decentralised approach which works relatively well. Some donors even steer money directly to Cape Town because they know it can deliver on its commitments.
Overall, the South African case illustrates that in the context of multi-party democracy, politics will inevitably play a role in service delivery. However, the degree to which decentralisation has been institutionalised in South Africa and the existing incentive structure prevent opposition politics from subsuming the importance of providing urban services.