Limitations of the Principal-Agent Theory to Explain the Problem of Non-Compliance in South African Municipalities

Main Article Content

Thabo S Khaile
Gregory J Davids
Fundiswa T Khaile

Abstract

The obstinate problem of non-compliance with municipal financial legislation in South Africa has largely been explained as a principal-agent problem. Accordingly, the municipal officials as the agents are depicted as potentially non-compliant, dishonest and corrupt. Notably, measures that have been established to address the problem of non-compliance have been disproportionately focused towards the municipal officials. This intrinsic bias against municipal officials is flawed and inadequate for the context and dynamics at play in the problem of non-compliance with municipal financial legislation in South African municipalities. In particular, the assumption that non-compliance occurs because the municipal councils are unable to effectively control the behaviour of the bureaucrat is not borne out by reality. This article aims to highlight the theoretical limitations of the principal-agent theory in order to explain the problem of non-compliance with municipal financial legislation in South Africa. The article utilised a qualitative methodology. Secondary data which emanated largely from the Auditor-General of South Africa’s reports was employed. Drawing on reports of the South African Auditor-General, the article shows the contribution of the municipal councillors in the problem of non-compliance. The article concludes that municipal councils are not unable but unwilling to exercise oversight obligation and duty and thus must be regarded as complicit and culpable in the problem of non-compliance in South Africa municipalities.


          

Article Details

How to Cite
Khaile, T., Davids, G., & Khaile, F. (2021). Limitations of the Principal-Agent Theory to Explain the Problem of Non-Compliance in South African Municipalities. African Journal of Governance & Development, 10(1), 164-183. Retrieved from https://journals.ukzn.ac.za/index.php/jgd/article/view/2184
Section
Articles
Author Biographies

Thabo S Khaile, University of the Western Cape

Dr Thabo Khaile is currently the Head of Department for Fair Share, a Unit of the School of Government at the University of the Western Cape. In addition to holding a PhD (Public Administration), from UWC, he has two master’s degrees, namely, M Phil (Local Government Law) from UWC and a Master of Management (Public and Development Management) (P&DM) from Wits University.

PUBLICATIONS

  • Municipal Council and Budget Oversight: The Role Imagined
  • Content Contributor for Local Government Fiscal Management and Accountability
  • Handbook by Open Society Foundation for South Africa.
  • Book : Chapter –Actualising Commitment for Early Childhood Development in South Africa’s Metropolitan Municipalities      

RESEARCH

  • Factors Inhibiting Municipal Budget Oversight: Case Study of the City of Cape Town
  • Legal and Institutional Measures: Key Requirements for Effective Municipal Budget Oversight.
  • PhD Thesis: Municipal Budget Oversight by Multiple Principals: A Case Study of the Western Cape.
  • Researcher - Conduct Open Budget Survey at Ethekwini Metro for Dullar Omar Institute and International Budget Partnership-South Africa (2018 and 2019).

 

 

Gregory J Davids, University of the Western Cape

Dr. Gregory Davids has a PhD in Public Administration at the University of the Western Cape. His research focuses on public participation, local government, social justice and Citizenship. He has published and presented his research locally and internationally. He is a member of various boards in Government.

 

 

Fundiswa T Khaile, University of the Western Cape

Fundiswa T Khaile is a Lecturer and PhD candidate at the University of the Western Cape School of Government. She has been a faculty member of Economic and Management Sciences since 2007. She has taught in areas of Public Administration, Public Policy, Leadership and Managing People, South African Government and Politics.