Across the Organisation for Economic Co-operation and Development (OECD), globalisation is increasingly testing the capacity of regional economies to adapt and exploit their competitive edge, while also offering new opportunities for regional development. This is leading public authorities to rethink their strategies. Moreover, as a result of decentralisation, central governments no longer have the sole responsibility for development policies. Effective relations between different levels of government are now required in order to improve the delivery of public services.

This Review was produced by the Division of Regional Development Policy in the Public Governance and Territorial Development (GOV) of the OECD, in collaboration with the Gauteng Provincial Government and the Gauteng City-Region Observatory.

The Gauteng city-region is one of the fastest growing city-regions in South Africa. The functional city-region is largely coterminous with the administrative borders of the Gauteng Province, which was created in 1994, a few months before the country’s first democratic elections. Within the city-region, the population has grown particularly rapidly, thanks to in-migration. The population increased by 3.2 million residents between 1995 and 2009, at a rate of 2.6% annually, as compared with the national rate of 0.6%. In the period between 1997 and 2007, Gauteng’s growth rate, more than 2.7% annually, was nearly three times the average for OECD metro-regions (0.96%). This rapid urbanisation has reinforced the spatial segregation instituted under apartheid. Meanwhile, population growth has been concentrated in a few locations and has resulted in strong spatial polarisation, urban sprawl and tracts of under-utilised land between main urban centres. This pattern of development not only reinforces existing inequalities but generates high economic and environmental costs. If properly managed, however, the city-region’s potential for growth could be huge.

This chapter provides a profile of the Gauteng city-region’s leading economic and demographic trends and offers an analytical framework for policy recommendations. The chapter begins with a definition of the city-region and then offers a critical assessment of its economic performance, innovation potential and environmental constraints. Considerable achievements in public service delivery and education are highlighted. The chapter also explores the legacy of apartheid spatial patterns on mobility, local economic development and land use patterns. The question of adequate housing receives particular attention, given its potential as a catalyst of economic development and a primary vehicle for socio-economic integration. Trends in population growth, provincial R&D expenditure, employment, patenting levels, air quality, poverty, household income distribution and transport access are reviewed. For a comparative analysis sensitive to the global nature of the economy, key indicators are benchmarked with the 90 OECD metro-regions of more than 1.5 million inhabitants that are included in the OECD Metropolitan Database.

This chapter focuses on economic policy and outlines initiatives that build on the progress the Gauteng city-region has made towards a more inclusive economy. Since the end of the apartheid era, the windows of economic development have been opened for a large number of citizens in the city-region, but gaps remain nevertheless. The chapter reviews the result of recent attempts to reduce the exceptionally high level of unemployment, raise tertiary education attainment rates, and reduce high levels of informal housing and infrastructure backlogs. A section dedicated to spatial inequality discusses Gauteng’s central dilemma: how to provide for its booming population an affordable stock of housing and transport infrastructure that can bridge the service gaps inherited from apartheid. It recommends the adoption of a suite of policies to increase the supply of modest-cost housing and improve mobility through transport-oriented development and growth management. With a view to confronting economic inequality, the chapter includes a labour market policy analysis and stresses the need to improve labour market security for all workers. Given Gauteng’s dominance as the centre of African innovation, the chapter recommends a range of policies to capitalise on the city-region’s dynamism, e.g. improving productivity growth, expanding small businesses, developing new green growth sectors, and addressing bulk infrastructure needs. Taking account of the fluidity of the economic system in Gauteng and increasing inter-municipal commuting, the chapter proposes that policy approaches be grounded in a city-region framework.

This chapter analyses inter-governmental collaboration and its potential to advance a cross-cutting regional approach for the Gauteng city-region. Given the persistent challenges of aligning functions across spheres of government, the chapter argues that major policy arenas – public transport, environment and land use, and economic development – could be more effectively balanced through a “territorial” approach, in which various levels of the state work together to maximise economic competitiveness. After reviewing the main financing and planning tools of different levels of government, a section on inter-governmental co-ordination highlights gaps across and between different national and sub-national levels. The chapter recommends a three-pronged city-region governance strategy, consisting of: i) harnessing financial tools to expand infrastructure and economic opportunity across the city-region; ii) embedding the city-region concept into metropolitan transport and environmental policy; and iii) strengthening citizen engagement. A multi-scalar approach is applied for policy analysis, encompassing the national level (South African National Performance Management System), the provincial scale (the Gauteng Provincial Government’s Employment, Growth and Development Strategy, GEGDS), the municipal level (integrated development plans, IDPs), and the neighbourhood level (ward-based committees).