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a service, or solving a mutual problem. It is one ofthe most useful strategies for achieving
efficient and effective service delivery. Functional consolidation of municipalities however,
involves cooperation across jurisdictions for a common service. Transportation authorities or
water and sewer districts are common examples. The challenge of functional consolidation
however is the inability to address Issues that cross functional boundaries
[www.government.cce.comell.edu/doc/viewpage r.asp?=Intermunicipalcooperation, (2008)].
Vertical integration of the lOPs in the local and district municil)a1ities of South Africa
displays functional consolidation. However, the study explores the effectiveness of cross
functional consolidation ifany in Ulundi.
Using national data on local government service delivery from 1992 and 1997, Warner and
Hefetz (2002) assess the distribution of privatisation and intermunicipal cooperation across
localities in metropolitan region and find privatisation and intermunicipal cooperation most
common among suburbs that also exhibit high income and low poverty. Thus, market
solutions appear to reflect inequality among municipalities in metropolitan regions.
On the other hand, Cigler (1994) argues that intergovernmental collaboration can build the
capacity ofrural local governments, which often lack the necessary resources and expertise to
adequately provide government services and conduct policy decision-making activities.
However, 'truly collaborative ventures' are system changing, and thus potentially threatening
to existing government entities. In view ofCigler's stance (1994) adopted. this research seeks
to examine the extent to which intergovernmental collaborations can promote capacity
building especially in rural local governments like Ulundi.
Perlman (1993) believes that intergovernmental arrangements can ensure accountability and
equity. Perlman (1993) further notes that the number of special intergovernmental districts
increased by 12% between 1987 and 1992. Perlman's assertion (1993: 11) cites several
reasons why legislative bodies choose to create special districts:
• They are a way of skirting state constitutional limits on taxation, spending. and
borrowing.
• They enable state and local governments to appear to be cutting their budgets
while continuing to ensure service provision.
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