Breaking the regravelling trap: A fiscal-federalism contract for upgrading South Africa’s unpaved roads

Don Ross (), Matthew Townshend () and Vincent van der Westhuizen ()
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Don Ross: UCT, Georgia State University, University College Cork
Matthew Townshend: DNA Economics
Vincent van der Westhuizen: DNA Economics

No 341, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: South Africa’s provincial and municipal road networks are dominated by low-volume gravel roads that are essential for service delivery and market access but are chronically under-upgraded. This paper argues that the persistence of repeated regravelling, reactive repairs, and post-disaster reinstatement is not primarily an engineering failure; it is an intergovernmental public investment problem. Responsibilities are decentralised across multiple principals and agents, benefits from upgrading are partly non-excludable and spill across jurisdictions, and budget holders face short-horizon fiscal constraints. The resulting wedge between national welfare and sub-national private incentives generates an underinvestment equilibrium in which economically justified upgrades are deferred and recurrent maintenance liabilities compound.

Keywords: Public investment management; Intergovernmental fiscal relations; Conditional grants; Performance-based financing; Low-volume sealed roads (search for similar items in EconPapers)
JEL-codes: H54 H77 R42 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2026-06
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Published in ERSA Working Paper Series, June 2026, pages 36

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