This chapter critically interrogates the structural underpinnings of South Africa’s post-apartheid local government system, arguing that its chronic dysfunction stems not from isolated governance failures, but from foundational flaws rooted in apartheid-era spatial and economic inequalities. Using a political economy lens, the chapter contends that the failure to radically restructure the economy and spatial development patterns has rendered the wall-to-wall local government system unworkable. Drawing on empirical evidence, policy documents and the author’s engagement with institutional actors, the chapter advances a compelling case for decentralising economic activity and investing in historically neglected areas. It calls for integrated planning, capable leadership and a coherent institutional architecture to reverse entrenched inequalities and restore local government’s developmental mandate. Ultimately, the chapter reframes underperformance not as administrative incapacity but as a systemic issue of ‘foundation failure’, urging the seventh administration to pursue structural reform as a long-term, outcomes-based strategy.