The leadership role of municipalities in local economic development (LED) is crucial to its success. Despite the recognition that LED is perceived as a municipal intervention, it is not being efficiently implemented in most South African municipalities. This article identifies the relationship between ineffective current municipal structural planning for LED implementation and municipal structures based on notions of bureaucracy and authority. It reports on the current structural planning for LED implementation, where the results of an assessment reveal that the current system of LED implementation offers insufficient economic development opportunities, reduces LED implementation to a municipal department and therefore, renders the municipality unable to offer a representative outlook (economic diversification) on the total municipal economy and promote dominant economic sectors. The system is slow in adapting to environmental change