The aim of this paper is twofold. First, it will explore the tensions and contradictions of participatory governance in the context of globalisation in the new South Africa. Second, the paper will interrogate the links between neo-liberal economic reforms and participatory governance in South Africa. In particular, it will explore the question of whether or not participatory governance is inherently democratic and development enhancing. On the basis of the analysis, the paper will explore an alternative scenario that will be relevant for policy and academic purposes for South Africa and other developing countries.