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Abstract Although many global policies refer to the need to reconcile growth, equity and sustainability, there is little that demonstrates what this entails, especially in fast growing developing countries. The sustainable cities literature focuses on environmental constraints, and the institutional economics literature on governance. The aim of this paper is to provide a conceptual synthesis that makes it possible to understand the complex dynamics of technological and institutional innovation. The evolution of Cape Town's strategies to deal with post‐apartheid inequalities within a context of severe resource constraints is reviewed. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
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