South Africa's best-managed municipalities are in Gauteng and the Western Cape, according to a study released on Wednesday.

"Western Cape and Gauteng municipalities remain typically the best managed and most competitive in a year ridden with protests," Municipal IQ said in a statement releasing its Municipal Productivity Index (MPI) and Compliance and Governance Index (CGI).

The MPI combines financial and other data to assess individuals' ability to engage with local economies.

The CGI focuses on how well municipalities are meeting basic planning, reporting, financial management, and capacity requirements.

The City of Cape Town had the top score on the MPI, followed by Tshwane, and Johannesburg.

"Tshwane rose to second place with robust spending contributing to its higher ranking in 2014."

Most of the best-performing local municipalities, eight out of 10 local municipalities, were in the Western Cape.

The top two were Overstrand and Stellenbosch both in the Western Cape.

Steve Tshwete in Mpumalanga came third, followed by Saldanha Bay, also in the Western Cape.

Most service delivery protests this year had been in Gauteng.

"Gauteng is narrowly ahead of the Eastern Cape as the most protest-ridden province for the first 11 months of 2014."

KwaZulu-Natal was in third place.

Municipal IQ managing director Kevin Allan said municipalities in underdeveloped areas, such as former homelands, were struggling.

Although there had been an improvement in compliance and capacity levels in struggling municipalities, these were not at the required standard.

According to its website, Municipal IQ is a web-based data and intelligence service that monitors and assesses South Africa's 278 municipalities.