PHD-School of Economics

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This collections contains bibliographic information and abstracts of PHD theses and dissertation in the School of Economics held in Kenyatta University Library

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Browsing PHD-School of Economics by Subject "East African Community"

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    Analysis of Tax Revenue Productivity for Selected Countries in the East African Community
    (Kenyatta University, 2020) Manyanza, Rhodah Mueni
    The East African Community member states face challenges in mobilizing tax revenues to the required level which is suitable for economic growth enhancement and attaining fiscal sustainability. Tax reforms have been implemented in the region with the main objective of mobilizing more tax revenues. However, the tax revenue collections have been inadequate leading to persistent budget deficits which shows the inability of the tax system to generate sufficient revenues to finance public expenditure. Moreover, the member states have not been able to attain the target of Sub Saharan Africa average tax to gross domestic product of 26 per cent. Therefore, this study sought to establish the determinants of tax revenue, analyse the trends of tax effort indices and examine the effect of integration on productivity of tax revenue, for selected taxes for countries in the East African Community. The study employed non-experimental research design using time series data for the period 1984 to 2016. Appropriate tests for time series data were carried out whereby unit root test was done to determine the stationarity of the data and variance inflation factor to test for multicollinearity. Various diagnostics tests were conducted to determine the suitability of each econometric model. Regression analysis was carried out using ordinary least square. The study findings showed that the political risk factors, which included bureaucracy quality, democratic accountability and internal conflict, were key determinants of tax revenue. Gross domestic product per capita and inflation were determinants of tax revenue in all the countries; trade openness and manufacturing share in gross domestic product were key determinants of tax revenue in Kenya and Tanzania; while dependency ratio was a determinant of tax revenue in Kenya only. The efficiency of institutions was a key determinant of tax revenues in Kenya. Analysis of tax effort trends the study findings showed that, tax reforms, economic reforms and stabilization programmes, increase in agricultural output, political stability and reconstruction programmes increase tax effort. On the other hand, drought, financial crises, tax reductions and exemptions, low agricultural output, political instability and foreign aid embargo and high petroleum prices decrease tax effort. The study results showed that, formation of East African Community led to direct increase of all selected taxes in Kenya, while in Uganda it led to increase in total tax revenue, excise tax and direct tax. In terms of productivity, integration increased productivity of total tax revenue, value added tax and direct tax in Kenya, while in Uganda it led to increase in productivity of excise tax and direct tax. Integration also led to decline in productivity of total tax revenue in Tanzania, excise taxes and import taxes in Uganda and excise taxes in Kenya. The study recommends that East African Community governments should strengthen quality and efficiency of institutions through employment of qualified personnel, retraining and review of existing policies. Measures need to be put in place to control acts of civil war, civil disorder and terrorism. The East African Community governments should embrace policies that broaden tax base, improve tax administration, increase economic activities and stabilization policies to increase tax effort. Moreover, the thriving of East African Community need to be encouraged through policies such as labour mobility, improved infrastructure and simplification of regulatory framework coupled with research and development. Measures need to be put in place to control smuggled goods across borders and reduce tax fraud in custom authorities.
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    Macroeconomic Convergence and Business Cycles Synchronization towards a Monetary Union in East African Community
    (2021) Mbui, David Kirimi; Angelica Njuguna; Jacob Omolo
    The world economy has undergone unprecedented intensification of economic and political integration since the twentieth century. Developments in trade and capital account liberalization, as well as technological innovation in transport and telecommunications, have increased the international exchange of factors of production and final products and thus, integration. For regional economic blocs envisaging to form a monetary union, macroeconomic convergence is vital for deeper integration. The East African Community member countries like other regional blocs are in the process of forming a monetary union. The regional bloc has put in place macroeconomic convergence criteria as part of the targets that member states should fulfill before commencement of a monetary union. Although the bloc has put in place the criteria for regional economic integration towards a monetary union, it was unable to enter into a monetary union in 2015 as was envisaged, necessitating extension of the deadline to 2023. Attainment of macroeconomic convergence criteria by the respective member states has been slow and with significant variations. This has raised questions on the readiness of East African Community to proceed with the arrangement of the formation of a monetary union. The purpose of this study therefore, was to analyze the macroeconomic convergence and business cycles synchronization towards monetary Union in the East African Community. The study is anchored on two theories namely: the optimum currency area theory and the neoclassical growth theory. The study used time series and a set of panel data for the period 2000 to 2018. The first objective of the study was to establish the state of income convergence among East African Community member countries and Generalized Method of Moments estimation technique was employed to achieve the objective. The second and third objectives of the study were to evaluate the state of convergence of monetary variables and fiscal variable, respectively. Panel random effects model and time series model was used to achieve the second and third objectives. The fourth objective of the study was to analyze synchronization of business cycles in East African Community countries and cointegration analysis was employed to achieve the fourth objective. The key study findings were that there was empirical evidence to support the convergence in economic growth and monetary variables in the East African Community member states. There was, however, no empirical evidence of convergence of fiscal variable in East African Community member countries. Further, the study confirmed that business cycles among East African Community member countries were synchronized which is necessary for monetary union formation. The study findings, therefore, provided some evidence that East African Community member states were converging albeit slowly. The study recommended that East African Community countries ought to develop growth enhancing policies to spur economic growth thus aiding convergence of monetary and fiscal variables. This could be done through investment in infrastructure, increased credit to private sector and a reduction in interest rates. The East African Community secretariat should also be empowered to monitor the implementation and adherence to the convergence criteria by the member states as this would ensure convergence of economic growth, monetary variables and fiscal variable. Enhancement of bilateral trade among partner states through full implementation of the customs and common market protocols is necessary.