CW-School of Economics

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Agriculture production subsidies in developed countries: which way out for developing countries?
(2003-09) Gachanja, Paul M.; Kosimbei, G. K.
D eveloping countries participation in the world economy has declined alarmingly over the past 50 years in terms of GDp, exports and foreign investment. The Uruguay Round agreement on Agriculture (URAA) 2 brought world agricultural production and trade under a rules-based regime that not only governs market access, but also domestic support and export subsidies in the form of subsidies in the agricultural sector. In the developing countries, where agriculture is even more important, the biggest concern is with the effects on world markets of subsidized production and exports in DEeD countries. Agriculture is the backbone of the economies of many African countries. Agricultural exports account for a large share in total exports from these countries. Developed countries are known for giving agricultural production subsidies to farmers. These subsidies always depress world market prices rendering products from Africa and other developing countries uncompetitive. The general objective of this paper is to examine the effects of agriculture production subsidies in developed countries on agricultural performance in developing countries. The paper reveals that agriculture production subsidies hamper agriculture production in developing countries. The paper reveals that the subsidies should be reduced and agriculture production be left for the developing countries in the global economy.
Cost Effectiveness and Cost Benefit Analysis of Family Planning in Kenya
(2018) Kosimbei, George K.; Koronya, Charity
Determinants of gender earnings differntials in the informal set up
(2003-09) Gachanja, Paul Mwangi
The rapid and comprehensive economic reforms that Kenya has undertaken have led to changes in the employment situation, with respect to increased participation of women in the labour force and the rise of unemployment, especially among the youth. The increased participation of women in the labour force is mainly due to the opening up of opportunities occasioned by the improved access of women to education. This has seen participation rates rise for urban women from 30 percent in the early eighties to over 56percent currently. However, women S employment is still characterised by low productivity, low pay and long hours of work. This situation is even worse in the rural set up where the rural women still spend a disproportionate amount of their time on unpaid work, limiting their access to income earning opportunities. They also have a limited role in formal employment, while off-farm work oftencompromises their traditional roles. In addition, women are disproportionately represented in the informal sector. The major factors fronted for this situation include imbalances in training and access; retrogressive cultural practices which bar women from taking uppositions in certain spheres of employment and lack of a supportive legal framework. Attempts to raise the level of quality participation of women in the labour force have been unsuccessful due to inadequate skills and other social cultural factors (Republic of Kenya, 2002). The upshot is that average earnings for women are less than half those of men. (Republic of Kenya, 1997). This suggests that men arefavoured by all these factors above, guaranteeing them higher earnings than women. This paper will therefore seek to identify the major hindrances to women s participation in labour force in the informal rural set up and more so, the extent to which training, culture and the current legal framework have contributed to dismal participation of women in the gainfulemployment thereby dismal earnings. This will be achieved through collection of the available secondary data to be supplemented with information primarily obtained from the relevant sources. Simple descriptive statistics will be used to analyze the data. The paper proposes remedies that will enhance women participation so as to step up their earnings.
Determinants of Informal Sector Performance in the Rural Areas of Kenya: Evidence from Makueni County
(2014) Dianah, M. Ngui; Joseph, M. Muniu; Wawire, N. H. W.
The general objective of this paper was to investigate the factors that determine the performance of woodwork and metalwork enterprises in the rural parts of Makueni County in Kenya. The results showed that working capital. licensing. competition and the level of education were statistically significant in determination of profits. Based on the findings. it is recommended that the government and other stakeholders should provide both financial and non-financial services at affordable rates to the small business operators and entrepreneurs. Loans in form of money or kind should be made available through relevant lending institutions to supplement the working capital. eminars and conferences should be held to create awareness to the entrepreneurs of the various incentives and credit facilities provided by the government and other stakeholders. To achieve diversification and reduce the level of competition, the government should advice entrepreneurs on alternative business ventures. The government should also allocate land to the entrepreneurs and establish business parks
Determinants of value added tax revenue in Kenya
(2011-03) Wawire, N. H. W.
Past studies that have been undertaken on the responsiveness of tax revenues to changes in GDP in Kenya have found a positive relationship between tax revenues and GDP. However, the studies omit some key determinants of tax revenues, such as the nature of the tax system and institutional, demographic and structural features of the economy. Due to this omission, the estimated income elasticities of Value Added (VAT) revenues are unreliable for planning purposes, a situation that might be responsible for the recurring budget deficits. The specific objectives of this study were to establish the determinants of VAT revenue and assess the response of VAT structure to changes in the in its tax bases. The study is important because its results can be used to design pro-growth tax policies and implement tax changes that are equity enhancing. The paper uses Paul Samuelson's (1955) fundamental general equilibrium analysis of the public sector to derive its main results. In the framework, the demand function for the public good was derived from a constrained model of utility-maximization. In the same vein, tax revenues were taken as functions of household incomes, which paved the way for the estimation of Engel curves for public goods. The study finds that growth elasticities for VAT are all greater than one. The estimation results show that total GDP elasticity of VAT revenues is less than the elasticities with respect to monetary GDP, suggesting the existence of an underground economy in Kenya over the period of analysis. It is found that VAT revenues respond with substantial lags to changes in its determinants and that VAT revenues are sensitive to unusual circumstances. The study concludes that Kenya’s VAT revenue is very responsive to changes in their determinants especially international trade. There is therefore the challenge of creating a stable VAT system so that tax revenues can increase rapidly as the economy grows.
Developing Entrepreneurial Universities in Africa
(Kenyatta University, 2003) Nafukho, Fredrick Muyia; Wawire, Nelson H. W.
The urgency to reform the functioning of universities has mounted in virtually every part of the world. In the case of Africa, the need to promote entrepreneurial universities has been advanced as the only way to enable these institutions of higher learning to achieve their set visions and missions. In the 21st century, universities in Africa have been faced with extreme financial austerity and management crisis; this has put into question the quality of programmes being offered. In addition, it has led to invisible and visible brain drain and brain mobility. This paper interrogates the role of entrepreneurship as a reform agenda for universities in Africa. The guiding argument is that there is need to re-evaluate the creation of entrepreneurial universities as a way of enabling them attain their core functions of teaching, research and service. This is important in lieu of the fact that some policy makers think that entrepreneurial universities will reduce the role of the state in the financing of universities in Africa
Disparities in the manufacturing industry: innovation or linguistic manipulation?
(2003-09) Mbatha, Mathooko
For many centuries, developing countries have relied on imports of consumer goods from developed nations. This paper surveys some of the ways in which these countries have adopted in order to bridge the gap in the manufacturing sector. Most developing countries in a bid to manufacture products for the domestic markets have resulted to imitations, changing 'original' product names, copying packaging materials, colours, structures among others. This paper investigates one specific aspect, namely that of product names. It examines how manufacturers in developing countries have employed linguistic manipulation of product names in order to provide products similar to 'original' ones. The data for this study was collected in Kenya. The researcher visited supermarkets, shops, 'kiosks', shopping outlets, malls and manufacturing concerns mostly in Nairobi. The data covered diverse commodities such as the pharmaceuticals, domestic and farm products, among others. The study argues that in a bid to provide products that are seemingly local, developing countries have resulted in cheap imitations that do not build economies but instead destroy them through erosion of consumer confidence. This is because Consumers prefer original products from multinational companies because they are assured of quality and value. They despise locally produced commodities. The argument is that imitated products, although cheap, are not worthy the money spent. The result has been retardation in the growth of the manufacturing sectors of most developing countries. The paper concludes that in order for developing countries to forge ahead, there is need to produce quality goods.
Disparities that affect people with disabilities in Kenya
(2003-09) Wawire, N. H. W.
Improving access to quality health care, education, training, and equal opportunities in all spheres of life for. People with Disabilities (PWDs) continue to be a major concern to both the government and all stakeholders. As theKenyan economy goes through economic hard times, the effects are more pronouncedfor PWDs since they suffer discrimination and are denied equal access to the available resources. They not only represent that critical segment of the marginalised population but also face special problems as a result of their disabilities. They are among the poorest of the poor. Most of them eke out their livelihood through begging with a few lucky ones surviving on handouts, selling of charity sweepstake tickets and engaging in petty trade like shoe shining and repair. A small number of them are able to get lower cadre jobs like telephone operation. Most of these people do not know theirfundamental rights and live in a state of hopelessness and despair. They are disadvantaged in terms of buildings, schools, transport system, housing and other physical structures that are not designed with the requirements of the People with Disabilities in mind. Thepaper highlights various disparities that affect PWDs in Kenya. It identifies causes of disability that give rise to differences in labour, capital resource ownership and infrastructure designs, between PWDs and people without disabilities. It then assesses how these differences contribute to the socio-economic predicament in which PWDs find themselves. Recommendations of minimizing disparities that affect this cadre of people are then drawn.
Economic and regional disparities in Kenya.
(2003-09) Muganga, Dennis B.
The paper examines the vqrious economic and regional disparities in Kenya with the main aim of suggesting Policies that will enhance an equal level of economic growth and development in all the regions in the country. Data on the geographical division of Kenya into four main Regions and the main resources and potentials of these regions, was obtained from various government publications and other sources of secondary data. The relative regional wealth and potentialities were then highlighted and their impacts on the wear and living standards of the population observed. Availability of natural resources, Social amenities and educational instructions in each region were observed to have impacts and played a decisive role in the rate and extent of poverty and high income disparities between regions. This paper will only consider the main factors that directly lead to regional disparities in Kenya. These factors are both natural and man-made. They includei- Agriculture, commerce, climatic conditions, political influence and population density.An overview of other factors may also be considered just to link and effect relationships that influence human welfare.
Effect of public debt on private investment and economic growth in Kenya
(Kenyatta University, 2024-05) Gathu, Winfred Wanjiku
The Kenya Vision 2030 set ambitious goals for the nation’s political, social and economic development. Specifically, the economic component aspires to attain a 10% annual economic growth rate. Achieving this goal heavily hinges on investments, and Kenya currently leans on taxes and public debt to fund investments and promote economic growth. An excessive dependence on public debt carries potential drawbacks, including the risk of crowding out private investments and obstructing long-term economic growth. The objective of this research was to examine the impact of public debt on Kenya’s private investments and economic growth. Many previous studies have delved extensively on the effect of external debt on private investments and economic growth. This study sought to examine the effect of public debt, with a primary focus on the effect of domestic debt on private investments and economic growth. Time series data spanning from 2000 to 2021 were utilized to analyse the causal relationships among public debt, economic growth, and private investments. A Vector Error Correction Model (VECM) was employed to estimate the models, because the diagnostic tests show presence of a long run relationship. The model provided insights into the dynamics between public debt, economic growth, and private investments in Kenya. The findings revealed a significant negative effect of domestic debt on private investment and foreign debt on private investment. The analysis also considered other variables such as income tax yield, and total money supply which showed significant associations with private investment. Additionally, the findings revealed a significant negative effect of domestic and foreign debts on economic growth. Other variables such as capital and labour also demonstrated significant associations with economic growth. The study concluded that continuous monitoring and evaluation of debt management policies are crucial to ensure the long-term fiscal sustainability of the nation and foster an enabling environment for private investment. The study recommends that policymakers implement strategies to enhance domestic capital formation and improve infrastructure and human capital. These measures can help reduce the reliance on public debt as a financing mechanism and promote sustainable economic growth in Kenya.
Effects of East African Community Regional Trade Agreement on Member's Agricultural Exports
(2014) Ouma, Duncan
Agricultural activities contribute to about 33% of the East African Comrnunitys Gross Domestic Product (World Bank, 2009), 83% of the populace live in rural areas and 80% of the populace depend on agriculture directly and indirectly for food, employment and income, while about 40 million people in EAC suffer from hunger. Agriculture and agricultural trade is therefore a tool that can be used to transform the rural areas and help reduce poverty levels in the region. EAC member stales has formulated and implemented a number of initiatives to boost intra-regional trade. However. intra-EAC trade remains very low, that is, at 9% of the total regional trad(: (compared to other RTA in Africa and beyond, for instance: EU-66%; East Asia-55%; NAFT A-44%; ASEAN-27% and SADC-13%). Agricultural trade accounts to above 40 per cent of the intra-EAC trade. This study investigated effect of EAC-RT A on the regions agricultural trade by analyzing the degree of trade creation and diversion effects. Augmented gravity models were estimated under Random Effects using the Pseudo Poisson Maximum Likelihood approach. The study used Panel data from UNCOMTRADE. International Financial Statistics and World Development Indicators for the period 2000-2012 on the five EAC members and other 77 trade partners. The empirical findings showed Kenya and Tanzania benefited more from the integration in terms of agricultural exports, while Uganda, Rwanda and Burundi had no signif
Financial markets disparities in developed and developing countries
(2003-09) Kosimbei, G. K.
Financial markets are important in the process of economic growth and development in their role in savings mobilization. Despite the limited range of financial assets available to savers in developing nations, monetarization ratios are generally lower for such countries than for developed countries. The menu of assets available to private savers in developing countries from the formal financial system is often limited to cash, demand deposits, time deposits and sometimes government securities. Thepaper utilizes granger causality, unit root tests and Ordinary Least squaresregression to estimate the relevance of monetarization of the economy. Evidence from statistical data shows that causality exists from growth of GDP to monetarization of the economy, which was the main objective of this study. The unit root test reveals that growth of GDP is stationary at levels whereas Monetarization ratios are stationary atfirst difference. Theresults are consistent with economic theory. The major recommendation is that the government should reduce the restrictions on banks, especially the reserve ratio. This will allow banks to create more credit, and with competition lending rates will reduce, hence increased investments.
Harnessing the Demographic Dividend through Commercialization of Local Research in COMESA
(2018-08) Kosimbei, George K.
This study investigates the contribution of new knowledge and innovation as measured by the number of patents & scientific journals as well as the impact of total labour force on the manufacturing sector Gross Domestic Product (GDP). It employs the Fixed Effects method on a sample panel of 19 Common Market for Eastern and Southern Africa (COMESA) Member States for the period 2008 to 2016. FE estimation technique is preferred so as to addresses heterogeneity bias problem resulting from any correlation that may exist between the regressors and the country-specific effects. The results show that number of science journals and mobile cellular subscriptions are important factors in generating growth in manufacturing sector output in COMESA Member States. The young population is expected to gain by undertaking research and participating in its commercialization in the manufacturing sector. Access to mobile phones and ICT services plays a key role in sharing academic knowledge and research outputs with the manufacturers. These findings are consistent with results from other studies such as Mansfield (1997) and Vandenbussche et al. (2006) who established a positive association between scientific research and firms’ performance. These findings lead to the recommendation that COMESA Member States need to incentivize the youth to participate in research carried out by universities and public research institutes. This will also lead to commercialization of research output as some of the research involves invention of new products. There is also need to increase research funding and set up incubation centers to facilitate incubation and commercialization of innovative research outputs. In addition, there is need for support for provision of quality tertiary education that contextualizes research, innovation and entrepreneurship.
Remittances and Economic Growth in Kenya (1970-2010)
(2014) Ocharo, Kennedy Nyabuto
Statisticshow that remittances to Kenya have been increasing over the years. Studies on the effect of remittances on economic growthin Kenya are limited and have not included private capital inflows as one of the determinants of economic growth. This studyinvestigated the effect of remittances on economic growth in Kenya. Data was sourced for the World Bank's African DevelopmentIndicators and various Economic Surveys and Statistical Abstracts for the period 1970-20 IO. The study used the ordinaryleast squares estimation to determine the effects of remittances on economic growth. The study found that the coefficientof remittances as a ratio of gross domestic product was positive and significant. The Government of Kenya should putinplace policies that encourage remittances.
Social Capital and Rural Economic Development in Western Province of Kenya: An Empirical Analysis
(2013-09-05) Manyasa, E.O.
This study sought to fill an information gap on the determinants of social capital and its impact on rural economic development. The overall objective of this study was to examine formation of social capital and its role in rural economic development in Western province of Kenya. A survey design was adopted in which both primary and secondary data were collected from household heads, officials of organized community groups, selected opinion leaders in the study area and official records, between August 2006 and February 2007. Questionnaires, personal interview and focus group discussions were used to collect primary data, while secondary data were obtained from relevant government departments and governmental and non-governmental organizations‟ records. The data were analyzed both qualitatively and quantitatively. Parametric and non-parametric methods were employed in quantitative analysis. First, indices for both social capital and rural economic development outcomes were non-parametrically computed using weighted responses to specific questions. Then their determination was analyzed using the ordinary least squares method. A linear regression model was used to examine the determinants of social capital, while log-linear regression models were used to analyze the relationships between social capital and the three disaggregated outcomes of economic development, as well as the aggregate economic development outcome. The results show that household social capital was determined by ethnocentrism (clannishness), witchcraft beliefs, sub-location social capital, social interaction and community group activity. The aggregate household economic development was determined by household labor, sub-location physical capital, household social capital, household physical capital, probability of accessing financial capital, sex of the household head and social taxation. All outputs, as well as the aggregate outcome of household economic development process yielded positive elasticities with respect to household social capital. This implies that social capital was an important input into the rural economic development process. However, the study faced two main limitations: first, was lack of cooperation from a few of the sampled household heads and secondly, some problem of multicollinearity in the data. Nonetheless, the study recommends mobilization of rural communities against cultural practices such as belief in witchcraft and ethnocentrism as well as provision of networking opportunities for organized community groups in rural areas to enhance formation of social capital and promote rural economic development.
Will Nepad stem the social economic disparities in Africa?
(2003-09) Mambo, Godfrey
The new Partnership for Africa's Development (NEPAD) is a pledge by African leaders based on a common vision and shared conviction that they have a duty to promote economic growth, encourage strong nations, aim at high living standards and national security. NEPAD is the newest initiative geared towards getting Africa from the social and economic quagmire that is so characteristic of many African nations. The African Union (AU) is set to adopt NEPAD as its economic blueprint for Africa. NEPAD is not the first initiative aimed at improving Africa. Many other initiatives have been formed in previous years with varied results. Nepad continues to draw a lot of attention across Africa and the world at large, as it is seen as probably the best effort so far at Africa's development. There is anticipation at how much will be achieved under this initiative to which Kenya is a signatory. Whereas it may be early to 'judge' NEPAD there are pertinent issues that arise from the proposals contained in the NEPAD document, which are to be adopted by African countries. This paper therefore examines the various proposals and their application in Africa.

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