Determinants of government expenditure on public flagship projects in Kenya
Nganyi, Muyela Silas
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The Kenya Vision 2030 flagship projects expected to generate rapid and economic growth in the country are threatened by inadequate source of funding,. financial management problems and failure to link: policy, planning and expenditure budgeting. The projects have also continued to experience inadequacies in project appraisal and time overruns in implementation. Therefore, without a clear financial framework, aggregate fiscal indiscipline, resource misallocation and inefficient use of resources will militate against achieving targets set out in the Kenya Vision 2030. The overall objective of the study was to evaluate determinants of government expenditure on public flagship projects in Kenya. The specific objectives were to: evaluate the influence of planning process on government expenditure on public flagship projects in Kenya; estimate the influence of project appraisal criteria on government expenditure on public flagship projects in Kenya; evaluate the influence of source of funds on government expenditure on public flagship projects in Kenya;. Evaluate the influence of management responsibility on government expenditure on public flagship projects in Kenya. The theories reviewed in the study were public finance, budget, cost-benefit analysis and principal-agent which provided grounds for conceptual framework. The study employed descriptive research design and positivist philosophy. The influence of the independent on dependent variable was based on multiple regression model. The target population was the planned 348 flagship projects for the period 2008-2012. The unit of analysis was projects based on sample size of 96 selected using stratified simple random sampling. The data was collected using a questionnaire. The findings showed planning process had a significant positive influence in determining government expenditure on public flagship project in Kenya. Further, source of funds positively influence government expenditure on public flagship proj ects which indicates that governments need to widen its source of funds. In addition, management responsibility had a similar positive influence which showed that its improvement is likely to increase government on public flagship projects. From the study it is recommended that, public entities should strengthen and improve the planning process entailing deepening the use of MTEF within a PBB framework. Further, the National Treasury should increase the available resources required for financing public flagship projects with a view to consider public private partnerships as a potential source. The two areas suggested for further research were; the impact of project characteristics on the choice of PPP financing model; and the impact of fiscal decentralization on financing public projects in light of devolved systems of governance in Kenya.