Determinants o f Government Expenditure o n Public Flagship Projects i n Kenya

Abstract

The Kenya Vision 2030 flagship projects expected to generate rapid 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 continue to experience inadequacies in project appraisal and implementation time overruns. Therefore, without a clear financial framework, fiscal indiscipline, resource misallocation and inefficient use of resources will militate against achieving the Kenya Vision 2030 targets. The overall objective of this 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; source of funds; and 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, positivist philosophy and 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 stratified r andom sample while data was collected using a questionnaire. The findings showed that planning process, source of funds and management responsibility had significant positive influence in determining government expenditure on public flagship project in Kenya. The study recommended that, public entities should strengthen and improve planning process by deepening MTEF within programme based budgeting; the National Treasury should increase resources required for financing public flagship projects by considering public private partnerships as a potential source; and public entities should improve, strengthen and enforce management responsibility when designing public flagship projects. The two areas suggested for further research were; impact of project characteristics on the choice of Public Private Partnership financing model and impact of fiscal decentralization on financing public projects in light of devolved systems of governance in Kenya.