Effects of Fiscal Decentralization on Poverty Reduction in Kenya
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Date
2018-01-31
Authors
Mwiathi, Peter Silas
Wawire, Nelson H.W.
Okelo, Perez A. Onono
Journal Title
Journal ISSN
Volume Title
Publisher
International Educative Research Foundation and Publisher
Abstract
The Kenya government has instituted fiscal decentralization over the years to promote social economic
development, reduce poverty and income inequality and ensure balanced regional development. Despite
these efforts, poverty levels have remained high in Kenya. The literature on the relationship between fiscal
decentralization and poverty has been rather inconclusive about the effects of fiscal decentralization on
poverty. The main objective of this paper was to analyse the effects of fiscal decentralization on poverty
in Kenya. Using cross-county panel data from 2002 – 2014 and published data from government agencies,
UNDP reports and World Bank reports, the paper estimated various empirical models to analyse the
effects intergovernmental transfers, sub-national own-source revenue and county expenditure on poverty
in Kenya. The study established that the effect of fiscal decentralization on poverty depends on the nature
of decentralization and the extent of fiscal decentralization as well as the county specifics. The paper
therefore, recommends the need for for county governments to have adequate own-source revenue to
finance their expenditure as opposed to relying on intergovernmental transfers from national government.
Description
A Research Article in the
Keywords
Fiscal Decentralization, Poverty Reduction
Citation
Mwiathi, P. S., Wawire, N. H., & Onono, P. A. (2018). Effects of Fiscal Decentralization on Poverty Reduction in Kenya.