Determinants of Revenue Mobilization by County Governments: A Case of Kericho County, Kenya

Abstract

In all economies around the world, revenue mobilization is critical to improving public service delivery. Methods used in revenue mobilization are an integral part of financial policy and structure in a given economy. The Kenya’s devolved governments were established to solve issues of equitable revenue allocation and to decentralize authority from the national government to devolved entities. However, county governments have been experiencing many challenges in collecting and accounting for the revenue mobilized. The rationale of this research was to assess the factors that influence effective revenue mobilization by Kericho County. The objective of the study was to establish how automated systems, legislation and employees’ competence affected revenue mobilization in Kericho County. This study could be useful to both the devolved government entities and national policymakers. The study adopted the sequential theory of decentralization and the revenue-based view theory. The study used a descriptive survey design. Data was collected by use of structured questionnaires, which had both open ended and closed questions. The analysis of the data collected was done using SPSS version 24. Inferential and descriptive statistics were used to interpret the collected data. The study established that the automation systems positively and significantly influenced revenue mobilization (r = 0.588**; p< 0.05). Legislation moderately strongly, affirmatively and significantly influenced on revenue mobilization (r = 0.398**; p < 0.05). Employee competence and revenue mobilization had a positive, robust and a statistically significant (r = 0.438**; p < 0.05) relationship. The regression results illustrated that out of the three independent variables, employee competence was the most important followed by automation of systems and lastly legislation. It was concluded that automation of systems, legislation and employee competence in combination were important tenets that can enhance revenue mobilization in Kericho County. It was recommended that the County government of Kericho ought to uphold developing employee competence, re-look into legislation and strengthen the automated systems to further improve on revenue mobilization