Public Expenditure Effect on Household Welfare in Kenya
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Date
2025-10-25
Journal Title
Journal ISSN
Volume Title
Publisher
IOSR Journal of Economics and Finance (IOSR-JEF)
Abstract
Background: One tool that governments utilize to enhance household wellbeing is public expenditure. The
United Nations emphasized in 2005 that governments would need to increase public spending in the areas of
agriculture, health, infrastructure, and education if the Millennium Development Goal targets were to be
realized. This was stressed even more in 2015 under the United Nations 2030 Agenda for Sustainable
Development. Between 2006 and 2022, public spending on health, infrastructure, agriculture, and education
grew by almost 25 per cent of total national spending in Kenya. Compared to the 2030 Sustainable
Development Goal of eradicating poverty, the projected number of impoverished individuals in 2021 was 38.6
per cent, in the field of education, the enrollment rates for primary and secondary schools were 47.8 per cent
and 88.4 per cent, respectively, in 2015, falling short of the Sustainable Development Goal objective of 100 per
cent target. In the health sector despite the Sustainable Development Goals' aim of fewer than 25 deaths per
1,000 live births by 2030, the maternal mortality rate remained high in 2022, with 41 deaths per 1,000 live
births. Kenya will not be able to meet the Sustainable Development Goals by 2030, which include poverty
eradication, healthy within the nation, if these trends continue. An increase in public expenditure on health and
education without corresponding effects on household welfare has raised concerns among policymakers. Thus,
the goal of the study was to ascertain how public spending affects household welfare in Kenya.
Methodology: The study used data from the Basic Report on Well-Being, which is an extract from the Kenya
Integrated Household Budget Survey for the 2015–16 year. Public expenditure data at the county levels
covering all the 47 counties for the period 2014 to 2016 were used in the analysis, taking the county as the unit
of study. The study used Ordinary Least Squares method to address the objective.
Results: The study found that there was empirical support that a 1 per cent increase in government spending on
agriculture would enhance household welfare by 0.1 per cent and 0.3 per cent, respectively, with regard to food
and non-food household consumption. In addition, the study found that household welfare would improve by
0.18 per cent in terms of aggregate household consumption when the government increases public expenditure
on agriculture by one percent. However, the study established that public spending on education had a positive
impact on household welfare in terms of food and total household spending, whereas public spending on health
per capita only had a positive impact on household spending on nonfood items.
Conclusion: The study concluded that both national and county governments should allocate more funds to
infrastructure, education, and agriculture, so that to improve household welfare status among Kenyan citizens
Description
Research Article
Keywords
Citation
Mala, H. O., Omolo, J., & Etyang, M. (2025). Public expenditure effect on household welfare in Kenya. IOSR Journal of Economics and Finance (IOSR-JEF), 16(5), Ser. 6, 8–23. https://doi.org/10.9790/5933-1605060823