Public Expenditure, Household Welfare and Income Distribution in Kenya
| dc.contributor.author | Mala, Hanningtone Okendo | |
| dc.date.accessioned | 2026-03-05T08:50:34Z | |
| dc.date.available | 2026-03-05T08:50:34Z | |
| dc.date.issued | 2025-11 | |
| dc.description | A Thesis Submitted to the School Of Business, Economics and Tourism in Partial Fulfillment of the Requirements for the Award of a Doctor of Philosophy Degree in Economics of Kenyatta University. November, 2025 Supervisors Martin N. Etyang’ Jacob Omolo | |
| dc.description.abstract | One tool that governments utilize to affect income distribution and 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. The Constitutional mandate that allocates 15 per cent of national revenue to county governments and one-half percent to marginalized areas has reinforced agenda. Income inequality has remained high at an average Gini coefficient of 0.386 since 2015/16. In 2021, the Gini coefficient was 0.389. 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 living and equitable distribution of income within the nation, if these trends continue. An increase in public expenditure on health and education without corresponding effects on household welfare and income inequalities has raised concerns among policymakers. Thus, the goal of the study was to ascertain how public spending affects household welfare in Kenya, as well as how it varies depending on the region's economic bloc. It also aimed to assess the effect of public spending on income distribution in Kenya. The study used a non-experimental research approach using 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 in analyzing objectives one and three while Seemingly Unrelated Regression technique was used to estimate consumption expenditure share equations. The study estimated Ordinary Least Squares and found 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. A 1 per cent rise in government expenditure on agriculture per capita lowers income inequality in the first and second quintiles by 0.7 and 0.5 percentage points, respectively, according to the study's estimation of the Seemingly Unrelated Regression model. This implies that governmental expenditure on agriculture per capita has a favorable effect on income distribution by aiding the impoverished. The study further found that income distribution in the lowest quintiles would improve by 0.2 percentage points with a 1 per cent increase in public spending on infrastructure per capita. On the other hand, the study did not find any empirical evidence that public expenditure on health per capita have an effect on income distribution in all the income groups. Regionally, according to the study, increased public funding for infrastructure, health care, and agriculture is necessary for the Coast, South Eastern Kenya, Frontier Counties Development Council, Mount Kenya, and Aberdare economic blocs to achieve better welfare status for their population. The study concluded that both the national and county governments should increase funding for infrastructure, education, and agriculture in order for the government to improve household welfare status and income distribution among Kenyan citizens, as these specific expenditures are necessary. | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/32650 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Public Expenditure, Household Welfare and Income Distribution in Kenya | |
| dc.type | Thesis |