Njihia, Dennis Kiiru2025-07-252025-07-252025-06https://ir-library.ku.ac.ke/handle/123456789/30869A Research Project Submitted to the Department of Applied Economics in Partial Fulfillment of the Requirements for the Award of Master of Economics (Cooperation and Human Development) of Kenyatta University, June 2025 Supervisor; 1.Charles NzaiKenya, as a developing nation, has made significant investments in infrastructure projects, including roads, railways, ports, and energy, in recent years. Such infrastructure development has led to far-reaching implications for various sectors of the economy. Accessible and efficient road infrastructure are essential for farmers to transport their produce to markets and consumers, enabling economic growth and income generation. However, despite the prior expectations of theory on the relationships between improved road infrastructure and economic growth and poverty levels, data for Kenya revealed contrary behavior which warranted investigation. This study assessed the effect of road infrastructure on economic development in Kenya. The specific objectives were; to establish the effect of road infrastructure on economic growth in Kenya, to establish the effect of road infrastructure on levels in Kenya; and to establish the effect of road infrastructure on per capita income in Kenya. The study was based on four theories namely; infrastructure investment theory, spatial linkages theory, Solow neoclassical growth theory and Theories on Poverty. A longitudinal research design was adopted. The study utilized time series secondary data from 1991 to 2021 on an annual basis. The data was obtained from the World Bank and the Kenya National Bureau of Statistics. The study adopted Autoregressive Distributed Lag model and Granger causality approach as the technique for testing the study relationships. Diagnostic tests such as normality, Multicollinearity, heteroskedasticity and autocorrelation was conducted to ensure that the assumptions of regression analysis are not violated. Ethical considerations were adhered to by obtaining permit from National Commission for Science, Technology and Innovation, Kenyatta university graduate school and the permission from the ethical committee. The short run effect was analysed using error correction model informed by the positive cointegration status of the variables all the models. Road infrastructure, labour participation and institution quality index significantly affected economic growth. However, technological growth did not have significant effect on economic growth. On the other hand, Technological growth and institutional quality index had a positive and significant influence on per capita income. Population growth has an inverse and significant influence on per capita income. Labour participation influence on per capita income was found to be statistically insignificant. In addition, road infrastructure and institutional quality index have significant influence on poverty reduction. However, human development index did not have significant influence on poverty reduction. It can be concluded that based on empirical results technological progress has not been fully utilized to generate economic growth. Adoption of institutional quality index has been underwhelming and this has impeded per capita income. Potential of human development index has not been fully exploited and this has slowed down poverty reduction initiatives in the country. The study recommends more comprehensive approach to foster human development index in poverty reduction. This can be realized by making healthcare and education affordable through programs such as universal health care and subsidized education. It is also important to point out that to create a conducive environment for innovation and technological growth to enhance economic growth. This can be attained by having tax haven for the inaugural innovators to sustain their motivation. Strong institutions are defined by adherence to the rule of law and conformity to legislation. There is need for people in public sector to embrace the rule of law and existing regulation to reduce theft and corruption.enThesis