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Fiscal Decentralization in Kenya: The Constituency Development Fund and the Growth of Government

  • Bagaka, Obuya

This paper explores the financial implications of fiscal decentralization policies on the central government's operating budget in Kenya. The paper evaluates how devolved funds under the constituency development fund (CDF) have been utilized to start healthcare capital projects (clinics) at the local level. The study finds that fiscal decentralization has promoted allocative efficiency and equity but at a cost of exporting tax burdens (operations and maintenance) to the central government emanating from capital projects implemented at the local level. The exported tax burdens have policy implications and call for reforms of the CDF program to reflect a benefit-expenditure structure.

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File URL: http://mpra.ub.uni-muenchen.de/11813/1/MPRA_paper_11813.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11813.

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Date of creation: 10 Oct 2008
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Handle: RePEc:pra:mprapa:11813
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Web page: http://mpra.ub.uni-muenchen.de

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  1. Hood, Ron & Husband, David & Fei Yu, 2002. "Recurrent expenditure requirements of capital projects - estimation for budget purposes," Policy Research Working Paper Series 2938, The World Bank.
  2. repec:cup:cbooks:9780521027922 is not listed on IDEAS
  3. Ernesto H. Stein, 1998. "Fiscal Decentralization and Government Size in Latin America," Research Department Publications 4112, Inter-American Development Bank, Research Department.
  4. repec:cup:cbooks:9780521233293 is not listed on IDEAS
  5. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  6. Sharma, Chanchal Kumar, 2004. "Decentralization Dilemma: Measuring the Degree and Evaluating the Outcomes," MPRA Paper 204, University Library of Munich, Germany, revised Nov 2005.
  7. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  8. Lindaman, Kara & Thurmaier, Kurt, 2002. "Beyond Efficiency and Economy: An Examination of Basic Needs and Fiscal Decentralization," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 915-34, July.
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