Decentralization, Ethnic Fractionalization, and Public Services: Evidence from Kenyan Healthcare

This paper examines the impact of ethnic fractionalization on public service use by exploiting a major constitutional reform in Kenya. Following an important period of inter-ethnic conflict, responsibility for local health services was decentralized to 47 newly created county governments. Crucially, this changed the ethnic composition of the administrative area responsible for healthcare, while leaving the composition of the local population unchanged. Using an event-study design, we find that use of public clinics for births increased significantly after the reform, but only in counties that were relatively ethnically homogeneous. We also find a significant increase in the correlation between county ethnic fractionalization and a range of other measures of public health service use. Using within-county variation to investigate mechanisms, we find healthcare use increases were concentrated among individuals of the same ethnicity as members of the new county government executives. Overall, the results suggest that more ethnically homogeneous sub-national jurisdictions can rapidly increase public service use.