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

Proceedings of 20th Annual Conference of the Association for Budgeting and Financial Management, Chicago, October 23-25, 2008

43 Pages Posted: 8 Dec 2008

See all articles by Obuya Bagaka

Obuya Bagaka

Northern Illinois University, Department of Political Science

Date Written: October 23, 2008

Abstract

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.

Suggested Citation

Bagaka, Obuya, Fiscal Decentralization in Kenya: The Constituency Development Fund and the Growth of Government (October 23, 2008). Proceedings of 20th Annual Conference of the Association for Budgeting and Financial Management, Chicago, October 23-25, 2008 , Available at SSRN: https://ssrn.com/abstract=1312983

Obuya Bagaka (Contact Author)

Northern Illinois University, Department of Political Science ( email )

Department of Political Science
Behavioral Science Building
Chicago, IL Illnois 60607
United States
312-996-3105 (Phone)
312-413-0440 (Fax)

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