State vs Consumer Regulation: An Evaluation of Two Road Safety Interventions in Kenya

24 Pages Posted: 15 Sep 2012

See all articles by James P. Habyarimana

James P. Habyarimana

Georgetown University; Institute for the Study of Labor (IZA)

William Jack

World Bank

Date Written: September 2012

Abstract

This paper compares the relative impact of two road safety interventions in the Kenyan minibus or matatu sector: a top down set of regulatory requirements known as the Michuki Rules and a consumer empowerment intervention. We use very detailed insurance claims data on three classes of vehicles to implement a difference-in-differences estimation strategy to measure the impact of the Michuki Rules. Despite strong political leadership and dedicated resources, we find no statistically significant effect of the Michuki Rules on accident rates. In contrast, the consumer empowerment intervention that didn't rely on third party enforcement has very large and significant effects on accident rates. Our intent-to-treat estimates suggest reductions in accident rates of at least 50%. Our analysis suggests that in institutionally weak environments, innovative consumer-driven solutions might provide an alternative solution to low quality service provision.

Suggested Citation

Habyarimana, James P. and Jack, William G., State vs Consumer Regulation: An Evaluation of Two Road Safety Interventions in Kenya (September 2012). NBER Working Paper No. w18378. Available at SSRN: https://ssrn.com/abstract=2147089

James P. Habyarimana (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Institute for the Study of Labor (IZA)

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

William G. Jack

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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