Efficiency and Efficacy of Kenya's Constituency Development Fund: Theory and Evidence

Mwangi Kimenyi

No 2005-42, Working papers from University of Connecticut, Department of Economics

Abstract: Kenya's Constituency Development Fund (CDF) is one of the ingenious innovations of the National Rainbow Coalition (NARC) Government of Kenya. Unlike other development funds that filter from the central government through larger and more layers of administrative organs and bureaucracies, funds under this program go directly to local levels and thus provide people at the grassroots the opportunity to make expenditure decisions that maximize their welfare consistent with the theoretical predictions of decentralization theory. Increasingly, however, concerns about the utilization of funds under this program are emerging. Most of the concerns revolve around issues of allocative efficiency. In this note, I highlight some of the constituency characteristics that impact on the efficiency and efficacy of CDF and also some political economy aspects associated with this program. In particular it is observed that CDF could have negative outcomes because of fiscal illusion and reduced local fiscal effort. The paper recommends an in-depth analysis of constituency characteristics that impact on the utilization of funds to ensure that the program achieves its full potential.

JEL-codes: D21 D70 H60 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2005-04
New Economics Papers: this item is included in nep-pbe
Note: Research Concept Note
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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