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Benefit Incidence Analysis of Constituencies Development Fund Spending on Education Bursaries in Makueni County, Kenya

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Benefit Incidence Analysis of Constituencies Development Fund Spending on Education Bursaries in Makueni County, Kenya BENEFIT INCIDENCE ANALYSIS OF CONSTITUENCIES DEVELOPMENT FUND SPENDING ON EDUCATION BURSARIES IN MAKUENI COUNTY, KENYA MAKALI B. MULU K96/12327/2009 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF DOCTOR OF PHILOSOPHY IN ECONOMICS TO THE SCHOOL OF ECONOMICS OF KENYATTA UNIVERSITY JUNE, 2015 DECLARATION This thesis is my original work and has not been presented for a degree in any other university or any other award. Signature ---------------------------------- Date ---------------------------------- Makali B. Mulu B.A (Hons), M.A (Economics) Reg.No. K96/12327/2009 This thesis has been submitted for examination with our approval as university supervisors. Signature ------------------------------ Date ----------------------------------- Prof. Nelson H Were Wawire Department of Applied Economics Kenyatta University Signature ------------------------------- Date ----------------------------------- Dr Susan O. Okeri Department of Econometrics and Statistics Kenyatta University Signature -------------------------------- Date ----------------------------------- Dr. Dianah Muchai Department of Econometrics and Statistics Kenyatta University i DEDICATION To my family for prayers, support, encouragement and patience ii ACKNOWLEDGEMENTS Above all, my sincere thanks and praises to our Almighty God who has brought me this far. Special appreciation and gratitude go to my supervisors Prof. Nelson H.W. Wawire, Dr. Susan Okeri and Dr. Dianah Muchai for immensely providing guidance and suggestions during the Thesis writing as well as showing keen interest in my research. Without their unwavering support and advice, this Thesis would never have become a reality. I also acknowledge the valuable comments and advice received from my lecturers at the School of Economics, Kenyatta University. I am equally indebted to my classmates Elphas Ojiambo, Maurice Ogada, James Karau, Mutuku Mutinda, Kennedy Ocharo, Fredrick Owiti, Herman Mwangi, Maina Mutuaruhiu, Charles Nyadenge and Maurice Ombok for their encouragement, inspiration and moral support. My dear wife Agnes Muindi Makali and our children Erastus Mwema, Jason Mulu, Stacy Ndaa and Irene Kavutha deserve special mention for their patience, prayers and encouragement. Finally, my special thanks to all who contributed in one way or the other in making this study a success. May God bless you all. iii TABLE OF CONTENTS DECLARATION ................................................................................................... i DEDICATION ..................................................................................................... ii ACKNOWLEDGEMENTS ................................................................................. iii TABLE OF CONTENTS ..................................................................................... iv LIST OF TABLES .............................................................................................. vii LIST OF FIGURES ........................................................................................... viii ABBREVIATIONS AND ACRONYMS ............................................................. ix OPERATIONAL DEFINITION OF TERMS ....................................................... xi ABSTRACT.... .................................................................................................. xiv CHAPTER ONE ................................................................................................... 1 INTRODUCTION ................................................................................................ 1 1.1 Background .............................................................................................. 1 1.1.1 Poverty Alleviation and Income Redistribution Strategies ......................... 9 1.1.2 Education as Anti-poverty Sectoral Policy Initiative ................................ 13 1.1.3 The Constituencies Development Fund.................................................... 18 1.1.4 Constituencies Development Fund Achievements and Challenges ........... 22 1.2 The Statement of the Problem.................................................................. 24 1.3 Research Questions ................................................................................. 26 1.4 Objectives of the Study ........................................................................... 26 1.5 Significance of the Study ......................................................................... 27 1.6 Organisation of the Study ........................................................................ 27 CHAPTER TWO ................................................................................................ 29 LITERATURE REVIEW ................................................................................... 29 2.1 Introduction ............................................................................................ 29 2.2 Theories of Fiscal Federalism .................................................................. 29 2.3 Empirical Literature ................................................................................ 33 iv 2.4 Overview of Literature ............................................................................ 49 CHAPTER THREE ............................................................................................ 52 RESEARCH METHODOLGY ........................................................................... 52 3.1. Introduction ............................................................................................ 52 3.2 Research Design ..................................................................................... 52 3.3 Theoretical Foundations of Benefit Incidence Analysis ........................... 53 3.4 Benefit Incidence Estimation Procedure .................................................. 60 3.5 Definition and Measurement of Variables ................................................ 65 3.6 Study Area .............................................................................................. 66 3.7 Target Population .................................................................................... 66 3.8 Sampling Technique and Sample Size ..................................................... 67 3.9 Data Type and Source ............................................................................. 69 3.10 Research Instruments .............................................................................. 70 3.11 Data Collection ....................................................................................... 70 3.12 Data Cleaning, Coding and Refinement ................................................... 71 3.13 Data Analysis .......................................................................................... 71 CHAPTER FOUR .............................................................................................. 73 EMPIRICAL RESULTS, INTERPRETATION AND DISCUSSIONS ............... 73 4.1 Introduction ............................................................................................. 73 4.2 Response Rate ......................................................................................... 73 4.3 Descriptive Statistics ............................................................................... 74 4.4 Distribution of CDF Educational Bursaries .............................................. 80 4.4.1 Distribution of CDF Bursaries by Nature of Engagement of Household Head ........................................................................................................ 80 4.4.2. Distribution of CDF Bursaries by Education Level of Household Head ... 83 4.4.3 Distribution of CDF Bursaries by Constituency ....................................... 85 4.4.4. Distribution of CDF Bursaries by Quintile ............................................... 86 4.4.5 Distribution of CDF Bursaries by Sex ..................................................... 88 v 4.5 Extent of Progressivity, Regressivity or Neutrality of CDF Spending on Education Bursaries ................................................................................. 90 4.6 Gender Dimension on Benefit Incidence Analysis of CDF Spending on Educational Bursaries ............................................................................ 106 CHAPTER FIVE .............................................................................................. 111 SUMMARY, CONCLUSIONS AND POLICY IMPLICATIONS .................... 111 5.1 Introduction ........................................................................................... 111 5.2 Summary of the Study ........................................................................... 111 5.3 Conclusion ............................................................................................ 116 5.4 Policy Implications ................................................................................ 118 5.5 Areas for Further Research .................................................................... 122 5.6 Limitations of the Study ....................................................................... 123 REFERENCES ................................................................................................. 124 APPENDICES APPENDIX 1: Data Collection Instruments ...................................................... 136 APPENDIX 11: Study Data .............................................................................. 139 vi LIST OF TABLES Table 1.1: Absolute Poverty Estimates in Kenya
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