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Reforming Kenya: Explaining the Influence of Internal and External Actors in the Process of Liberalization

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Reforming Kenya: Explaining the Influence of Internal and External Actors in the Process of Liberalization University of Denver Digital Commons @ DU Electronic Theses and Dissertations Graduate Studies 1-1-2012 Reforming Kenya: Explaining the Influence of Internal and External Actors in the Process of Liberalization Figaro Joseph University of Denver Follow this and additional works at: https://digitalcommons.du.edu/etd Recommended Citation Joseph, Figaro, "Reforming Kenya: Explaining the Influence of Internal and External Actors in the Process of Liberalization" (2012). Electronic Theses and Dissertations. 838. https://digitalcommons.du.edu/etd/838 This Dissertation is brought to you for free and open access by the Graduate Studies at Digital Commons @ DU. It has been accepted for inclusion in Electronic Theses and Dissertations by an authorized administrator of Digital Commons @ DU. For more information, please contact [email protected],[email protected]. REFORMING KENYA: EXPLAINING THE INFLUENCE OF INTERNAL AND EXTERNAL ACTORS IN THE PROCESS OF LIBERALIZATION __________________ A Dissertation Presented to the Faculty of the Josef Korbel School of International Studies University of Denver __________________ In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy __________________ by Figaro Joseph June 2012 Advisor: Dr. Rachel Epstein ©Copyright by Figaro Joseph 2012 All Rights Reserved Author: Figaro Joseph Title: REFORMING KENYA: EXPLAINING THE INFLUENCE OF INTERNAL AND EXTERNAL ACTORS IN THE PROCESS OF LIBERALIZATION Advisor: Dr. Rachel Epstein Degree Date: June 2012 ABSTRACT This dissertation examines the influence of internal and external actors in pressuring Kenya to embrace liberalization during the Moi presidency. It argues that internal actors had more influence than external actors such as the World Bank and the International Monetary Fund (IMF) in forcing the Moi government to concede to liberalization. To make its argument, the dissertation analyzes the influence of Kenya‘s colonial history, Harambee (self-help groups), the economic decline of the 1970s and 1980s, ethnic rivalry, and the role of Moi‘s repressive regime in bringing about liberalization. It uses Kenya‘s agricultural and financial sectors as case studies to explain how the influence of these actors/factors contributed to liberalization. The dissertation concludes by emphasizing why it is important to seriously consider the role of internal actors when examining liberalization (or any other reform policies). One reason is that the ―on-the-ground‖ actors are primary in determining whether or not a policy can even be implemented, let alone succeed. In that respect, the dissertation recommends that international financial institutions consult with all domestic actors, including political and social activists, as part of their engagement with governments on any reform initiative. ii ACKNOWLEDGMENTS Since the day I arrived in the United States from Haiti with only enough English to introduce myself, countless people have encouraged me to go to college. This dissertation is to say thank you to them. Many people over the last seven years have helped me tremendously in this project by giving me their time, advice, and even financial support. I could not have completed this project without their support. A special thank you to my wife and friend, Ashley Joseph, whose love, patience, and encouragement allowed me to complete this project. In Kenya, thank you to Dr. Peter Wanyande at the University of Nairobi for sponsoring my access to the university‘s library. His sponsorship also allowed me access to Kenya‘s National Archives where I learned a great deal not only about my topic but also about Kenya and its people. Dr. Musambayi Katumanga at the University of Nairobi was very gracious with his time in granting me two interviews, each lasted more than 3 hours. Thank you to Dr. Lilian Kirimi at the Tegemeo Institute of Agricultural Policy and Development at the Egerton University for giving me over two hours of interview on Kenya‘s agricultural policy and development. Thank you to Njoki Njoroge Njehu and Soren Ambrose for hosting me. Lastly, the members of my dissertation committee deserve a special recognition. Drs. Rachel Epstein and Martin Rhodes spent countless hours through three different drafts. I cannot thank them enough for their advice and guidance. iii Table of Contents List of Tables………………………………………………………………………...vi CHAPTER ONE: INTRODUCTION, REVIEW OF LIBERATURE, METHODOLOGY, STRUCTURE OF THE DISSERTATION…………………………………………………....1 1.1 Review of the Literature.........................................................................3 1.2 Definition of Terms.............................................................................11 1.3 Case Selection......................................................................................12 1.4 Methodology........................................................................................19 1.5 Structure of the Dissertation................................................................21 CHAPTER TWO: HISTORY AND PRESSURE FOR LIBERALIZATION…….………...……………..…24 2.1 Pre-colonial Kenya...............................................................................27 2.2 Colonial Kenya.....................................................................................28 2.3 Mau Mau Rebellion..............................................................................33 2.4 Emergence to Tribal Politics................................................................36 2.5 Postcolonial Kenya...............................................................................41 2.6 Ethnic Affinities and State Resources..................................................43 2.7 Private Property Rights (Land Tenure System)....................................45 2.8 Conclusion............................................................................................54 CHAPTER THREE: MOI, POLITICAL AND ECONOMIC PRESSURES: KENYA MOVING TOWARD REFORM……..........................................................................................…………...56 3.1 Ethnic Rivalry........................................................................................61 3.2 Economic Decline..................................................................................64 3.4 The Power of Popular Pressure..............................................................69 3.5 External Pressure as a Complement to Internal Pressure......................72 3.6 Conclusion.............................................................................................79 CHAPTER FOUR: PRIVATIZATION AND LIBERALIZATION: AGRICULTURAL SECTOR REFORM IN KENYA…………...............………….……………..………………………….…81 4.1 Forms of Privatization..........................................................................83 4.2 Importance of the Agricultural Sector and Pressure to Reform...........87 4.3 IFI Support and Reform........................................................................90 4.4 Role and Functions of Marketing Boards and Co-operatives...............93 4.5 Kenya Co-operative Creameries and Dairy Market.............................96 iv 4.6 Reformed KCC and Dairy Market and other Agricultural Boards.......99 4.7 Ending Subsidies to Farmers..............................................................106 4.8 Conclusion..........................................................................................110 CHAPTER FIVE: PRIVATIZATION AND LIBERALIZATION: FINANCIAL SECTOR REFORM IN KENYA……..….……………………...………..………………………………112 5.1 Shifting Role of the State in the Financial Sector...............................114 5.2 Controls on Foreign Exchange and Investors and Favoring Domestic Investors..............................................................116 5.3 Lifting Controls on Foreign Exchange and Investors.........................119 5.4 Parastatals and Privatization of Financial Institutions........................125 5.5 Addressing Public-Sector Corruption.................................................132 5.6 Conclusion…......................................................................................136 CHAPTER SIX: CONCLUSION: THE LIMITS OF EXTERNAL INFLUENCE AND THE POWER OF DOMESTIC ACTORS AND FACTORS…………………………….…...138 6.1 Concluding Analysis...........................................................................138 6.2 Limits of External Actors and Aid Suspension..................................141 6.3 Resilience of Domestic Factors: Customary Land Rights..................143 6.4 Effects of Colonialism and Ethnic Politics.........................................146 6.5 Implication of Domestic-actors Focused Study for Reform...............149 APPENDICES: APPENDIX A: Maps and Selected Statistics on Kenya…….............…….147 APPENDIX B: Selected Events under President Moi…………..…………151 APPENDIX C: World Bank Loans to Kenya‘s Agricultural Sector, 1960-1997…………………………..157 APPENDIX D: IMF‘s Arrangements with Kenya, 1980-2000………....…159 APPENDIX E: List of Interviews……………………….....……………....163 REFERENCES………………………….…………………………………………165 v List of Tables Table 1: Kenya 2009 Census (Population: 38,610,097).…..…….….....……............26 Table 2: Laws Affirming Individual Land Rights…………………………………..47 Table 3: Land Transfers……………………………………………………………..48 (a) Small Holder Settlement...........................................................................48 (b) Large Farms..............................................................................................48 Table 4: Unregistered Tenants‘ Reactions to Hypothetical
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