his study empirically examined the effect of research and development on agricultural sector growthin East African Community from the year 2000-2014. According to the endogenous growth theory,research and development leads to increase in the stock of knowledge which in turn has got spill overeffects hence leads to economic growth. However, little is known on the effect of R&D on theagricultural sector in the EAC hence the study sought to bridge this knowledge gap. The objective ofthis study w...
Attaining a monetary union is an ambition for most regional economic blocks. However, the arrangement towards monetary union for the East African nations has remained indifferent. The inflation rate is critical for EAC members to achieve a level of harmonization required for establishing a stable and sustainable monetary union. Most existing studies on the relationship show conflicting results and mainly focus on developed countries. It was against this backdrop that the study sought to deter...
From previous studies, the effects of expenditure on economic growth appear to provide mixed results. Despite this uncertainty, theory suggests that expenditure induce growth. In Kenya, economic growth has been fluctuating despite the devolved expenditure increasing over time. It is against this background that this study was carried out to investigate empirically the short-run and long-run effect of components of county spending on growth in Kenya using panel data set over the period 2013 to...
Although it is theoretically expected that fiscal decentralization leads to efficient provision of local public servicesand induces economic growth, there is a mixed outcome of the non-devolved and devolved effect on economicexpansion across earlier empirical studies. This could be due to non growth-enhancing expenditures that crowdoutoutlays that are meant to boost economic growth. Further, devolved allocation is small, about 15 % of totalrevenue, to full stimulate economic growth in Kenya. ...
Using annual data from 1970-2010, this paper employs a panel fixed-effects model to estimate the effect of external debt, as a share of Gross Domestic Product (GDP), on economic growth in East Africa Community (EAC). This study was based on the Solow growth model augmented for debt. The Levin-Lin-Chu test (LLC) approach was used to investigate the properties of the data with respect to unit roots. The Hausman specification test was used to verify the panel fixed-effects model. The findings su...
This study, assuming a balanced budget, attempts to estimate the optimal devolved government size in Kenyausing the panel ARDL regression and Scully (2008) model for the period 2013-2017. The optimal devolvedgovernment size is determined to be around 9.7 percent of the GCP (Gross County Product). The estimatedthreshold size is higher than the current size of county government which stands at 5.4% of GCP. The panelanalysis suggests that the optimal size of government is higher than the current...
he level of private investment in Kenya, Rwanda and Burundi (KRB), as a percentage of real Gross Domestic Product, has been fluctuating over time since independence. Several studies have been carried out on regard to the macroeconomic determinants of private investment at country level, but the findings are inconclusive. Conversely, from the empirical literature review, these studies have failed to capture the impact of availability of credit on private investment in the three states. It is a...
The major objective of this study is scrutinizing the impact of government sectoral expenditure on economic growth in East African countries over the period from 1985 to 2015. It focuses on sectoral expenditures on health, education, defence and agriculture segments. The main contribution of this research is examining expenditure components in line with current government categorization to establish these sectoral budget allocations that have impact on economic growth in order to provide a gu...
Agricultural sector contribute about 36% of the East African Community’s Gross DomesticProduct (World Bank, 2009), 80 per cent of the populace depend on agriculture directly andindirectly for food, employment and income, while about 40 million people in EAC (East AfricanCountries) suffer from hunger and the agricultural sector still retains a lot of untapped potential,specifically for commercial farming. However, economic growth target for agriculture sector can beachieved by stimulating th...
This study examines the link between government expenditure and regional economic growth, overthe period 2013 to 2017. Gross County Product per capita growth is used as indicator of regionaleconomic growth. This study used Error Correction Model and Engle and Granger framework twostep procedure to investigate the long-run and short-run equilibrium relationship betweenexpenditure and regional growth. The analysis reveals that expenditure and regional growth are cointegratedand, hence a long-ru...
This research empirically explores the determinants of Kenya’s regional economic growth in the 47 counties over the period 2014 to 2017. Though economic policies aimed at enhancing regional growth were implemented, the economic performance has not been satisfactory hence the study seeks to find out what determines economic performance at the sub-national level. This research is based on the reduced Solow-Swan growth theoretical framework. The analysis techniques that were used in this study...
O presente estudo, assumindo um orçamento equilibrado, busca estimar a administraçãoideal de despesas de um governo descentralizado em 47 unidades subnacionaisdo Quênia por meio da regressão de painel ARDL e o modelo de Scully para o período2014-2018. O modelo de estimativa examinou a ideia de Armey de uma curva quadráticaque explica o nível de despesas governamentais e o nível correspondente decrescimento econômico. A análise do painel ARDL revela que o tamanho de governosdescentr...
This study, assuming a balanced budget, attempts to estimate the optimal size ofdevolved government expenditure in 47 Kenyan counties using the panel ARDLregression and Scully (2008) model for the period 2014-2018. The estimation modelexamined Armey’s idea of a quadratic curve that explains the level of governmentexpenditure in an economy and the corresponding level of economic growth. Thepanel ARDL series analysis reveals that devolved government size is optimized whencounty expenditures s...
Fiscal transfer development across the world today has been in part driven by assertions of a supposed ‘economic dividend’ linked with the devolved financial spending. There is, however, little empirical evidence to validate these assertions in Kenya. It is against this background that this study was carried out to estimate the end product of fiscal transfer on regional economic growth in Kenya using a secondary panel data set. Using the ARDL estimation technique the long-run and error co...
Public and private investment in agricultural research and development (R&D) createspreconditions for the implementation of more advanced and better technologies. It enables theintroduction of new production processes and products which can result in higher earnings andpotential sectoral economic growth in Agriculture. Despite the fact that accelerated agriculturalresearch and development is a catalyst for the beginning of the long-run economic activity, itsimportance is not widely investigat...