Road Transport Infrastructure and Economic Growth in Kenya

The empirical debate on the role of road transport infrastructure on domestic economic growth is inconclusive and is characterized by two main opposing views: the road-led economic growth hypothesis and the distorting effect of infrastructure growth hypothesis. The objective of this paper is to examine the effect of road transportation infrastructure on economic growth in Kenya using time series data over the period 1990-2020. Empirically, the study develops a transport-growth model that is an extension of Solow (1956) neoclassical growth function and estimates the model with time series data of Kenya. The study adopted Autoregressive Distributed Lag (ARDL)
model and Granger causality approach as the technique for testing the study relationship. The key finding of this study demonstrated that the growth in road length as proxied by road sector expenditure contributed positively to economic growth in both short-run and long run. Applying error correction model, it was observed that there is causality between road infrastructure development and economic growth. This study, therefore, interrogates and accepts the infrastructure–growth hypothesis that increased road transport infrastructure stimulates long-run economy expansion in the Kenyan context. The study suggests that expansion of road transport infrastructure will
lead to substantial growth of the Kenya economy though gross capital formation. Therefore, within its stated scope, this finding informs the formulation of relevant and vibrant study transport policy to boost road infrastructure growth and hence sustainable economic growth in Kenya.