An Empirical Study on the Moderating Effect of Public Governance on the Relationship Between Fiscal Decentralization and Performance of County Governments in Kenya

摘要

Various attempts undertaken by Kenya to restructure governance and publicexpenditure mandates from national to local levels have persisted since the 1960s.The promulgation of a modern constitution in the year 2010 dramatically andemphatically deconstructed the post-independence structure of government to amulti-layered system of governance. This paper uses panel data to investigate theeffect of public governance on the relationship between fiscal decentralization andperformance of County Governments in Kenya between the years 2013- 2018. Thekey indicators of public governance include human capital, accountability andcompliance with the laws. Three indicators of fiscal decentralization were identifiedas equitable revenue from National Government, local revenues and transfer grantsfrom other development partners. Performance was assessed in terms of howgovernments promote the wellbeing of citizens, through reduction of poverty andinequality levels, and a general increase in the living standards at the family,corporate and societal level. In order to measure and explain performance,consumption of food and non-food items were computed and summed up per county.Multiple regression and correlation analysis were used to estimate both the directand interaction effects of the parameters of the model. The study was descriptiveand the panel datasets offered a comprehensive profile of the variables identified inthe conceptual framework. Results indicate that Public Governance had amoderating influence on the relationship between fiscal decentralization and theperformance of county governments in Kenya.