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Inequalities diagnostic and fiscal incidence study in Kenya

Recherche sur les inégalités
Fighting Inequalities
Diagnostic des inégalités et étude de l’incidence fiscale
© James Keogh / AFD
Project start date
2018
Status

Completed

Project end date
2020
AFD financing amount
119 828
Country and region
Kenya
Location
Kenya
Partners
School of Economics – University of Nairobi
Research program
Research on inequalities

Although substantial progress has been made in the fight against poverty, disease, and illiteracy since independence in Kenya, a remaining challenge is linked to inequality. An understanding of inequality causes would help design and implement policies to eliminate it and avert other social problems.

Contexte

Over the last twenty years, poverty has declined in Kenya. The poverty rate has fallen from 52% of the population in 1997 to 36% of the population in 2015. However, in 2015 income inequality was still large with more than half of total wealth controlled by the 20% richest of the population. An assessment of inequality causes could help design and implement policies to eliminate it. In particular, policies with well-designed redistributive fiscal components could play a substantial role in reducing income inequality.

This project is part of the first phase of the Research Facility on Inequalities, coordinated by AFD and funded by the European Commission's Directorate-General for International Partnerships over the 2017-2020 period. The first phase of the Facility has led to the conduct of 22 research projects and the publication of around 100 research papers and policy briefs.



 

Objectif

The proposed research program has two objectives: 

  • Documentation of inequality and poverty trends in Kenya since independence and diagnosis of their main drivers;
  • Assessment of the impact of fiscal policies on inequalities in Kenya.

Méthode

First, the Kenyan National Household Budget Surveys will be used to analyse poverty and inequality trends over a long period of time. These datasets will also be used to assess which factors perpetuate inequalities in the country.

Then, the Commitment to Equity methodology (Lustig and Higgins, 2017) will be used to conduct an in-depth assessment of the impact of fiscal policies on inequalities and poverty. It would enable to analyse who mostly pays taxes and who benefits from transfers and public spending in the country and what fiscal policy instruments have the greatest impact on inequality reduction.

Résultats

The research project will result in two research papers, as well as workshops and policy briefs to disseminate the results to policymakers.

You may find the research paper here:

You may find the policy briefs here:

Contact:

Hélène Ehrhart, Research Officer, AFD

Anda David, Research Officer, AFD

Professor Germano Mwabu, University of Nairobi