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Implementing inequality diagnostic and studying fiscal incidence
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.
Context

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 a European facility for a research program on inequalities in developing and emerging countries which is coordinated by the AFD. Financed by the Development Cooperation Instrument of the European Union, this facility enables to implement 20 research projects over the period 2017-2020, in partnership with donors and research centers from the South to the North.



 

Goals

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.
Method

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.

Results

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

Teachings
01/12/2018
Project start date
01/05/2020
Project end date
Kenya
Location
119 828
Financing amount

Contact:

Hélène Ehrhart, Research Officer, AFD

Anda David, Research Officer, AFD

Professor Germano Mwabu, University of Nairobi
 

The content of this project information sheet falls under the sole responsibility of the AFD and does not necessarily reflect the opinions of the European Union.