Devolution will reshape the country’s
institutional architecture, not just because of the transfer of functions and
finance, but also because it involves the creation of a forty-seven brand-new
counties which will bring together deconcentrated offices of many national
ministries, local authorities, and district administrations.
Kenyans have sky-high expectations of
what devolution will bring, but decentralization is not in-and-of itself a
panacea for development. Almost everywhere, at different times in history,
decentralization has been driven by political imperatives, not by economic
arguments.
The challenge for Kenya’s policy makers
in the next year and beyond will be to manage expectations carefully because
the risk of disappointment will be huge. To do this they will need to be
mindful of four paradoxes that will characterize the decentralization process
in this early phase of transition:
Paradox 1. What is politically
desirable is economically impossible.
Ideally, wealth and incomes should be distributed
evenly across Kenya’s 47 counties. This is economically impossible because
firms and individuals tend to locate where there are already clusters of
economic activity—which is mostly in the cities—so they can benefit from
“economies of scale.” Investments by companies
also tend to be lumpy—think of establishing a
factory—and thus geographically concentrated. This is why in Kenya most economic activity is concentrated along the
Northern corridor—from Mombasa to Nairobi and
onward to Kisumu and Kakamega—where the majority of
Kenyans live
Paradox 2. To make
decentralization work, you need strong central systems.
Some Kenyans want the central government to stay out of
devolution and leave it to the counties to manage their own affairs. In fact,
devolution requires sustained central coordination to be effective. Central
systems serve two main purposes: to make sure weaker counties’ needs are being
addressed through capacity building and that the spending and performance of
county governments can be compared on a common basis thanks to accountability
systems.
Paradox 3. If not managed
well, decentralization may lead to greater inequality. Some counties will
start at a relative disadvantage and it will take time to build up their
capacity. They will be the least equipped in practice to make efficient and
transparent use of their resources and retain the skilled staff that is
essential to making services work.
Paradox 4.Despite
decentralization, county governments won’t have a lot of additional resources
to spend. Counties will receive transfers from
the center but also inherit responsibility for delivering a wide array of
existing services. The size of the transfers for each county will also be
small. If the government would devolve 15 percent to sub-national governments,
each of the 47 counties will only receive 0.3% of national revenues. Counties
will have the latitude to shift funding to new uses but they will need to make
cuts in other services that are currently provided.
In many countries, decentralization is associated with
great hopes and disappointments. The disappointments resulted from a
misunderstanding of what decentralization can realistically achieve in the
short run.
One thing is
clear. To address spatial imbalances in lagging regions while maintaining
services where Kenya’s growth is generated, Kenya has to grow the cake while
splitting it. This would make sure that each slice of the cake is bigger.
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