Political Economy in Kenya

1. Political Economy in Kenya By Sahr Kpundeh

2. Politics in Kenya • New Coalition Government took office in December 2002 • Addressing corruption was a big campaign promise • Strong opposition that organized to defeat an incumbent party that has been in power for over 20 years. • Dominant President (Daniel arap Moi) who controlled almost everything, including suppressing opposition, civil society and the media. • Lots of goodwill from Development Partners to support new Coalition Government

3. Challenges • Difficult entry points for reform due to entrenched corruption, executive dominance, and a culture of lack of accountability and transparency, including weak rule of law and inefficient service delivery mechanisms. • Weak civil society due to poaching by new Government. • Managing the unrealistic expectations from citizens • Over-promising by new Government (jobs, anti-corruption actions, code of conduct, etc). • major focus on “getting the rascals” out of government • Unpredictable responses to support from Development Partners • Role of politics---coalition government does not translate into coalition of reformers (some were old players from previous government and had a clear agenda)

4. Reform Agenda for new Government • The new Government’s strategy to improve public sector effectiveness was outlined in its Poverty Reduction Strategy Paper (PRSP), titled the Investment Program for the Economic Recovery Strategy for Wealth and Employment Creation. • The Strategy centers on three inter-linked pillars: (a) strengthening economic growth; (b) enhancing equity and reducing poverty; and (c) improving governance.

5. How We Responded A number of Analytical and empirical work was done that influenced our response especially in the area of designing our on-going public sector reform support program. • Wage Bill Study • Understanding Politics and potential entry points for reform (Joel Barkan before elections) • Transparency International Annual Surveys on corruption • Report on IFMIS • Public Expenditure Reviews • Leadership and Ethics pilots—Results-based management • CFAAs, and CPARs • Studies conducted on APNAC, especially the local chapter in Kenya • Other local studies especially the “Name and Shame Report” • Lessons learned from on-going PSM-TAP project –institutional arrangements, composition of Steering Committee, forensic audits

6. How we used Knowledge of Political Economy • Decision to re-engage with Government with new CAS aligned to support the Government’s program • Links with ERSSC—capacity building support for meeting prior actions and subsequent benchmarks (Capacity Building Fund) • IRCB design---focus on delivering results—supportive for transformative leadership, change management and public sector values and ethics as critical elements to be addressed as part of capacity building for public sector reforms to succeed. • No support to Civil Service Reform due to unwillingness of new government to take tough action • Push for greater harmonization and alignment of operational policies, procedures, and practices between development agencies with the Government’s medium-term planning, budgeting, and disbursement procedures can help enhance the effectiveness of support to the Government. • Strong leadership is required from the Cabinet which demonstrates political will, as well as Permanent Secretaries and Accounting officers, who have the primary responsibility of spearheading public Sector Reforms (no more Dream Team). • A long-term strategic approach to technical assistance, which is not donor driven, is needed to achieve results. No quick fix approach to reform.

7. Lessons Learned • Important to understand and appreciate the political economy dynamics in a country to help you have a sense of what is holding back reforms in a country and the potential entry points. • Importance of collective action---involving other stakeholders in playing a role in a reform agenda • Important role of the Media in pushing for change and helping to enhance transparency and accountability • The “one man show” approach does not work in the new dispensation of politics and openness in Kenya. Reforms are bigger than one individual. • Demonstrated ability of “wounded leadership” to take some tough action when necessary helps to keep momentum for reform moving forward. The President’s response to the “referendum” was unique in a way by gracefully accepting defeat and taking steps to keep his Government together. • Need to go beyond populist actions and make tough decisions for the good of the country—Goldenberg revisiting, judiciary review, pay raise deals struck with key service delivery sectors, etc., has put the Government in a difficult situation regarding the affordability of the wage bill.