Incentive Structure and Efficiency in the Kenyan Civil Service

incentives, civil service, Kenya

Incentive Structure and Efficiency in the Kenyan Civil Service

Abstract Kenya's civil service expanded rapidly after independence, becoming by far the largest in East Africa. Following economic decline since the 1980s, however, it became difficult for the government to sustain a large and inefficient public sector. To raise efficiency, extensive civil service reforms and changes in its incentive structure were necessary to reflect the government's new priorities. The main factors affecting performance in the civil service include low salaries and allowances for the civil servants, lack of equipment and office space, poor compensation, absence of a career-development structure, and poor delegation. This paper examines factors affecting efficiency in the Kenyan civil service with emphasis on incentive structures, ranging from wage emoluments, training and promotion procedures and sanctions against poor performance. Several incentive realignments for improving efficiency in the civil service emerge. First, salaries and other emoluments of the civil service should be improved to a level deemed conducive to increasing morale and productivity and maintained to preserve it in real terms via periodic reviews and in line with macroeconomic developments. The existing huge gaps between government and private sector wages for highly skilled workers should be narrowed to enable the government to retain its productive staff. Currently, retrenchments are used to reduce the size of the civil service and to improve productivity, but the government has been too slow in improving its working conditions so as to realise positive impacts of a smaller and flexible civil service. …/

Incentive Structure and Efficiency in the Kenyan Civil Service

Abstract Kenya's civil service expanded rapidly after independence, becoming by far the largest in East Africa. Following economic decline since the 1980s, however, it became difficult for the government to sustain a large and inefficient public sector. To raise efficiency, extensive civil service reforms and changes in its incentive structure were necessary to reflect the government's new priorities. The main factors affecting performance in the civil service include low salaries and allowances for the civil servants, lack of equipment and office space, poor compensation, absence of a career-development structure, and poor delegation. This paper examines factors affecting efficiency in the Kenyan civil service with emphasis on incentive structures, ranging from wage emoluments, training and promotion procedures and sanctions against poor performance. Several incentive realignments for improving efficiency in the civil service emerge. First, salaries and other emoluments of the civil service should be improved to a level deemed conducive to increasing morale and productivity and maintained to preserve it in real terms via periodic reviews and in line with macroeconomic developments. The existing huge gaps between government and private sector wages for highly skilled workers should be narrowed to enable the government to retain its productive staff. Currently, retrenchments are used to reduce the size of the civil service and to improve productivity, but the government has been too slow in improving its working conditions so as to realise positive impacts of a smaller and flexible civil service. …/

Human Capital Externalities and Private Returns to Education in Kenya

We use survey data of full-time workers in Kenya to analyse the effect of human capital externalities on earnings and private returns to education. The estimation results show that education human capital generally associates with positive externalities, indicating that an increase in education benefits all workers. However, the results reveal that men benefit more from women's education than women do from men's schooling. The effects of human capital externalities on private returns to schooling are shown to vary substantially between rural and urban areas and across primary and higher levels of education.

Educational expansion and economic decline: returns to education in Kenya, 1978-1995

Educational expansion followed by economic decline in Kenya has been associated with a decline in the social return to secondary education, conventionally calculated, from 20% in 1978 to 6% in 1995. Wage benefits from primary school have fallen but returns remain unchanged because of correspondingly falls in costs. Returns to tertiary education have not fallen. The concept of expected returns to education is introduced to allow for effects of education on earnings from self-employment and on the probability of employment. These mirror conventionally calculated returns for men, but are higher for women due to large participation effects of education.Education, rates of return, Kenya

Health Expenditures and Health Outcomes in Kenya

Health inputs are critical in attaining a healthy nation and improving health outcomes. Kenya, like other developing countries, grapples with limited health expenditures and poor population health indicators. Specifically, Kenya is yet to achieve the allocation of least 15% of the government’s annual budget to improve the health sector as enshrined in the Abuja Declaration. Though there is an improvement with regards to infant mortality rate decreasing from 96.6 per 1, 000 live birth in 1970 to 30.6 per 1, 000 live birth in 2018. This indicator of population health outcome is currently far below the Sustainable Development Goals (SDGs) target of reducing the under five mortality rate to as low as 12 deaths per 1,000 live births by 2030. The literature suggests that increase in government’s budgetary allocation to the health sector can improve country’s health outcomes. Evidence on the impact of health expenditures on health outcomes is mixed and limited in developing countries. This study aims to analyze the impact of public health expenditures on health outcomes, among other control variables in Kenya. The study uses time series data from 1970 to 2018. The variables are found to be integrated of different orders suggesting the choice of Autoregressive Distributed Lag (ARDL) model. ARDL provides a useful link between long run equilibrium relationships and short run disequilibrium dynamics is estimated. The ARDL bounds test suggests presence of cointegration thus leading to the estimation of Error Correction Model (ECM). The findings suggest that improvements in public health expenditures enhance health outcomes in Kenya. The control variablesthat are found to be important determinants of infant mortality rate in Kenya include the national income and number of hospital beds per 100, 000. The study recommends that Kenyan government should increase annual budgetary allocation to health sector. Such increase is likely to lead to investments in physical and human capital in the health sector thus translating to improved health outcomes in Kenya