Does Decentralization Promote Poverty Alleviation? Evidence from Kenya's Constituencies Development Fund

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Decentralization is thought to facilitate poverty reduction by giving power over resource distribution to officials with local knowledge about where resources are most needed. However, decentralization also implies less oversight and greater opportunities for local officials to divert resources for political or personal ends. We investigate this tradeoff by exploring the degree to which Kenya’s premier decentralized development program—the Constituency Development Fund—targets the poor. Using a detailed spatial dataset of 32,000 CDF projects and data on the local distribution of poverty within Kenyan constituencies, we find that most MPs do not target the poor in their distribution of CDF projects. In places where they do, this tends to be in constituencies that are more rural, not too large, and, in keeping with the findings in Harris and Posner (2019), where the poor and non-poor are spatially segregated from one another. These factors all point to the feasibility of poverty-based targeting, rather than, as most of the literature emphasizes, political actors’ motivation to pursue such a strategy. In addition to these substantive findings, we also make a methodological contribution by underscoring how aggregation to the administrative unit may truncate important variation within geographic areas, and how a point-level analysis may avoid these pitfalls.
Discussant: Ester Cross (Oxford)