Corruption and Economic Growth in Kenya: A County-level Analysis

Abstract

While there's an outsized consensus within the empirical literature on the negative impact of corruption on the economic process, some studies still argue that corruption could also be economically justified. There is, however, little empirical evidence to validate the impact of corruption on economic growth within the devolved units. The effect of the corruption rate on economic activities is examined using ordinary least squares regression analysis and Kenya county-level data. The results of this study revealed that there exists a negative independent relationship between corruption and county per-capita income growth. Arising from the study findings, this study submits that the county authorities and policymakers must put in situ policies that may eradicate the grounds for bribe-taking in counties to stimulate economic growth.

Keywords: corruption, economic growth, fiscal decentralization, devolution, macroeconomic

DOI: 10.7176/JESD/12-18-02

Publication date:September 30^th 2021