Evolution and Measurement of Institutions in Kenya

Abstract

This article presents the de jure political and economic institutional indicators for Kenya for the period 1884–2010, and discusses their evolution over time. The construction of these indicators is based on the leximetric framework proposed by Fedderke et al. (2001), which relies on the formal legislative history that governs immovable property, political rights, and civil liberties. In doing so, we are able to capture the notion of permanency that characterizes institutions according to Douglass North. We provide a narrative that demonstrates how existing political and economic rights in Kenya were largely shaped by the legal framework introduced by the British settlers since 1884. These laws were initially designed to create a settler economy in order to recoup the heavy investments cost of the Uganda railway. To this end, the colonial authorities promoted a liberal freehold property rights system for the benefit of the settlers while curtailing the indigenous populations’ basic civil liberties and customary rights to land. We correlate these newly constructed indexes with conventional institutional indicators for overlapping periods. Overall, we find high unconditional correlations, which suggests that our indicators may be fairly reliable even in the long run (126 years).

Does illicit financial flows crowd‐out domestic investment? Evidence from Sub‐Saharan Africa economic regions

“…However, the effect is only statistically significant in the EAC, ECOWAS and SADC regions but otherwise in the CEMAC region. This finding corroborates the result of Letete and Sarr (2017), who showed that IFF has a catastrophic effect on development imperatives and investment in Kenya, one of the member states of EAC. In another study on an EAC member state, Miyandazi (2019) showed that IFF crowds out investment in Tanzania.…”

“…Therefore, the coefficient of broad money supply is expected to be positive to depict its positive relationship with investment. Previous studies have also shown that institutional quality is crucial for stimulating investment (Abotsi, 2018;Letete & Sarr, 2017), hence, its inclusion in the model. In line with , the principal component analysis (PCA) was used to compute the institutional quality index using the six institutional indicators (bureaucratic quality, control of corruption, democratic accountability, government stability, regulatory quality and rule of law).…”

“…Findings revealed that IFF has undermined the development of the Nigerian economy as the development funds needed to build infrastructural facilities that would attract foreign investors, which will in turn ameliorate the economic conditions in the country, are carted away through various IFF channels. Letete and Sarr (2017) explored the political economy perspective to explain illicit financial outflows in Kenya. The study showed that the weakness of the Kenyan political institutions promotes IFFs thus, underscoring the role of institutions in curbing IFFs in Kenya.…”

“…Countries with high real GDP, high taxation rates and high inflation rates are often prone to experiencing high illicit capital outflows due to the rent-seeking behaviour of various economic agents, who seek to provide safe havens and favourable fiscal environments for their funds (Signé et al, 2020). In addition, empirical evidence shows the IFFs are cyclically related to weak institutional frameworks and insecurity, which permits corrupt and rentseeking individuals to illegally move financial resources abroad (Ayodele & Bamidele, 2017;Combes et al, 2019;Letete & Sarr, 2017). Other studies alluded that IFFs in SSA in more prevalent in resource-rich economies such as Tanzania, Nigeria, South Africa and Algeria, among others (Miyandazi, 2019).…”

The archival colour line: race, records and post-colonial custody

“…56 Between 1897 and 1920, the British government enacted a series of regulations that created a legal framework for an English freehold tenure system in order to 'protect the settlers' land rights after expropriating land from the natives. 57 This resulted in the racial spatialization of territory into the White Highlands, which consisted of the fertile and temperate lands of central Kenya, and native reserves, which were the designated lands the British allocated to African peoples on the basis of a colonial interpretation of ethnicity. The racialization of identity and the racial subordination of peoples across the territory provided the ideological basis for expropriation.…”