Browsing by Subject "economics"

Now showing 1 - 20 of 54
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    A small push goes a long way: An evaluation of the cumulative effects of a cash transfer on South African youth
    (2021) Jani, Tafadzwa; Eyal, Katherine
    Persistently high poverty rates in developing countries have negatively affected social welfare outcomes, including infant mortality, food security, life expectancy, and educational attainment. In the late 2010s, depressed household incomes endured in many developing countries in the Americas, Africa and Asia. Cash transfer programs were introduced in many low-income countries in the 1990s, often intended to reduce poverty and increase human capital. South Africa launched the child support grant (CSG) in 1998, an unconditional cash transfer for children below the age of seven. By 2017, the program boasted twelve million beneficiaries, with an upper age limit of eighteen. Globally, initial evaluations of cash transfers (including the CSG) focused on children, and the short-term impacts on education, health, and consumption. However, fewer evaluations of the impact of extended receipt have taken place, particularly using older beneficiaries who experience lifelong receipt. This thesis analyses the long-term effect of CSG receipt on youth outcomes. Observing a positive CSG effect on South African youth would be encouraging, given that 3.3 million youth were not involved in any employment, education, or training in 2018. The literature focussing on older youth outcomes and long-term receipt primarily examines educational outcomes, mainly evaluating cash transfer programs in North America. This thesis draws on the National Income Dynamics Survey, a nationally representative longitudinal study conducted in South Africa between 2008 and 2017. Both the irregular expansion pattern of the CSG, and the panel nature of the survey are utilised to estimate grant impact on two cumulative outcomes (educational achievement and physical health, measured by height), and two current outcomes (labour force participation and mental health), using a youth sample aged between fifteen and twenty-seven. Those experiencing a higher duration of CSG receipt display higher educational achievement, higher average height and lower labour force participation. However, no significant effects are found on mental health. These results suggest extended receipt of an unconditional transfer may positively impact human capital accumulation, while current outcomes are less likely to be affected (World Bank 2016).
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    Alternative contracting for informal economy financing
    (1992) Liles, Scott Day; Hartzenberg, Trudy
    The informal economy in South Africa is a source of considerable debate. Academics and practitioners struggle to define, characterize, measure and place the informal economy in South Africa's macroeconomic picture. Despite the polemic, it is generally agreed that the informal economy is important. Every collection of ideas regarding the South African economy includes some thoughts on the informal economy. The compelling point is that these thoughts are generated in a wide variety of disciplines. The informal economy features in collections addressing economics, politics, history, urban planning and even literature. Christian Rogerson and Eleanor Preston-Whyte' s recent collection, "South Africa's Informal Economy", is testament to the broad application of the informal economy. Beyond the debate of definitions and characteristics is the debate on how to assist the informal economy. Leiman suggests that one of the major constraints on the informal economy is "blocked access”. Blocked access refers to limited access to product and factor markets. In the case of the informal economy this reference means limited access to raw materials, skills and capital. In South Africa the limited resources directed to informal economy activity can be largely attributed to past government policies that were hostile to the informal economy's existence and development. As such, the role of informal economy development was left to non-governmental and welfare organizations.
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    An investigation of employment outcomes in South African manufacturing
    (2020) Mercer, Sean; Black, Anthony
    The aim of this research paper is to investigate the employment outcomes in South African manufacturing between 1972 and 2016. The research employs a combination of qualitative and quantitative analysis in demonstrating how South Africa's manufacturing sector has become increasingly capital-intensive, with aggregate manufacturing employment falling by approximately 600 thousand jobs between 1982 – 2016. The investigation highlights the influence of industrial policy decisions in this outcome, creating a bias towards investment in capital-intensive manufacturing industries. This trend has continued post-1994, despite government's repeated commitment to job creation and strategic policy support for more labour-intensive industries. A further investigation of the manufacturing sector at a sub-industry level indicates that while capital-intensity has increased in capital and labour-intensive industries alike, the increase in aggregate manufacturing capital-intensity is due primarily to capital-intensive industries expanding their share of aggregate capital stock and output relative to labour-intensive industries. Consequently, South Africa's revealed comparative advantage lies, somewhat paradoxically, in capital-intensive production, contrasting the manufacturing sectors in similar comparator countries. To ensure a rigorous investigation of the aforementioned outcomes, the paper examines the common notion that South African real wages are too high to be competitive in labour-intensive production. The findings indicate that poor labour productivity is an equally important contributor to uncompetitive unit labour costs relative to competitor countries. As a means of addressing these challenges, utilizing a practical example, the paper proposes the use of special economic zones to create an environment from which labour-intensive production can thrive. It highlights the potential of targeted industrial policies, in a controlled environment to reduce the cost of labour whilst simultaneously improving productivity over time. Utilizing various instruments, for example wage subsidies, the example illustrates how such an approach is a cost-effective way of encouraging investment in labour-intensive industries, simultaneously offering a solution to more meaningful employment creation in South African manufacturing.
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    Analysing the role of language in the context of education, employment and income in South Africa
    (2020) Kahn,Amy; Leibbrandt, Murray; Branson, Nicola
    Although most of the South African population speak an African language as their home language, English remains the lingua franca and continues to dominate economic and political life. This thesis explores the role of language in the context of the labour market, the schooling system and survey data collection primarily using data from the National Income Dynamics Study (NIDS) survey. Firstly, I assess the impact of English proficiency among African home language speakers on employment probabilities and wages. After accounting for endogeneity and measurement error in the employment and wage models, I estimate that being proficient in English is associated with a 23-25 percentage point increase in the probability of employment, and a wage premium of 33 percent. These results contribute to the limited research on this topic in South Africa. Secondly, I explore the extent to which English and Afrikaans dominate as the Languages of Learning and Teaching (LoL T's) in the foundation phase of schools where a share of the learners speak an African language as their home language. Despite overwhelming evidence that mother-tongue instruction in the early years of schooling is superior pedagogically, parental preferences towards it remain low and I find that most schools in urban areas still choose to teach in English or Afrikaans. Mother-tongue instruction tends to occur in rural areas, or poorer urban communities, and where learners within a school come from relatively similar language backgrounds. Thus, when devising implementation plans to assist schools in adopting mother-tongue instruction, there may be a need for different strategies across different areas and schools. Finally, l investigate the role of language in determining the quality of the data that are used to investigate the phenomena in the first two sections. Through a multilevel analysis of the NIDS survey data, I find that when the interviewer and respondent are from the same language group, the respondent is more likely to participate in the survey. This is an important methodological finding as it implies that matching interviewers and respondents according to language may have a positive impact on survey response and hence the representativity of the data.
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    Assessing education as a determinant of trust in South Africa
    (2024) Sigauke, Simphiwe Ntombizodwa; Njozela, Lindokuhle
    It has been argued that one of the key benefits of raising the levels of education in a nation is the enhancement of trust. Trust has been found to be a critical driver of economic development and growth and is thus of particular value to South Africa. There has been rising literature, however, showing the ineffectiveness of education as a policy tool to increase trust levels. At times the impact of education has even been found to impair trust within a society. This present study sought to expand the research interrogating education as a determinant of interpersonal trust in South Africa by assessing the impact of education on various forms of trust. In this thesis, education as a determinant of trust in South Africa was assessed using the National Income Dynamics Wave 5 Cross-Sectional data set. As a primary focus, an analysis was undertaken to assess the relationship between education and trust by applying probit regression analysis in which the years of basic education obtained together with control variables was regressed against five variables of trust. In a secondary analysis, the household spillover effects of education on trust were also assessed. The results of the study suggest that an additional year of basic education increases the likelihood of trusting in respect of only two forms of trust: trust of people that an individual knows and trust of one's own race group. Basic education was found to be an insignificant determinant of the other three forms of trust. The result for trust of one's own race group was further confirmed in the spillovers analysis. Here, the results suggested that education household spillovers that impact trust are present between the household head and the other members of the household. The spillover effects of education here were found to enhance in-group trust in terms of one's own race group on the one hand and to reduce out-group trust in terms of other race groups on the other hand. Notably, however, the impact of basic education on trust observed in both the primary and secondary analysis was quite minimal. Evidence from this study therefore supports the sentiment expressed in the literature that the positive outcomes of education on trust are most certainly not universal. Rather, the nature of this relationship is variable as a consequence of a number of contextual dynamics within the society in question.
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    Assessing the Impact of Minimum Wage on South Africa's Earnings distribution
    (2018) Brey, Yaseen
    The topic of minimum wage has been of interest for a long time and particularly its potential in addressing wage inequality and ultimately improve the livelihoods of the most marginalized. South Africa has high prevalence of inequality and poverty and the minimum wage is touted as a potential mechanism to improve the lives of individuals at the bottom end of the wage distribution. The mainstay of analysis for minimum wage is the impact on employment. To this end, the paper will flesh out the history of minimum wages and contextualize them through their role in improving welfare. In February 2017, the National Economic Development and Labour Council, constituted out of representatives from business, labour and government, signed the national minimum wage agreement. This agreement outlines the basis for instituting a new national minimum wage no later than 1 May 2018. The proposed new minimum wage of R20 per hour is aimed to “improve the lives of the lowest paid workers and begin to address the challenge of wage inequality” (NEDLAC, 2017). Although many sectors are already at this level, significant increases in the private security and domestic workers sector will require a large increase to come up to parity. In terms of the political economy, the African National Congress (ANC) is undergoing significant grappling for power of South Africa’s ruling party. Although it cannot be seen as more than conjecture, it is nevertheless worthwhile to view the national minimum wage as more than just labour reform, but also a bargaining chip for political gain in the 2019 national elections.
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    Branded band-aids on broken legs: a relational critique of the randomised controlled trial's approach to poverty
    (2024) Coetzee, Marguerite; Smith, Michael
    The rise of experimental evaluations, specifically the use of the randomised controlled trial (RCT) in the field of development economics, has been widely critiqued. These critiques range from technicalities, such as the internal and external validity of the methodology, to the approach to economic development it takes. This dissertation contributes to the latter, and offers a critique of the underlying theoretical framework embraced by the RCT. The dissertation deploys a New Relational approach to poverty which foregrounds an analysis of the social relations within which the poor are immersed. The New Relational framework examines how class, caste, and gender, as well as the intersection of these social identities, shape the creation and reproduction of poverty. In this sense, the New Relational approach draws from the insights of Marxist, feminist, and postcolonial theory to present an anti-essentialist approach to poverty. By critically examining two RCT-implemented poverty programmes in Bangladesh, this study shows that the RCT approach to poverty relies on a modified neoclassical theoretical framework that neglects studying the determinants of poverty related to power, discrimination and exploitation. This dissertation argues that by ignoring these variables the RCT approach provides an insufficient understanding of poverty, as the latter play a crucial part in shaping the preferences of, and opportunities available to the poor.
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    British American tobacco PLC: an analysis of the group's pricing strategy across its key markets
    (2022) Mathebula, Peter-Wallace; Van Walbeek, Cornelis
    Tobacco products are subject to substantial excise and sales taxes. In most countries these increase over time, but the rate of increase varies between countries and across different types of tobacco products. The tobacco industry is opposed to increases in tobacco taxes, changes in relative tax rates for different tobacco products, and adjustments to excise structures because these adversely affect their profits. However, the tobacco industry can mitigate these shocks by means of its pricing strategies. This paper investigates how the British American Tobacco Group has reacted to excise tax increases and declining industry volumes in order to maintain profitability in its 31 key markets (i.e. key countries) over the period 2006 to 2019. The Group's most common response to the excise tax increases was to overshift the excise increases. This meant that the retail price was increased by more than the increase in the excise tax. In a scenario of decreasing sales volumes and shifting consumer preferences, it is the relatively price-inelastic demand for the Group's products and its substantial market power which often make this strategy possible and successful. However, even though this strategy is most common, the trading environment differs in each market, which meant that the Group had to sometimes apply different strategies. These strategies include undershifting the tax (especially for cheaper brands), oversupplying the market in anticipation of excise increases, timed price changes, and adjusting product attributes in response to regulatory changes. Furthermore, as traditional combustibles are coming under increased pressure, the Group is developing new product categories.
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    China in Africa
    (2013) Anthony, Ross
    This two-lecture course will consider the political rationale behind Sino-African relations and some of the actors and institutions which drive the political agenda, and will also explore aspects of the economic dimension.Since the late 1990s, driven by China’s ‘go out’ policy, Sino-African trade has experienced unprecedented growth. For anyone interested in learning more about China's role in Africa's economy and politics.
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    Corporate taxation and investment in South Africa
    (2021) Maboshe, Mashekwa; Woolard, Ingrid D
    This thesis investigates some aspects of corporate taxation and firm-level investment in South Africa. The thesis uses specially constructed and unique datasets to draw insights on the link between corporate tax changes and firm-level investment and as well as the efficiency of capital allocation in South Africa. The thesis comprises a short introductory chapter, three empirical chapters, and a summary chapter. The first empirical chapter (chapter 2) evaluates the responsiveness of firm-level investment to corporate tax changes over a period of notable corporate tax reforms in South Africa. The study estimates a reduced form neoclassical investment model using a particularly constructed dataset of firms listed on the Johannesburg stock exchange over the period 1999-2012. Generalised methods of moments (GMM) techniques are used to control for various econometric biases. The findings suggest that although the corporate tax reforms reduced the marginal cost of investment, these reductions did not result in a statistically significant increase in firm-level investment. The null effects found in this study are robust to various estimation specifications. Although at variance with the established literature from developed countries, the findings are similar to emerging evidence in other developing country contexts and suggest that other factors may be more important determinants of investment than corporate tax policy. Chapter 3 explores the possibility that the unresponsiveness of firm-level investment to corporate tax policy may be a result of the presence of financial constraints. According to the financial constraints hypothesis, neoclassical fundamentals may fail to explain investment in the presence of financial constraints. The paper investigates the role of financial constraints in investment using dynamic GMM and endogenous switching regressions methods. The paper finds that financial constraints are an important factor in investment determination. Firms that are more financially constrained rely more on the availability of internal resources to fund investment relative to the less financially constrained firms. The findings suggest that investment policy should consider strategies that reduce informational asymmetries and other capital market inefficiencies. Such strategies would help lower the barriers and costs of external finance, thus improving firm-level investment. Chapter 4 considers the implications of differential taxation of assets and industries in South Africa. The paper's motivation is that although there are variations in the tax treatment of investments in assets and across industries, little empirical evidence exists on the nature of any investment distortions due to differential tax policies. Using a rare and unexplored industrylevel data source from Statistics South Africa, the study constructs a panel of asset shares by industry over the period 2007-2014 and estimates inter-asset tax elasticities to estimate the potential investment distortion or misallocation effects of differential taxation policies. The findings suggest the presence of non-negligible inter-asset distortions due to non-uniform taxation of investments. Investments in a given asset are found to respond to the tax incentives provided for other asset classes. Our findings suggest that current corporate tax policies that offer differentiated and asset or industry-specific investment incentives may be causing distortions and inefficiencies in the allocation of assets among industries.
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    Corporate taxation and investment in South Africa
    (2021) Maboshe, Mashekwa; Woolard, Ingrid
    This thesis investigates some aspects of corporate taxation and firm-level investment in South Africa. The thesis uses specially constructed and unique datasets to draw insights on the link between corporate tax changes and firm-level investment and as well as the efficiency of capital allocation in South Africa. The thesis comprises a short introductory chapter, three empirical chapters, and a summary chapter. The first empirical chapter (chapter 2) evaluates the responsiveness of firm-level investment to corporate tax changes over a period of notable corporate tax reforms in South Africa. The study estimates a reduced form neoclassical investment model using a particularly constructed dataset of firms listed on the Johannesburg stock exchange over the period 1999-2012. Generalised methods of moments (GMM) techniques are used to control for various econometric biases. The findings suggest that although the corporate tax reforms reduced the marginal cost of investment, these reductions did not result in a statistically significant increase in firm-level investment. The null effects found in this study are robust to various estimation specifications. Although at variance with the established literature from developed countries, the findings are similar to emerging evidence in other developing country contexts and suggest that other factors may be more important determinants of investment than corporate tax policy. Chapter 3 explores the possibility that the unresponsiveness of firm-level investment to corporate tax policy may be a result of the presence of financial constraints. According to the financial constraints hypothesis, neoclassical fundamentals may fail to explain investment in the presence of financial constraints. The paper investigates the role of financial constraints in investment using dynamic GMM and endogenous switching regressions methods. The paper finds that financial constraints are an important factor in investment determination. Firms that are more financially constrained rely more on the availability of internal resources to fund investment relative to the less financially constrained firms. The findings suggest that investment policy should consider strategies that reduce informational asymmetries and other capital market inefficiencies. Such strategies would help lower the barriers and costs of external finance, thus improving firm-level investment. Chapter 4 considers the implications of differential taxation of assets and industries in South Africa. The paper's motivation is that although there are variations in the tax treatment of investments in assets and across industries, little empirical evidence exists on the nature of any investment distortions due to differential tax policies. Using a rare and unexplored industry level data source from Statistics South Africa, the study constructs a panel of asset shares by industry over the period 2007-2014 and estimates inter-asset tax elasticities to estimate the potential investment distortion or misallocation effects of differential taxation policies. The findings suggest the presence of non-negligible inter-asset distortions due to non-uniform taxation of investments. Investments in a given asset are found to respond to the tax incentives provided for other asset classes. Our findings suggest that current corporate tax policies that offer differentiated and asset or industry-specific investment incentives may be causing distortions and inefficiencies in the allocation of assets among industries.
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    Cost utility and budget impact analysis of bortezomib and lenalidomide for the treatment of relapsed/refractory multiple myeloma in the South African public health sector
    (2021) Matsela, Lineo Marie; Cleary, Susan; Wilkinson, Thomas
    Multiple myeloma (MM) is the second most common haematologic cancer, accounting for approximately 13% of all blood cancer cases worldwide. The global incidence rate increased by 126% from 1990 to 2016. In South Africa, multiple myeloma accounts for approximately 9% of haematological cancers and less than 1% of all cancers. Nevertheless, some studies have reported that the incidence is likely underestimated due to an underdiagnosis of the cancer. Thus, the disease could possibly be an issue of greater concern in South Africa than current statistics indicate. The nature of the MM tumour makes patients prone to resistance of chemotherapy and multiple relapses leading to the development of relapse/refractory multiple myeloma (RRMM). During the relapse/refractory period, the patient is nonresponsive to treatment and/or experiences progressive disease When a patient experiences relapse/refractory MM, their prior, (first line) treatment is readministered if it was clinically efficacious and well-tolerated. Contrarily, a change in regimen is recommended if “an insufficient response, a rapid relapse and poor tolerance” to the first-line treatment is experienced by a patient. Second-line regimens that are recommended due to their proven high clinical efficacy are lenalidomide plus low-dose dexamethasone (LEN/DEX) and bortezomib monotherapy (BORT). The clinical effectiveness of both regimens for second-line treatment of RRMM was reported in the MM009/010 and the APEX studies, respectively, where each regimen was compared against dexamethasone monotherapy. Given this proven clinical effectiveness for RRMM, lenalidomide is under consideration for inclusion in the South African Essential Medicines list. Three treatment strategies for second line RRMM treatment were modelled from a provider's perspective. These strategies were dexamethasone (standard of care), BORT and LEN/DEX. For each strategy we modelled a hypothetical cohort of relapsed/refractory multiple myeloma patients using a three-state Markov model (pre-progression, progression and dead) over a 15-year time horizon. Efficacy data was obtained from the MM009/010 and APEX trials, while utilisation rates were obtained from a European study. Other input data was sourced from local literature. Outcomes were reported in quality adjusted life years (QALYs). Incremental cost effectiveness ratios (ICERs) were calculated for BORT and LEN/DEX and compared to the local cost-effectiveness threshold to determine if the drugs are good value for money for the South African government. The total costs per patient using DEX, BORT and LEN/DEX over 15 years differed significantly resulting in estimates of R8 312.32, R234 995.50 and R1 135 323.37, respectively. The associated health benefits in terms of quality-adjusted life years gained from the treatments were 1.14, 1.49 and 2.29. Hence, for every quality adjusted life year gained from BORT relative to DEX, an additional R654 648.52 would need to be spent. In contrast, when BORT is compared to LEN/DEX, an additional R1 225 542.23 would need to be spent for an additional quality adjusted life year gained from LEN/DEX. Both the BORT and LEN/DEX treatments were not cost-effective relative to the costeffectiveness threshold of R38 500 per DALY gained. Due to the high costs, both BORT and LEN/DEX could potentially have significant economic impacts on the South African public health sector budget. The study suggests that one year of treatment for 337 RRMM patients in South Africa using the BORT and LEN/DEX would increase the budget budget-cost of RRMM treatment by 3136% and 8684%, respectively. Both BORT and LEN/DEX treatments would not be cost-effective strategies for second-line treatment of RRMM in South Africa. The results indicate that the drug prices of lenalidomide and bortezomib hinder the cost-effectiveness of BORT and LEN/DEX. Price reductions could potentially make BORT more cost-effective and allow it to be considered as an option for second-line treatment for RRMM patients.
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    Decomposing trust into risk preferences, altruism, and subjective beliefs: An experimental analysis
    (2019) Beattie, Tarryn; Hofmeyr, Andre
    There is a sizeable economic literature dedicated to understanding trust and the extent to which it influences decision making. Although trust is difficult to measure, experimental economics has commonly used the 'amount sent’ in the Berg, Dickhaut and McCabe (1995) investment game to elicit levels of trust from players of the game. However, there is a growing body of literature suggesting that factors such as risk preferences, altruism, and subjective beliefs may confound this measure of trust, thereby questioning the validity of using the 'amount sent’ to elicit people’s levels of trust. To understand these factors, we designed and conducted an incentive-compatible economic experiment with students from the University of Cape Town. These participants completed the investment game, the dictator game (to measure levels of altruism), and a random lottery pair risk preferences task (to gauge risk preferences). We also included an information treatment where students were shown the conditional distributions of amount sent decisions made by students in the previous, baseline treatment. This was done to evaluate whether knowledge of the actions taken by other students would ground students’ beliefs and influence the decisions they made. We estimate a set of standard statistical models to gauge determinants of the amount sent and a complementary maximum likelihood estimation approach to estimate Expected Utility models and Rank-Dependent Utility models in order to further evaluate our data. Our results show that caution needs to be taken when using the amount sent as a measure of trust as the relationship between risk preferences and the amount sent is a nuanced one. Moreover, altruism has a statistically significant association with the amount sent and with risk preferences. We also found that those who were part of the information treatment sent significantly more than those who were not, and they were on average also less risk averse. This indicates that while subjective beliefs do influence behaviour in the investment game, they also affect risk preferences. Thus, our results suggest that researchers should not use the amount sent in the investment game as a pure measure of trust because its measurement is confounded empirically by altruism and subjective beliefs, and theoretically by risk preferences.
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    A developmental state': the challenge ahead
    (2011) Various speakers
    Lecture series co-ordinated by Alec Erwin, Honorary Professor of Economics, University of the Western Cape Considerable economic and other challenges face contemporary states around the world.This is even more the case for Africa, where the developmental issues are massive. This course will examine the implications of a commitment to a ‘developmental state’ for South Africa and Africa, and assess key contemporary challenges. This podcast series can be enjoyed by anyone interested in economics in African contexts. It is also a credible resource for students writing on this topic.
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    Does Africa need the IMF
    (2013) Ellyne, Mark
    This is a presentation on the role of the IMF in Africa and review the period of structural adjustment programs. Introduction to the IMF and World Bank and their role in Africa. Provides some introduction on sources of growth.
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    Econometric analysis of youth tobacco use: evidence from Lesotho global youth tobacco surveys
    (2021) Pokothoane, Retselisitsoe; Van Walbeek, Cornelis'
    This dissertation estimates the prevalence of youth smoking and investigates the determinants of different tobacco products by gender among the youth aged 11 – 17+ years in Lesotho. This is achieved by estimating three independent gender logit regressions using Lesotho Global Youth Tobacco Surveys of 2002 and 2008. The results indicate that most youth smokers in Lesotho are males. The smoking prevalence amongst males is higher than amongst females for all three tobacco products: cigarettes, other smoked tobacco, and smokeless tobacco. Overall, smokeless tobacco has the highest prevalence (16.87%), followed by other smoked tobacco products (13.94%), and, lastly, by cigarettes (12.24%). The results further reveal that the determinants of smoking vary with the tobacco product type and gender. Cigarette smoking has a strong positive association with peer influence and the availability of loose cigarette sticks at retail stores, irrespective of gender. Exposure to other people's smoking in public and newspaper advertisements increase males' cigarette use, while exposure to other people's smoking inside the home increases females' cigarette smoking. The use of smokeless tobacco is negatively associated with being in the age group, 13 and 14 years, for both males and females. Among females only, the use of smokeless tobacco is strongly positively associated with having a mother as the only household smoker and parental discussions about smoking. Peer smoking is the primary determinant of the use of other smoked tobacco among males, while, for females, the main determinants of other smoked tobacco use are exposure to other people's smoking at home and parental discussions about tobacco use. The study recommends that Lesotho ban tobacco media advertising and promotions, abolish the sale of loose cigarette sticks, strengthen teaching at school about the dangers of tobacco, and introduce tobacco education in the Science subject in the early primary grades.
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    Ethnic and political dynamics of poverty, employment, and wages in Kenya
    (2024) Magero, Joshua; Burns, Justine
    The association of ethno-political bias and economic development outcomes remains central to policy considerations in most African countries, especially in the sub-Saharan region. Perceptions and realities of ethnic and political favoritism in wellbeing have been a major cause of ethnic conflicts, erosion of civic participation, and the undermining of an inclusive national identity and other aspects of social cohesion in Kenya. In turn, this has more broadly affected her socio-political and economic stability adversely. Although it is widely accepted that observed economic wellbeing differentials can be attributed to a myriad of factors spanning geographical climate, economic factors, socio-cultural, and colonial historical impacts, it has been argued equally that the observed disparities in Kenya might have been shaped by the continued entrenchment of discriminatory policies by the successive post-independence regimes. The general perception is that political leaders, particularly those in the executive arm of the government, have tended to manipulate resource distribution in favor of their ethnic groups and/or counties, and this has been enabled by the spatial concentration of the ethnic groups across spatial units in a nonrandom manner. These claims of ethnic and political favoritism, however, largely only abound as anecdotes as prior work in this field remains inadequate. A few pieces of evidence contend that there exists a consistent systematic bias in favor of ethnic groups and Presidents' regions. This thesis corroborates this anecdotal evidence by means of empirical investigation. The thesis seeks to identify the underpinnings of the relationship between ethnopolitics and resource distribution in Kenya. We do this by mapping ethnically based resource allocation over time in Kenya, from the 1990s through to the present, in three interrelated but independent papers: (1) Characterize the trends and patterns of multidimensional poverty levels; (2) Examine the relationship between coethnicity with the President and poverty levels and establish whether governance reforms in the post-2010 period has reduced the ethnic bias in resource distribution, and (3) Investigate the role played by ethnicity and the political regime in power at the time of entry into the labour market on present-day employment and earnings. Essentially, the thesis seeks to identify empirically the political underpinnings of poverty levels and the labor market over time. We introduce the thesis in chapter one, proving the background and motivation for the thesis. In chapter two, we derive reasonably comparable datasets from interrelated independent large surveys; three rounds of 10% samples of the Kenya Population and Housing Censuses (1999, 2009 and 2019) and the Kenya Integrated Household Budget Surveys (KIHBS) 2016, and construct some of the key variables. This chapter pays special attention to the imputation of ethnic identity when explicit individual-level measures are absent. The ethnicity variable is not explicitly in some of the datasets. This discussion lays out the primary independent variable, ethnicity, in the later analyses. Chapter three discusses the elements and construction of the primary outcomes of interest – a multidimensional poverty measure. The chapter provides some descriptive and visual evidence of a positive correlation between Kikuyu ethnic identity and poverty measures as well as simple correlations between poverty measures and county-type. We construct the multidimensional poverty index (MPI) (from three domains: education, dwelling conditions, and access to key basic amenities-tap water, electricity, clean cooking fuel) and characterize its distributional patterns between 1999-2019. From the pseudo panel dataset of counties constructed, we can observe poverty experience over time and examine the extent to which poverty is sustained in specific regions. The following findings emerge from this chapter: poverty experience in Kenya is persistent rather than static, for most counties. We find a high degree of persistence of poverty status of counties: 82% of counties that were the least poor in 1999 have remained the least poor in 2019; 56% of those that were moderately poor in 1999 are still moderately poor in 2019, while 66% have remained trapped in poverty, being the poorest between 1999 and 2019. While counties in the Mount Kenya region have simultaneously exhibited the lowest poverty levels and best improvement in poverty reduction, counties in the Western have remained moderately poor or moved to the bottom of the poverty distribution. Notably, counties in Northern Kenya have remained “trapped” in poverty at the tail end of the distribution as the poorest over the 25-year period. Although poverty has declined gradually over time (the poverty rate dropped from 48.5% in 1999 to 42.5% in 2019), the cross-country disparities in poverty outcomes have persisted, exacerbating the inequality situation that already exists. Our results also reveal contemporaneous clustering of poor counties with specific ethnic groups. Counties that have the highest share of President's coethnics are the least poor and have the greatest reduction in poverty levels over time. Counties, where the Kikuyu tribe are the majority (Central Kenya and lower Eastern Kenya), have consistently simultaneously exhibited the lowest poverty levels and the most significant reduction in poverty over time. On the contrary, the inhabitants of Western Kenya (the Luo and the Luhya tribes) have remained moderately poor and the Northern Frontier Districts have stayed “trapped” in poverty (mostly the Kenyan Somali). The key contribution of this chapter is its consideration of the dynamic poverty phenomenon, as opposed to the transient nature where poverty is experienced only at a specific point in time. Chapter four attempts to deepen the institutional/governance mechanism discussed in chapter one, locating the source of these inequalities in politics using regression-based analysis. The main objective of this chapter is to investigate the drivers of poverty at the household level and county level, and the effect of a change of governance structure on the distribution of poverty across counties, and whether this transition has effectively redressed the ethnic-identity-based resource allocation problem that has bedeviled the country for a long time. We profile trends and patterns of material well-being in Kenya and decompose the county poverty gaps. We find suggestive evidence that coethnicity with the president matters for household poverty outcomes. Our estimation results show that the key drivers of household poverty are the ethnicity status of the household head, the level of education, engagement in gainful employment, location of the household, gender of the household head and the number of household members. The estimations reveal that being coethnic with the incumbent President is contemporaneously associated with a lower likelihood of being poor, and much more, staying coethnic major counties confers additional benefits to the coethnic households. More importantly, the result points to the fact that even though ethnic inequalities may exist at the individual level, they could be overridden by regional redistribution. The spatial dimension of poverty imbalances seems stronger than the ethnic dimension. A household is able to gain more welfare if they moved to other regions where presumably more resources are being channelled. The implication of this finding could be that removing barriers to movement of people, or rather, strengthening social cohesion amongst communities could help reduce the ethnic inequalities, thereby improving the overall welfare. Decomposition of the poverty gap reveals that the significant differences in poverty levels between coethnic majority counties and non-coethnic majority counties that cannot be solely attributed to differences in county characteristics which hints at potential “discrimination” or “favoritism” that benefits president's coethnics and regions where they are a majority. A significant portion of the poverty differences therefore remains unexplained. Further analyses suggest that despite the implementation of devolution, the importance of patronage networks continues to be witnessed, implying that character of ethnic patronage politics persists. We find no doubt that president's regions disproportionately benefit from public goods and services. The Kikuyu dominant counties more especially on average have substantially lower poverty levels, higher access to employment opportunities, better road networks, high school quality, adequate health infrastructure, proper water distribution and connection to electricity (resources which are largely publicly provided) although the reasons for such disproportionate allocations remain unclear. Although we are unable to estimate whether local politicians also influence the distribution of these resources, nor whether the outcomes would be different in politically contested areas, our evidence largely suggests that institutional reforms, through devolution in this case, has not effectively reduced practice of ethnic favoritism in the distribution of public goods. Instead, the patterns are more likely to be consistent with clientelist public investment behaviors motivated by national presidential election outcomes. The final empirical chapter of the thesis, chapter five, extends these bias-related concerns to a new arena – the general labor market – examining differences in labor market outcomes as a function of coethnicity before and after the new dispensation in 2010. We estimate the coethnic effects, and the regime of entry effects in the labour market outcomes-wages and employment; whether sharing the same ethnicity as the President today, or indeed, sharing ethnicity with the incumbent President when one was first eligible to enter the labor force, matters for contemporaneous employment and earnings. Due to the richness of data, most of the analyses in this chapter are primarily based on KIHBS 2015 data. However, evidence from the other datasets is also presented. We utilize the quasi-experimental technique; the regression discontinuity and probability score matching in these analyses. Our results reveal evidence of coethnic biases in different sectors and types of employment across both earnings and employment in the general labour market. Overall, we find that when Kalenjins are in power in 1999, they have higher chances of getting wage employment relative to non-Kalenjins. The same pattern is observed for the Kikuyu in 2009, and 2019, when they control the presidency. This finding suggests that coethnic biases continue to matter in the labour market, even in the post devolution, even though the magnitude has dampened. The coethnicity status at the regime of first entry into the labour market plays a significant role in today's employment and earnings. Sharing the same ethnicity with the ruling elite at the time one enters the labour market is associated with significantly higher employment probabilities today. While the coethnic effects especially for access to paid job seem manifest at the time of entry into the labour market, these effects dampen for the coethnics who have stayed longer in the job market. The recent coethnic cohorts seem to have higher employment probabilities than the earlier regime entrants. Hence, the biggest coethnic differentials are therefore pronounced at the time of entry but do not persist for long. This chapter also finds that the coethnic effects of employment are prevalent both in the private sector and the public sector. Different from earlier studies that do not find pronounced ethnic biases in employment in the Kenyan public sector, our findings reveal the existence of such biases across all regimes of entry. Our findings are consistent with the evidence from the administrative datasets derived from the audit of parastatals in Kenya, that find oversubscription of certain ethnic groups. We find results indicative of this evidence using the household survey dataset. Chapter Six of the thesis provides a summary of the thesis findings, policy implications and document areas for further research, highlighting the main findings and suggested policy implications and recommendations from the thesis. In conclusion this thesis has elucidated the pronounced tendencies of ethnic imbalances and their relationships with the political processes, to support policy formulation in redressing the longstanding challenges of poverty, equity, and inclusivity in Kenya. The findings from this thesis vitally contribute to the ongoing attempts to undo the legacy of ethnopolitical favoritism, not just in Kenya, but in sub-Saharan Africa more broadly, where these issues are widespread. We find that coethnicity with the President comes out as an important element in the conduct of social and political affairs in Kenya, with direct implications on poverty and the labour market. We also find persistence of poverty experience within counties. Most counties have remained in the same state over the study period. Particularly, counties dominated by the President's coethnics have remained relatively richer than other counties, besides having the greatest poverty reduction, while others have remained trapped in poverty. Our findings also reveal that transition to devolved system of governance from the central government structure has not significantly altered the resource distribution based on ethnopolitics, but the coethnic wage gap has reduced significantly in the post-2010 constitutional dispensation. Although it might be too early to comment on the effectiveness of devolution since Kenya is only at its initial stages, our evidence suggests that devolution has not reduced the ethnic favoritism in regional development. The persistence of ethnic favoritism in the post devolution era shows that the new constitutional dispensation and other legislations in pursuit of equitable access to resources and opportunities have not been effective in addressing the long-term challenges of county inequalities. Political exclusion and inequitable and unequal distribution of resources and opportunities have been longstanding issues in Kenya. This study, however, has been subject to limitations including data and the scope of coverage. A lot of potential further research in this area remain to be desired. With availability of data, over a long period of time, more accurate empirical investigations can be conducted to guide policy formulation on poverty reduction and narrowing the inequality. While we have attempted to control for all the possible empirical factors given our data-time trend, extent of urbanization, being Presidents coethnics, the proportion of the population with post-secondary schooling, and the proportion of the population with paid work, the empirical data may not convincingly rule out many other potential explanations. Some of these unobserved factors in our data may include better equipped bureaucracies, stronger representation in the national assembly, more effective county executives, among other factors, which we have not controlled for. Although we have convincingly provided evidence of persistence of ethnic imbalances beyond the governance reform period, future studies may consider adding additional empirical material that could support the assertions in this thesis. To exhaustively attribute the differences to political favoritism would require additional analysis using granular data with information on the conduct of bureaucrats-economic planners, resource allocation and electoral outcomes for instance. Another potential area of consideration could be whether political and ethnic favoritism in resource distribution play out differently in politically contested areas from the areas regarded as strongholds. Due to data limitation, we have estimated only the overall extent of favoritism, but not investigated the potential sources of these biases. However, assessing accountability channels by comparing different contexts (resources or index of resources in general) can confound other differences, posing an empirical challenge-especially when these projects are implemented in different phases. There is need to go beyond the canonical existence of political favoritism, and investigate further, the mechanisms through which the favoritism is implemented. Moreover, our study has only relied on the on- and off-election cycles (between political regimes). It might be useful to evaluate political favoritism using data that allows us to study how public goods provision tracks political developments at a high frequency. Investments in public projects for instance may accelerate in the weeks immediately before voting, and slow down significantly in the post-election period. Rather than assuming that coethnics continue to benefit from public goods provision throughout the Presidency of the incumbent leaders, mapping out the temporal process of ethnic and political favoritism gives more granular information which does not conceal within-period biases. This would contribute to understanding the timing of fiscal spending around the election cycle. Finally, one of the key limitations in this thesis is data limitation, especially with regards the ethnicity variable, which we inferred by from proxies. This might have an impact on the robustness of our result. Key policy implications arise from this thesis. First, there is need for significant tracking and scrutiny of government spending behaviour to curb the persistent ethnic and political biases. There is need for increased media coverage of distribution of public investments. This has an effect of increased accountability. Evidence shows that public investments which were hard to track and hidden from the public eye, especially within the implementation phases—exhibit significant favoritism, while stages which are disclosed publicly and receive widespread media coverage. Therefore, increasingly active independent media scrutiny as well as increasingly robust democratic institutions, expanding constraints on executive power, and donor oversight may partly curb favoritism. Rigorous democratic institutions and a free and transparent press can empower citizens to hold their elected officials accountable. International donor agencies should increasingly place strict conditions on the use of their funds to restrain corruption as strict donor conditionality on donor-funded projects. Evidence shows that oversight by international aid donors may help restrain favoritism in stages when the project is under the donor's scrutiny.
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    Open Access
    Ethnic and political dynamics of poverty, employment, and wages in Kenya
    (2024) Magero, Joshua; Burns, Justine
    The association of ethno-political bias and economic development outcomes remains central to policy considerations in most African countries, especially in the sub-Saharan region. Perceptions and realities of ethnic and political favoritism in wellbeing have been a major cause of ethnic conflicts, erosion of civic participation, and the undermining of an inclusive national identity and other aspects of social cohesion in Kenya. In turn, this has more broadly affected her socio-political and economic stability adversely. Although it is widely accepted that observed economic wellbeing differentials can be attributed to a myriad of factors spanning geographical climate, economic factors, socio-cultural, and colonial historical impacts, it has been argued equally that the observed disparities in Kenya might have been shaped by the continued entrenchment of discriminatory policies by the successive post-independence regimes. The general perception is that political leaders, particularly those in the executive arm of the government, have tended to manipulate resource distribution in favor of their ethnic groups and/or counties, and this has been enabled by the spatial concentration of the ethnic groups across spatial units in a nonrandom manner. These claims of ethnic and political favoritism, however, largely only abound as anecdotes as prior work in this field remains inadequate. A few pieces of evidence contend that there exists a consistent systematic bias in favor of ethnic groups and Presidents' regions. This thesis corroborates this anecdotal evidence by means of empirical investigation. The thesis seeks to identify the underpinnings of the relationship between ethnopolitics and resource distribution in Kenya. We do this by mapping ethnically based resource allocation over time in Kenya, from the 1990s through to the present, in three interrelated but independent papers: (1) Characterize the trends and patterns of multidimensional poverty levels; (2) Examine the relationship between coethnicity with the President and poverty levels and establish whether governance reforms in the post-2010 period has reduced the ethnic bias in resource distribution, and (3) Investigate the role played by ethnicity and the political regime in power at the time of entry into the labour market on present-day employment and earnings. Essentially, the thesis seeks to identify empirically the political underpinnings of poverty levels and the labor market over time. We introduce the thesis in chapter one, proving the background and motivation for the thesis. In chapter two, we derive reasonably comparable datasets from interrelated independent large surveys; three rounds of 10% samples of the Kenya Population and Housing Censuses (1999, 2009 and 2019) and the Kenya Integrated Household Budget Surveys (KIHBS) 2016, and construct some of the key variables. This chapter pays special attention to the imputation of ethnic identity when explicit individual-level measures are absent. The ethnicity variable is not explicitly in some of the datasets. This discussion lays out the primary independent variable, ethnicity, in the later analyses. Chapter three discusses the elements and construction of the primary outcomes of interest – a multidimensional poverty measure. The chapter provides some descriptive and visual evidence of a positive correlation between Kikuyu ethnic identity and poverty measures as well as simple correlations between poverty measures and county-type. We construct the multidimensional poverty index (MPI) (from three domains: education, dwelling conditions, and access to key basic amenities-tap water, electricity, clean cooking fuel) and characterize its distributional patterns between 1999-2019. From the pseudo panel dataset of counties constructed, we can observe poverty experience over time and examine the extent to which poverty is sustained in specific regions. The following findings emerge from this chapter: poverty experience in Kenya is persistent rather than static, for most counties. We find a high degree of persistence of poverty status of counties: 82% of counties that were the least poor in 1999 have remained the least poor in 2019; 56% of those that were moderately poor in 1999 are still moderately poor in 2019, while 66% have remained trapped in poverty, being the poorest between 1999 and 2019. While counties in the Mount Kenya region have simultaneously exhibited the lowest poverty levels and best improvement in poverty reduction, counties in the Western have remained moderately poor or moved to the bottom of the poverty distribution. Notably, counties in Northern Kenya have remained “trapped” in poverty at the tail end of the distribution as the poorest over the 25-year period. Although poverty has declined gradually over time (the poverty rate dropped from 48.5% in 1999 to 42.5% in 2019), the cross-country disparities in poverty outcomes have persisted, exacerbating the inequality situation that already exists. Our results also reveal contemporaneous clustering of poor counties with specific ethnic groups. Counties that have the highest share of President's coethnics are the least poor and have the greatest reduction in poverty levels over time. Counties, where the Kikuyu tribe are the majority (Central Kenya and lower Eastern Kenya), have consistently simultaneously exhibited the lowest poverty levels and the most significant reduction in poverty over time. On the contrary, the inhabitants of Western Kenya (the Luo and the Luhya tribes) have remained moderately poor and the Northern Frontier Districts have stayed “trapped” in poverty (mostly the Kenyan Somali). The key contribution of this chapter is its consideration of the dynamic poverty phenomenon, as opposed to the transient nature where poverty is experienced only at a specific point in time. Chapter four attempts to deepen the institutional/governance mechanism discussed in chapter one, locating the source of these inequalities in politics using regression-based analysis. The main objective of this chapter is to investigate the drivers of poverty at the household level and county level, and the effect of a change of governance structure on the distribution of poverty across counties, and whether this transition has effectively redressed the ethnic-identity-based resource allocation problem that has bedeviled the country for a long time. We profile trends and patterns of material well-being in Kenya and decompose the county poverty gaps. We find suggestive evidence that coethnicity with the president matters for household poverty outcomes. Our estimation results show that the key drivers of household poverty are the ethnicity status of the household head, the level of education, engagement in gainful employment, location of the household, gender of the household head and the number of household members. The estimations reveal that being coethnic with the incumbent President is contemporaneously associated with a lower likelihood of being poor, and much more, staying coethnic major counties confers additional benefits to the coethnic households. More importantly, the result points to the fact that even though ethnic inequalities may exist at the individual level, they could be overridden by regional redistribution. The spatial dimension of poverty imbalances seems stronger than the ethnic dimension. A household is able to gain more welfare if they moved to other regions where presumably more resources are being channelled. The implication of this finding could be that removing barriers to movement of people, or rather, strengthening social cohesion amongst communities could help reduce the ethnic inequalities, thereby improving the overall welfare. Decomposition of the poverty gap reveals that the significant differences in poverty levels between coethnic majority counties and non-coethnic majority counties that cannot be solely attributed to differences in county characteristics which hints at potential “discrimination” or “favoritism” that benefits president's coethnics and regions where they are a majority. A significant portion of the poverty differences therefore remains unexplained. Further analyses suggest that despite the implementation of devolution, the importance of patronage networks continues to be witnessed, implying that character of ethnic patronage politics persists. We find no doubt that president's regions disproportionately benefit from public goods and services. The Kikuyu dominant counties more especially on average have substantially lower poverty levels, higher access to employment opportunities, better road networks, high school quality, adequate health infrastructure, proper water distribution and connection to electricity (resources which are largely publicly provided) although the reasons for such disproportionate allocations remain unclear. Although we are unable to estimate whether local politicians also influence the distribution of these resources, nor whether the outcomes would be different in politically contested areas, our evidence largely suggests that institutional reforms, through devolution in this case, has not effectively reduced practice of ethnic favoritism in the distribution of public goods. Instead, the patterns are more likely to be consistent with clientelist public investment behaviors motivated by national presidential election outcomes. The final empirical chapter of the thesis, chapter five, extends these bias-related concerns to a new arena – the general labor market – examining differences in labor market outcomes as a function of coethnicity before and after the new dispensation in 2010. We estimate the coethnic effects, and the regime of entry effects in the labour market outcomes-wages and employment; whether sharing the same ethnicity as the President today, or indeed, sharing ethnicity with the incumbent President when one was first eligible to enter the labor force, matters for contemporaneous employment and earnings. Due to the richness of data, most of the analyses in this chapter are primarily based on KIHBS 2015 data. However, evidence from the other datasets is also presented. We utilize the quasi-experimental technique; the regression discontinuity and probability score matching in these analyses. Our results reveal evidence of coethnic biases in different sectors and types of employment across both earnings and employment in the general labour market. Overall, we find that when Kalenjins are in power in 1999, they have higher chances of getting wage employment relative to non-Kalenjins. The same pattern is observed for the Kikuyu in 2009, and 2019, when they control the presidency. This finding suggests that coethnic biases continue to matter in the labour market, even in the post devolution, even though the magnitude has dampened. The coethnicity status at the regime of first entry into the labour market plays a significant role in today's employment and earnings. Sharing the same ethnicity with the ruling elite at the time one enters the labour market is associated with significantly higher employment probabilities today. While the coethnic effects especially for access to paid job seem manifest at the time of entry into the labour market, these effects dampen for the coethnics who have stayed longer in the job market. The recent coethnic cohorts seem to have higher employment probabilities than the earlier regime entrants. Hence, the biggest coethnic differentials are therefore pronounced at the time of entry but do not persist for long. This chapter also finds that the coethnic effects of employment are prevalent both in the private sector and the public sector. Different from earlier studies that do not find pronounced ethnic biases in employment in the Kenyan public sector, our findings reveal the existence of such biases across all regimes of entry. Our findings are consistent with the evidence from the administrative datasets derived from the audit of parastatals in Kenya, that find oversubscription of certain ethnic groups. We find results indicative of this evidence using the household survey dataset. Chapter Six of the thesis provides a summary of the thesis findings, policy implications and document areas for further research, highlighting the main findings and suggested policy implications and recommendations from the thesis. In conclusion this thesis has elucidated the pronounced tendencies of ethnic imbalances and their relationships with the political processes, to support policy formulation in redressing the longstanding challenges of poverty, equity, and inclusivity in Kenya. The findings from this thesis vitally contribute to the ongoing attempts to undo the legacy of ethnopolitical favoritism, not just in Kenya, but in sub-Saharan Africa more broadly, where these issues are widespread. We find that coethnicity with the President comes out as an important element in the conduct of social and political affairs in Kenya, with direct implications on poverty and the labour market. We also find persistence of poverty experience within counties. Most counties have remained in the same state over the study period. Particularly, counties dominated by the President's coethnics have remained relatively richer than other counties, besides having the greatest poverty reduction, while others have remained trapped in poverty. Our findings also reveal that transition to devolved system of governance from the central government structure has not significantly altered the resource distribution based on ethnopolitics, but the coethnic wage gap has reduced significantly in the post-2010 constitutional dispensation. Although it might be too early to comment on the effectiveness of devolution since Kenya is only at its initial stages, our evidence suggests that devolution has not reduced the ethnic favoritism in regional development. The persistence of ethnic favoritism in the post devolution era shows that the new constitutional dispensation and other legislations in pursuit of equitable access to resources and opportunities have not been effective in addressing the long-term challenges of county inequalities. Political exclusion and inequitable and unequal distribution of resources and opportunities have been longstanding issues in Kenya. This study, however, has been subject to limitations including data and the scope of coverage. A lot of potential further research in this area remain to be desired. With availability of data, over a long period of time, more accurate empirical investigations can be conducted to guide policy formulation on poverty reduction and narrowing the inequality. While we have attempted to control for all the possible empirical factors given our data-time trend, extent of urbanization, being Presidents coethnics, the proportion of the population with post-secondary schooling, and the proportion of the population with paid work, the empirical data may not convincingly rule out many other potential explanations. Some of these unobserved factors in our data may include better equipped bureaucracies, stronger representation in the national assembly, more effective county executives, among other factors, which we have not controlled for. Although we have convincingly provided evidence of persistence of ethnic imbalances beyond the governance reform period, future studies may consider adding additional empirical material that could support the assertions in this thesis. To exhaustively attribute the differences to political favoritism would require additional analysis using granular data with information on the conduct of bureaucrats-economic planners, resource allocation and electoral outcomes for instance. Another potential area of consideration could be whether political and ethnic favoritism in resource distribution play out differently in politically contested areas from the areas regarded as strongholds. Due to data limitation, we have estimated only the overall extent of favoritism, but not investigated the potential sources of these biases. However, assessing accountability channels by comparing different contexts (resources or index of resources in general) can confound other differences, posing an empirical challenge-especially when these projects are implemented in different phases. There is need to go beyond the canonical existence of political favoritism, and investigate further, the mechanisms through which the favoritism is implemented. Moreover, our study has only relied on the on- and off-election cycles (between political regimes). It might be useful to evaluate political favoritism using data that allows us to study how public goods provision tracks political developments at a high frequency. Investments in public projects for instance may accelerate in the weeks immediately before voting, and slow down significantly in the post-election period. Rather than assuming that coethnics continue to benefit from public goods provision throughout the Presidency of the incumbent leaders, mapping out the temporal process of ethnic and political favoritism gives more granular information which does not conceal within-period biases. This would contribute to understanding the timing of fiscal spending around the election cycle. Finally, one of the key limitations in this thesis is data limitation, especially with regards the ethnicity variable, which we inferred by from proxies. This might have an impact on the robustness of our result. Key policy implications arise from this thesis. First, there is need for significant tracking and scrutiny of government spending behaviour to curb the persistent ethnic and political biases. There is need for increased media coverage of distribution of public investments. This has an effect of increased accountability. Evidence shows that public investments which were hard to track and hidden from the public eye, especially within the implementation phases—exhibit significant favoritism, while stages which are disclosed publicly and receive widespread media coverage. Therefore, increasingly active independent media scrutiny as well as increasingly robust democratic institutions, expanding constraints on executive power, and donor oversight may partly curb favoritism. Rigorous democratic institutions and a free and transparent press can empower citizens to hold their elected officials accountable. International donor agencies should increasingly place strict conditions on the use of their funds to restrain corruption as strict donor conditionality on donor-funded projects. Evidence shows that oversight by international aid donors may help restrain favoritism in stages when the project is under the donor's scrutiny.