Kenya's Reform Experience: What Have We Learnt?
Working Paper No. 12
Abstract
The study analyzes the reform process in Kenya focusing on economic reforms undertaken in the 1980s and 1990s. Despite the economic crises of the 1970s, the government only started market-oriented reforms in the 1980s following donor pressure. The 1980s were characterized by structural adjustment programmes—mainly import liberalization and a shift from import substitution to export-promotion strategy. However, there were minimal achievements in the period due to a lack of commitment to the reforms. Stringent conditionalities leading to suspension of donor funds ensured speedy and broader implementation in the 1990s. The International Monetory Fund and World Bank set the pace and reform agenda. Throughout the process, the civil society helped in pushing for political reforms and good governance.
Weak commitment to reforms strained the relationship between donors and government, leading to stop-go pattern in lending while reform implementation and ownership remained weak. An unsupportive political structure, vested interest groups, lack of consultations and consensus building and inherent uncertainty of the reforms caused resistance and policy reversals.
The government managed to implement several reforms, such as trade liberalization and cost sharing in the social sector, but public sector reforms remained a challenge, given their role in sustaining patronage and the political implications. Despite the reforms, economic growth was dismal, especially in the 1990s. The reforms disproportionately affected the poor, worsening the asymmetries in income. This study concludes that political institutions, stakeholders participation, and proper sequencing are important factors in the reform process.
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