In this paper we estimate the amount of tax evasion in customs authorities in both Kenya and Tanzania by calculating measurement errors in reported trade flows between the two countries and correlate those errors with tax rates. We find that the measurement error is correlated with the tax rates in both Kenya and Tanzania. According to the Transparency International Corruption Perceptions Index, Kenya is more corrupt than Tanzania, but we find that the coefficient on tax is higher in Tanzania compared to Kenya implying that tax evasion on imported goods is higher in Tanzania compared to the Kenya. We also introduced a third country into our analysis, the United Kingdom, and tax evasion seems to be more severe in trade flows between Kenya and Tanzania compared to trade flows between the United Kingdom and Kenya/Tanzania. Finally we also find that the tax evasion coefficient is lower in the Kenya-United Kingdom case compared to the Tanzanian-United Kingdom case which supports our previous finding that tax evasion is more severe in the Tanzanian customs authority. * We are grateful to Stephen N Karingi, KIPPRA, TRA, Sida/Sarec and seminar participants at Karlstad University for valuable comments and help in collecting tax data. The usual disclaimer applies.

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In Kenya, educational enrollment rates increased significantly for both girls and boys after 2003, when primary education became free of charge. Unfortunately, approximately one million school-aged children are still not enrolled in school. Earlier literature provides empirical evidence that educational opportunities differ among children, due to poverty, gender, rural area of residence and disability. Our paper contributes to the literature by providing empirical evidence of the importance of children's ethnolinguistic background for their probability of being in school. Estimates from a three-level random intercept probit model using data from the Kenya Integrated Household Budget Survey 2005/06 reveal that Somali and Maasai children are least likely to be in school. A separate analysis by child's gender shows that compared to Kikuyu children both girls and boys from the Somali and Maasai groups, but also Mijikenda and Swahili girls, have a lower probability to be in school. This might be an indication that gender norms are stronger in these groups.

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