The Impact of Decentralized Fiscal Funds on Primary Schooling in Kenya

Abstract

Improved standards of living for citizens is what any government strives to achieve. In doing this, governments use different methods. Governments improve welfare of its citizens through provision of public goods or utilities from which citizens derive utility. Many governments have set up various fiscal funds to that end. This study investigated the effect of fiscal funds on social welfare in the Kenyan context. In particular, the study determined the effect of Constituency Development Fund (CDF) on demand for primary schooling, a quasi-public good. A time series from 1970 to 2015 was used. Annual enrollment in class one in public schools was used as the dependent variable while the explanatory variables were; MCg (government expenditure per pupil), CDF which was dummy, parent literacy and Pupil-Teacher ratio. MCg and parent literacy have significant effect on primary schooling.