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3. Effective Governance
3.1 Democratic Representation
3.2 Lack of Corruption
3.3 Efficient Administration
In-Country Assessment Information

3. Effective Governance

While overall levels of corruption remain high, the level of awareness and public outcry has increased, resulting in a reduction of openly corrupt practices. Yet, a resurgence of systemic or high-profile corruption is on the rise, in many cases relating to property markets. Despite efforts to reform, Lands Minister James Orengo has recently admitted that the fight against graft in his ministry may take longer to be effective due to “the endless chain of corrupt officials and brokers involved in land transactions and syndicates.”

Patron-client relationships still exist within the public sector and there are cases of corruption that involve council officers colluding with clients to manipulate assessed land values in order to lower their annual property tax rates. At the same time, the public in general and the small business community specifically report that some administrative procedures have improved. For instance, it now takes less time to obtain a police abstract, driving license, or business permit.

 

Goal – A popularly elected government free of corruption and functioning efficiently and transparently enough to guarantee economic freedom to individuals and support equitable property markets

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3.1 Democratic Representation

Core Question: Does the country have free and open elections for the leadership and can citizens engage in free enterprise? No – Weak, Kenya’s democracy suffered a low point in 2007 when rigged elections were followed by violence. However, the new Constitution, peacefully approved in a 2010 referendum, should bring about reforms.

3.1.1 Voice & Accountability
3.1.1.1 Are citizens able to elect their government and do they enjoy freedom of expression, association and a free media? No – Weak – Percentile Rank – 39.8 Trend ↑; Freedom House notes that Kenya’s civil liberties have improved due to the reduced threat of ethnic and political violence.

Sources:Governance Matters 2010, World Bank (www.govindicators.org); Freedom House 2011 (http://freedomhouse.org/template.cfm?page=22&year=2011&country=8066).

3.1.1.2 Are citizens free to form political and civic organizations free of state interference and surveillance? Yes – Weak – Score 5.29 out of 10Overall Ranking – 101st out of 167 Trend ↑

Source:The Economist Intelligence Unit Democracy Index 2010
http://graphics.eiu.com/PDF/Democracy_Index_2010_web.pdf

3.1.2 Public Information
3.1.2.1 Are there regulations governing conflicts of interest in the executive and legislative branches of government? No – Executive Score 53 out of 100 – Very Weak; Legislative Score 57 out of 100 – Very Weak

3.1.2.2 Can citizens access legislative processes and documents? No – Score 38 out of 100 – Very Weak (2009)

Source:Global Integrity Report – http://report.globalintegrity.org/Kenya/2009

3.1.3 Market Intervention
Overall Freedom Ranking – Weak 106th out of 179 Trend =

3.1.3.1 To what extent does the government intervene in the private sector including state owned industries? Score 72.8 out of 100 with a higher score indicating less intervention

3.1.3.2 To what extent does the government control prices? Score 73.2 out of 100 with a higher score indicating less control

Source:2011 Index of Economic Freedom – Heritage Foundation,
www.heritage.org/index/Country/Kenya

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3.2 Lack of Corruption

Core Question: Is the public sector transparent and free of corruption? No – Very Weak. However, new Constitution creates institutions to help address corruption issues.

Transparency
3.2.1 What is the perceived level of corruption in the country? Very Weak – Ranking – 154th out of 180; Score 2.1 out of 10 Trend ↓

Source: Transparency International, Corruption Perceptions Index 2010 , www.transparency.org/policy_research/surveys_indices/cpi/2010/results

Integrity Mechanisms
3.2.2 A National Integrity System is a framework where the principle institutions that contribute to integrity, transparency and accountability in a society can address corruption in a systematic way. Does a National Integrity System exist? Yes – Weak, to be addressed by constitutional reforms.

Source: Transparency International,

http://archive.transparency.org/policy_research/nis/nis_reports_by_country

Extralegal Payments
3.2.3 How often do companies report that officials and/or companies expect additional payments to “expedite” services or gain business? 79.2% of firms say they are expected to make unofficial payments – Very Weak

Source:Enterprise Surveys, World Bank, 2007,

www.enterprisesurveys.org/ExploreEconomies/?economyid=101&year=2007

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3.3 Efficient Administration

Core Question: Are quality services and qualified civil servants available to the public through the efficient use of public money? Yes – Strong, reforms in public financial management have continued. However, political patronage in civil service appointments is still quite strong.

Size of Government
3.3.1 What is the size of government relative to GDP? 30.1% – 25 to 30% considered optimum – Strong

Source:2011 Index of Economic Freedom, Heritage Foundation,
www.heritage.org/index/Country/Kenya

Civil Service
3.3.2 What is the quality of the civil service? Strong – Score 77 out of 100

Source: Global Integrity Report – http://report.globalintegrity.org/Kenya/2009

Government Effectiveness
3.3.3 What is the overall effectiveness of the government? Weak – Percentile Ranking – 35.9 Trend ↑

Source:Governance Matters 2010, World Bank, www.govindicators.org

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In-Country Assessment Information

FQ18: What is the actual experience of small businesses in dealing with the government, particularly the number and complexity of required procedures and the prevalence of extra payments to facilitate services such as licenses or permits?

Interviewed businesses noted improvements at the Nairobi City Council as it takes less time to obtain a business license. However, there are still cases of collusion between some City Council officers and clients to manipulate rates and various business approvals. Some public officials still require extralegal payments to expedite services. There remains a lack of political will to fight corruption. Although Kenyans are more assertive about corruption, it is slowly being transformed into systemic corruption. In many cases, corruption is no longer overt, e.g., there exist cartels in obtaining business licenses and in procurement relying on behind-the-scenes influence and conflicts of interest rather than open bribery.