Does decentralization encourage pro-poor targeting? Evidence from Kenya’s constituencies development fund

Abstract

Decentralization is thought to facilitate poverty reduction by giving power over resource distribution to officials with local knowledge about where resources are most needed. However, decentralization also implies less oversight and greater opportunities for local officials to divert resources for political or personal ends. We investigate this tradeoff by exploring the degree to which Kenya’s premier decentralized development program—the Constituency Development Fund–targets the poor. Using a detailed spatial dataset of 32,000 CDF projects and data on the local distribution of poverty within Kenyan constituencies, we find that most MPs do not target the poor in their distribution of CDF projects. In places where they do, this tends to be in constituencies that are more rural, not too large, and, in keeping with the findings in Harris and Posner (2019), where the poor and non-poor are spatially segregated from one another. Our analyses suggest that the poor are underserved not just because politicians lack incentives to target them with development resources but because the poor are challenging to reach. In addition to these substantive findings, we also make a methodological contribution by underscoring how aggregation to the administrative unit may truncate important variation within geographic areas, and how a point-level analysis may avoid this pitfall.