Abstract
The study is in line with Oates (1951), where fiscal decentralization is explained as the delegation of income and consumption powers from the central government to the devolved units, both local and national levels within the framework of decentralization. Fiscal decentralization is considered to be the panacea in eradicating poverty, particularly in developing countries. This review entails the assessment of the influence of fiscal asymmetric decentralization on household effects. Specifically, the review looks at the interaction between budget efficacy, fiscal policy, and county treasury management and household effects. Despite the fact that scholarly work has been conducted on all the concepts, arguably inadequate attention has been given to the influence of fiscal asymmetric decentralization on household effects. Furthermore, scanty information was found on revenue disparity or financial planning attributes. In addition, not much has been done on fiscal control by subnational governments and self-fiscal reliance as counties continue to rely on funding from the national governments although counties have considerable potential to generate their own revenue. The challenges of comprehensive results are observed, and the study concludes that it appears critical to focus more on analysis that will establish the link of control theory and practice, which will need more firm and integrative study process.
Highlights
Kenya experiences high levels of income inequality against a backdrop of information that fiscal decentralization may yield unintended economic consequences in states attributed with increased levels of overall income inequality and/or large regional economic and political disparities
Despite the fact that scholarly work has been conducted on all the concepts, arguably inadequate attention has been given to the influence of fiscal asymmetric decentralization on household effects
Following a critical review of past research, the paper concludes that economic theory is not in line with statistical evidence in relation to the relationship between fiscal decentralization and household effect
Summary
Kenya experiences high levels of income inequality against a backdrop of information that fiscal decentralization may yield unintended economic consequences in states attributed with increased levels of overall income inequality and/or large regional economic and political disparities. Kenya is characterized by various features including demographics, demographic, social and disparities It is among the states in the subregion that have high levels of inequality. Some of the African countries that have decentralized their goods and services provision from the central level to the county governments include Botswana, Burkina Faso, Ethiopia, Ghana, Mali, Mozambique, Nigeria, South Africa, Tanzania, Uganda, and Kenya (Dickovick and Riedl, 2010). Income inequality that is estimated by the Gini coefficient is exceptionally high in Africa 0.411 in 20002009 compared to 0.5211 (Latin America and the Caribbean) and 0.367 (Asia). The Republic of Kenya has in the recent past initiated changes aimed at promoting regional independence This includes enacting and repealing a wide range of existing Acts of Parliament to achieve full decentralization and give more autonomy to county governments. The government has created an equalization fund to bridge the gap between the poor and rich counties, all aimed at increasing the household effects
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