Unrealistic expectations, frustrated progress and an uncertain future? The political economy of oil in Kenya

Abstract

This paper contributes to an offshoot of the resource curse literature which has examined the cognitive drivers of the phenomenon. It explores how growing expectations of an oil-related boom in Kenya have affected intra-core power contestations and central state functioning. Kenya has experienced two waves of resource boom expectation. The first came in 2006, when the discovery of oil in neighbouring Uganda triggered an exploration rush in Kenya. Recognising the potential for rent generation, particularly around licensing, politicians became increasingly active in the sector. This led to worsening outcomes in terms of state governance and capacity, as Kenya's oil institutions became the site of intra-elite contestations over rents. Kenya's second wave of resource expectation came in 2012, following its own oil discoveries. These necessitated the creation of a new institutional framework for developing the sector, a process that has also been heavily conditioned by – and, in-turn, further fuelled – intra-core contestations. This has resulted in an incoherent and contested institutional framework that has not only stunted and slowed Kenya's efforts to exploit its proven oil resources, but also raised broader questions about the sector's viability and credibility.