County Governance and Economic Development Index: Public Finance Management and Business Environment Governance in Seven Counties

Executive Summary

Download full report here

The County Governance and Economic Index is an audacious to attempt to evaluate county development from a spectrum of parameters that transcend the spheres of polit­ical governance, public finance, and economics. In this index, we collect data and take stock of the developments in public finance, particularly the use of public resources and governance of the economic environment. We analyze the Auditor General’s and the Office of Controller of Budgets (OCOB) report from seven counties: Kisumu, Nairobi, Machakos, Kiambu, Mombasa,Nakuru and Uasin Gishu since 2013, for the Political Governance sub – Index, although the Political Governance sub-index primarily deals with ­public finance management are ultimately functions of the political office bearers like the governors and their willingness to institute the same. For the Economic Governance sub-index, we analyze the World Bank’s sub-National Doing Business Report for 2016, for the same seven counties with the exception of Nakuru.

The composite County Governance and Economic Development Index has fourteen data points, the Political Governance sub -Index, accounts for nine data points while the Economic Governance sub-Index accounts for four data points.

The data points for the Governance sub-index include: Availability of the County Inte­grated Development Plan (CIDP); Availability of the County Fiscal and Strategy Paper (CFSP); Timely dissemination of the County Budget Estimates (CBE); Availability of the Annual Development Plans (ADPs), Availability of the County Budget Review and Outlook Paper (CBROP); Development Expenditure as a percentage of/ total County Expenditure (DevEx); Procurement Based Queries as raised by the Auditor General’s re­port (ProQuery); Imprest queries as raised by the Auditor General’s report (ImprQuery); and Cash Balance queries as raised by the Auditor General’s report (CashBalQuery).

The data points for the Economic Governance include data collected by the World Bank’s: “Doing Business in Kenya 2016” report. It evaluates the relative ease of Deal­ing with Construction Permits; the relative ease of Registering Property; the relative ease of Enforcing contracts and the relative Ease of dealing with construction permits in each particular county.

Data collected shows the distinction between the Political Governance sub-index and the Economic Governance sub-index. For example, in the Political governance sub-index, Machakos County comes atop of the seven profiled counties by having an aggregate score of 65.68%, the lowest ranked county in the Political Governance sub-index is Mombasa county with an aggregate score of 52.69%.In the Economic Governance sub-Index, Kisumu County scores the highest points on average of the four parameters examined, scoring an average of 65.3%, while Nairobi county has the lowest average score with a score of 62.8%. The Economic Governance sub-index shows quite some variability across the data points. Some counties have very good scores when it comes to some aspects of the Economic Governance sub-Index like enforcing contracts for example, whereas they are very poor at others, like dealing with construction permits.

Of the seven counties analyzed, Machakos County has the highest score in the compos­ite County Governance and Economic Index; with a score of 64.93%, whereas Mombasa County has the lowest score of 58.8%. All counties surveyed, with the exception of Mombasa, have higher scores in the Political Governance sub-Index.