<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Fiscal transfer development across the world today has been in part driven by assertions of a supposed ‘economic dividend’ linked with the devolved financial spending. There is, however, little empirical evidence to validate these assertions in Kenya. It is against this background that this study was carried out to estimate the end product of fiscal transfer on regional economic growth in Kenya using a secondary panel data set. Using the ARDL estimation technique the long -run and error correction estimates of the model were generated. The findings revealed that increased fiscal transfer in recurrent budgets accelerates regional growth, hence confirming the Keynesian hypothesis. Conversely, fiscal transfer in capital expenditure was insignificant. This study recommends the need for policymakers to put in place policies and strategies that will improve budget allocation and execution in capital budgets so as to improve physical infrastructure and thus boost private productivity and consequently regional income growth.</p>
</abstract>

Fiscal transfer development across the world today has been in part driven by assertions of a supposed ‘economic dividend’ linked with the devolved financial spending. There is, however, little empirical evidence to validate these assertions in Kenya. It is against this background that this study was carried out to estimate the end product of fiscal transfer on regional economic growth in Kenya using a secondary panel data set. Using the ARDL estimation technique the long -run and error correction estimates of the model were generated. The findings revealed that increased fiscal transfer in recurrent budgets accelerates regional growth, hence confirming the Keynesian hypothesis. Conversely, fiscal transfer in capital expenditure was insignificant. This study recommends the need for policymakers to put in place policies and strategies that will improve budget allocation and execution in capital budgets so as to improve physical infrastructure and thus boost private productivity and consequently regional income growth.

Do Fiscal Transfers Foster Regional Economic Growth?

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Do Fiscal Transfers Foster Regional Economic Growth?"}

Fiscal transfer development across the world today has been in part driven by assertions of a supposed ‘economic dividend’ linked with the devolved financial...

Do Fiscal Transfers Foster Regional Economic Growth?

Published Online: Mar 31, 2021

Page range: 19 - 27

Received: Dec 28, 2020

Accepted: Mar 02, 2021

DOI: https://doi.org/10.2478/fiqf-2021-0003

Keywords
regional economic growth, fiscal transfers, capital, recurrent, Kenya

© 2021 Naftaly Mose, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Do Fiscal Transfers Foster Regional Economic Growth?

Published Online: Mar 31, 2021

Page range: 19 - 27

Received: Dec 28, 2020

Accepted: Mar 02, 2021

DOI: https://doi.org/10.2478/fiqf-2021-0003

Keywordsregional economic growth, fiscal transfers, capital, recurrent, Kenya

© 2021 Naftaly Mose, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
regional economic growth, fiscal transfers, capital, recurrent, Kenya