Volume 3; Issue 2 Manuscript- 1 - IJMST

Volume 3; Issue 2

Manuscript- 1

“EVALUATION OF MANAGEMENT OF CDF ON THE ECONOMIC

WELFARE OF COSTITUENTS OF SIAYA COUNTY”

www.ijmst.com March 2015

International Journal for Management Science

And Technology (IJMST)

ISSN: 2320-8848 (Online)

ISSN: 2321-0362 (Print)

Joseph Oduor Atieno

Lecturer & PhD Student,

Jomo Kenyatta University of Agriculture &

Technology, Kenya

Mr. Gerishom Wafula Manase



Technology, Kenya

Margret Omondi



Technology, Kenya

Francis Omondi Anachoni



Technology, Kenya

Mr. Oscar Sangoro

Lecturer

Mount Kenya University, Kenya

http://www.ijmst.com/

International Journal for Management Science and Technology (IJMST) Vol. 3; Issue 2

ISSN: 2320-8848(O.)/2321-0362(P.) March, 2015

Abstract

In his second year in power, President Kibaki introduced the Constituency Development

Fund (CDF).The implementation of CDF has been marred by repeated accusation of abuse of

funds, patronage due to excessive powers of the MP, incomplete projects, a lack of technical

capacity, poor planning and a litany of other weaknesses which threaten to undermine the

very success of the fund. Gem constituency therefore remains one of the relatively poor

constituencies in Siaya County. It is on the basis of such malpractices that the study sought to

evaluate the management of CDF on the economic welfare of the people of Gem

constituency. The research design was descriptive survey. The target population was 50,016

people in Gem constituency. The sample size was 397. The researcher cluster and purposive

sampling technique to select the respondents. Research instruments were questionnaires,

structured interviews and document analysis. The data was analyzed and presented using pie

charts, tables, bar graphs, line graphs. The findings showed that CDF management had

reasonable impact on the economic welfare of Gem constituents. The study recommends that

CDF management needs to involve all the stakeholders on economic development issues and

expand the level of fund provisions to the various projects in the constituency.

KEY WORDS: Constituency Development Fund, Economic Welfare; Management System.

1. Introduction

Parliamentary involvement in grassroots projects and in community development has been

growing in a diverse set of countries, including Jamaica, Pakistan, India, Bhutan, Ghana,

Uganda and Papua New Guinea. In Kenya, one policy tool for this involvement is

Constituency Development Fund (CDF), which dedicates public money to benefit specific

political subdivisions through allocations and/or spending decisions influenced by their

representatives in the national parliament. CDFs resemble the venerable U.S. congressional

allocations generally called “pork barrel,” “earmarks” or “member items” in national and

state-level policy making, Baskin, (2010).

After experiencing moderately high growth rates during the 1960s and 1970s, Kenya‟s

economic performance during the last two decades has been far below its potential. As a

result, per capita income continued to decline, from US$ 271 in 1990 to US$ 239 in 2002.

The number of unemployed people continued to rise. By 2006, the unemployed constituted

14.6% of the labour force, with the youth accounting for over 45% of the total. The majority


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of the unemployed, though educated, do not have the necessary skills. In addition, the number

of the working poor is staggering; comprising primarily, subsistence farmers, female headed

households and pastoralists. Disguised employment is also a serious problem especially in the

public sector, Kimani et.al, (2009)

The sharp deterioration in economic performance has worsened the poverty situation. About

46% of Kenya‟s population was living in poverty in 2006, an improvement from about 56%

in 2001 and in contrast with about 45% in 1990. The number of people living in poverty has

grown phenomenally over the last two decades, owing largely to increase in population size

and a contracting economy. Though the majority of Kenyans continue to reside in rural areas,

the number of people living in poverty is rising faster in urban areas than in rural areas.

About half of the population of Nairobi is estimated to live below the poverty line. Over this

period, the life expectancy for Kenyans has continued to decline from 58 years in 1988 to 44

years in 2003. Child and infant mortality had also arisen due to declining health standards,

Kimani et.al, (2009).

The Kenya government has historically responded to the emerging social and public

problems through the establishment of various decentralized financing mechanisms such as

Local Authority Transfer Fund (LATF) to address the underlying causes of poverty and

inequality. The study in this case seeks to focus on CDF. The CDF, which was established

through the Constituency Development Fund Act of 2003, is one of the ingenious innovations

of the NARC Government of Kenya.

CDF is an annual budgetary allocation by the Central Government to each of the country‟s

parliamentary jurisdictions-the constituencies. While there are several rules that govern the

utilization of the fund to ensure transparency and accountability, decisions over the utilization

of the funds are supposed to be mainly by the constituents. Unlike other development funds

that filter from the central government through larger and more layers of administrative

organs and bureaucracies, the funds under this program go directly to local levels.

In essence, the CDF is intended to provide individuals at the grassroots the opportunity to

make expenditure choices that maximize their welfare in line with their needs and

preferences. To the extent that the local population is better informed about their priorities,

the choices made can be expected to be more aligned to their problems and circumstances.

The CDF can therefore, be considered a decentralization scheme that provides communities

with the opportunity to make spending decisions that maximize social welfare. The CDF is an

example of what is generally referred to as CDD initiatives that empower local communities


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by providing funds often from the central government but sometimes from donor sources,

Kimani et.al (2009). Policy making on CDFs includes goals and size of the funds, the

structure of decision making on the use of the funds at all stages of implementation, oversight

of CDF operations, and the relative influence of different individuals and groups in making

policy.

The CDF is a strategy for devolution of resources. It was hoped that the strategy would

enhance people‟s participation and power in decision-making processes, promote good

governance, transparency and accountability, Kimani et.al (2009).

The CDF is one of the devolved funds in Kenya. Prior to the establishment of CDF the

constituency was solely a unit of political representation in Kenya, of which there are 210 in

the country. CDF provides that at least 2.5% of government revenue will be allocated to the

fund, which is geared towards the alleviation of poverty and promotion of local development.

Almost Kshs. 60 billion has been channeled through CDF since its inception. CDF

contributes over 10% to all development in Kenya, TISA (2009). The implementation of

CDF has however been marred by repeated accusation of abuse of funds, patronage due to

excessive powers of the MP, incomplete projects, a lack of technical capacity, poor planning

and a litany of other weaknesses which threaten to undermine the very success of the fund,

Gikonyo (2009).

Despite the CDF, Gem constituency still remains one of the poor constituencies in Siaya

County, KNBS (2009).It is on the basis of the financial malpractices that the study seeks to

evaluate the management of CDF on the economic welfare of the people of Gem

constituency.

Statement of the Problem

The Kenya government has historically responded to the emerging social and public

problems through the establishment of various decentralized financing mechanisms like

Local Authority Transfer Fund (LATF) to address the underlying causes of poverty and

inequality. The Constituency Development Fund (CDF), which was established through the

Constituency Development Fund Act of 2003, is one of the ingenious innovations of the

NARC Government of Kenya. CDF is an annual budgetary allocation by the Central

Government to each of the country‟s parliamentary jurisdictions-the constituencies. The

implementation of CDF has however been marred by repeated accusation of abuse of funds,

patronage due to excessive powers of the MP, incomplete projects, a lack of technical


ISSN: 2320-8848(O.)/2321-0362(P.) March, 2015

capacity and poor planning, which threaten to undermine the very success of the fund,

Gikonyo (2009). Despite the CDF, Gem constituency still remains one of the poor

constituencies in Siaya County, KNBS (2009). It is on the basis of the malpractices that the

study sought to evaluate the management of CDF on the economic welfare of the people of

Gem constituency.

Purpose of the study

The purpose of the study was to evaluate the management of CDF on the economic welfare

of the people of Gem constituency.

Research Objective

The study was to evaluate the effects of CDF on the economic welfare of the constituents.

Research Questions

What are the effects of CDF on the economic welfare of the constituents of Gem?

Significance of the study

The study is to contribute to the existing literature in the area of CDF management in Kenya

and also facilitate further research on other gaps not tackled. It is to help create community

awareness on available opportunities within the decentralized funds strategy. The study acts

as an initiative to enhance capacity of CBOs and communities to lobby and influence the

management of decentralized funds. The study also acts as a forum to advocate for increased

capacity of communities and local groupings to participate in decentralized fund processes

2. Literature Review

Review of Theories

The study was guided by the theory of Decentralization. According toFalleti,(2004), the

theory of decentralization teaches that the heterogeneity of preferences is a key determinant

of the efficiency of the public goods provision. The utilization of CDF is also expected to be

influenced by the degree of diversity. There are many parameters that capture the

heterogeneity of a community including income, economic activities, education and even

culture. Diversity is expected to influence scope of project choices.

In homogeneous communities, projects could be few but much larger in scope. Community

involvement is also much higher in more homogeneous communities, other things equal. On


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the other hand, more heterogeneous communities are likely to select many diverse projects to

cater for the diversity of preferences. Measures of population heterogeneity are therefore

necessary in order to capture variations in the characteristics of population that may impact

project choices across constituencies. Social-economic characteristics of a constituency have

a bearing on community participation. Key factor are those factors that impact on social

capital.

The average level of education in a constituency is expected to influence the involvement of

the community and also the extent to which they are able to monitor the utilization of funds.

It wasexpected that CDF projects were to be more in line with priorities in areas where the

average level of education is higher, Kimani et.al, (2009)

Likewise, religion also influenced the choice of projects and cohesiveness of a community.

This theoretical framework was therefore relevant to this study as it influenced the direction

of development in the constituency. The diversity in opinionwas seen in the projects such as

health facilities, infrastructure and even development of schools and colleges. It was on the

basis of such diversity that the study sought to evaluate the management of CDF on the

economic welfare of the people of Gem constituency.

Conceptual Framework

The conceptual framework as compiled shows the relationship between management of CDF

and welfare of Kenyans on the other hand.


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Figure 1.1: the relationship between the management of CDF and the economic welfare

of Kenyans

(Source: Owner’s compilation, 2013)

The researcher wanted to establish the relationship between management principles, strategic

planning, personnel qualifications and the welfare of Kenyans. The relationship was

moderated by factors such as interference from the MP, culture, policy and natural resources.

Empirical Review

Economic Welfare

According to Kimani et.al (2009) on Best Practices by CDF, it was established that CDF has

a great potential in transforming peoples‟ lives and turning around the Kenyan economy if

better implemented and the funds optimally utilized. Strengthening CDF is therefore not an

option but a prerequisite. Learning from the „strategies that work‟ and infusing them within

CDF implementation will add intrinsic value in promoting transparency and accountability in

CDF processes. Similar study on other funds can play a significant role in establishing some

lessons that can be synergistic in promoting bottom up development approach and achieve

the most elusive sustainable development and peace. There are indications that CDF is


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helping provide services to communities that for many years did not benefit substantially

from government services. In particular, the poor have in the past experienced serious

problems accessing basic services that are now made available through CDF. In this regard, if

the CDF initiative is properly implemented, it can play a significant role in the achievement

of the Vision 2030 objectives, which are overly geared towards enhancing economic growth

and poverty reduction.

3. Research Methodology

The research design was descriptive survey approach as it sought to describe the state of

affairs, as it existed. The researcher targeted the sixteen (16) members of the CDF committee

and the Fifty thousand (50,000) constituents, the aggregate of the two being the total

population that is to say 50.016 comprising women, youth, elderly, disabled, contractors,

local leaders like chief, Assistant Chief, Opinion leaders, beneficiaries of CDF projects and

members of the general public.

Table 3.1 Target Population

The researcher employed census for the members of the CDF Committee; both cluster and

purposive sampling technique. The sample population was 397 – using Krejcie model.

Krejcie Model.

Table 3.2 Sample sizes for given population size

Table 3.3 Sample Population

The researcher administered questionnaires and structured interviews to collect primary data

while secondary data was collected through the use of document analysis. The questionnaires

and structured interview questions were given to supervisors, lecturers and research experts

who analyzed them and confirmed that they suited the objectives of the study. A pilot study

was also carried out in Lurambi constituency which ascertained that the responses conformed

to the purpose of the study. Test-retest method where questionnaires were administered to

the respondents at two different times; a span of two weeks was allowed before giving the

second set of questionnaires to reduce chances of the respondents. Correlation coefficient

value of 0.84 was obtained to indicate reliability. Data was coded, tabulated, analyzed using

descriptive frequencies and percentages using SPSS was used to assist in further analysis then

presented by use of pie charts, tables, bar graphs, line graphs


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4. Findings

On gender, 210(53%) respondents were female while 187(47%) were male an indication that

female population was more than male population

Figure 4.1Genders of Respondents

Table 4.1Age vs. marital status

On age and marital status, findings revealed that 109 (27.5 %) respondents were in the age

group of between 18-30 and that 69 (17.5%) of the respondents were married and 40 (10%)

of the respondents were single. 149 (37.5%) respondents were in the age group of between

31-40 and that 144 (36.5%) of the respondents were married and 5 (1%) of the respondents

were single. 59 (15%) of the respondents were in the age group of between 41-50 and that 51

(13%) of the respondents were married and 8 (2%) of the respondents were single. 79 (20%)

of the respondents were in the age group of 50 and above. 71 (18%) of the respondents were

married while 8 (2%) of the respondents were single. The majorities of the respondents were

married and were in the age bracket of between 31 – 40 years.

Education vs. Employment

On Education and Employment, study revealed that 208 (52.5%) of the respondents attained

primary certificate, out of these, 129 (32.5%) were unemployed and 79 (20%) were self

employed. 109 (27.5%) of the the respondents attained secondary certificate, out of these, 39

(10%) were unemployed, 59 (15%) were employed and 10 (2.5%) were self employed. 79

(20%) of the respondents attained college certificate, out of these, 10 (2.5%) were

unemployed while 64 (17.5%) were employed.

Economic Welfare

Figure 4.3 Respondents awareness of CDF’s role

The findings indicated that 317 (80%) of the respondents were aware of the role of CDF, 69

(17.5%) of the respondents were not aware of the role of CDF and 10 (2.5%) of the

respondents were not sure of the role of CDF. The majority of the respondents were aware

about the role of CDF in the constituency. This was a clear indication that to a great extent

the respondents were reasonably informed and would therefore play an active role in keeping

the CDF management on their toes.

Respondent’s opinion on the effectiveness of CDF on community development

Figure 4.4 effectiveness of CDF on community development


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The findings were that 139 (35%) of the respondents felt that CDF has been effective in

initiating community development in the constituency, 218 (55%) of the respondents on the

other hand expressed their dissatisfaction with the effectiveness of CDF on community

development, 30 (7.5%) of the respondents did not know anything about CDF effectiveness

on community development and 10 (2.5%) of the respondents were not sure whether CDF

has been effective on community development. Majority of the respondents pointed out that

CDF had not been effective in community development. This indicated lack of involvement

of all stakeholders in decision making process by CDF management.

CDF contribution to respondent's economic welfare

Figure 4.5 CDF contributions to respondent's economic welfare

The findings indicated that 198 (50%) of the respondents agreed that CDF had contributed to

their economic welfare, 189 (47.5%) of the respondents did not agree that CDF had

contributed to their economic welfare while 10 (2.5%) of the respondents were indifferent.

Majority of the respondents agreed that CDF contributions had impacted positively on the

economic welfare of the constituents. This was therefore an indication that CDF is

succeeding in its noble role of alleviating poverty in the constituency.

Figure 4.6 Respondents’ ratings on CDF satisfaction on the constituents’ expectations

The findings indicated that 10 (2.5%) of the respondents felt that CDF rating with respect to

the satisfaction of expection was worse, 218 (55%) of the respondents felt that the rating was

bad, 169 (42.5%) of the respondents felt that the rating was good. CDF was therefore largely

not satisfying the expectations of the constituents as was demonstrated by the findings.

Some respondents felt that there was contradiction between the MP‟s party and the

constituency in advancing development goals of the constituency. Contradictory party

policies and manifestos, ineffective party policies were cited by the respondents to be the

source of problems on prioritization of projects. Selfish-interest among party members, it was

noted by the respondents that party members sometimes had selfish interest that contradicted

the wishes of the constituents.

5. Summary of Findings, Conclusions and Recommendations

Summary of Findings

The study was conducted in Gem Constituency, Siaya County and was aimed at evaluating

the management of CDF on the economic welfare of the people of Gem constituency. The

study involved both male and female respondents; the female respondents formed a larger


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majority than their male counterparts suggesting that women are more vulnerable to the

effects of economic welfare. The data showed that respondents in the age group of between

31 – 40 years were more active in the CDF management issues than the elderly. The study

found out that CDF management was to a reasonable extent fulfilling the larger mandate of

the CDF Act of Alleviating poverty in the grassroots.

The effects of CDF on the economic welfare of the constituents

The first objective was to evaluate the effects of CDF management on the economic welfare

of Gem constituents. It was found out that majority of the respondents were aware about the

existence of the CDF. They were however quick to point out that CDF had not been effective

in promoting community development. It was pointed out by the majority of the respondents

that CDF had not lived to its promises and therefore did not meet their expectations. About

half of the respondents who were perceived to reside closer to the main roads felt that their

economic welfare had improved due to the existence of CDF.

Conclusions

The study concludes that how CDF is managed in the constituency plays a key role in

determining the economic welfare of the constituents, this being one the key poverty

alleviation strategies by the then NARC government. The strategy seemed to be working

because there was tangible evidence on the ground as 50% of the respondents alluded to the

fact that CDF management had positively contributed to their economic welfare. It was

however noted that many of the projects that should have impacted positively on the

economic welfare of the constituents were not undertaken due to the fact that all stakeholders

were not involved in deciding the destiny of the constituency with regard to development.

Recommendations

The study did establish that since the introduction of CDF in Gem Constituency, there has

been some notable improvement in the economic welfare of the constituents. Based on the

findings of the study, the study proposes that CDF should spearhead the creation and

management of micro-finance institutions at the constituency level to facilitate accessibility

of cheap funds for economic developments.

Suggestion for further study

Based on the findings of the study, recommendations on the evaluation of CDF management

on the economic welfare of the constituents of Gem, the study suggests further research to be


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carried out using a larger sample and a study on the evaluation of CDF management on the

economic welfare of households in Kenya.


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References

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2000)

Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation:

Concepts, evidence, and implications. Academy of Management Review, 20(1), 65-91.

Elsageer Ahmed (2004) Centre for Development Research University of Bonn

Economic Recovery Strategy for Wealth and Employment Creation (2003-2007)

Falleti, T. (2004)Decentralization and Democratic Governance in Latin America,

Washington, DC: Woodrow Wilson Center for Scholars.

http://scholar.google.com/intl/en/scholar/about.html

Freeman, Harrison, Wicks, Parmar and De Colle, Stakeholder Theory, State of the Art,

Cambridge University Press, 2010.

Friedman, Andrew L.; Samantha M. 2011, Stakeholders: Theory and Practice. .

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Fumihiko,S.(2001), Faculty of Intercultural Communication, Ryukoku University,

Japan.

Garry J. 1997, Unleashing the Power of Sustained Corporate Success.Amacom .

Publications New York.

Gituto B.M.2007, Beyond CDF: Making Kenya‟s Sub-Sovereign Finance Work . for the

Socially Excluded, enrich Boll Foundation.

Jorge M. V., 2002 „Asymmetric fiscal decentralization: Cure or Poison?”

Research project, published at Georgia State University Press, U.S. 2002.

Kenya National Bureau of Statistics (KNBS), (2009).Economic survey. Nairobi:

Government Printer.

KIPPRA, (2007).Decentralized Funds.Research Report. Kenya Institute for

Public Policy Research and Analysis. http://www.kippra.org.

Kerlinger, F. N. (1986). Foundations of behavioral research (3rd edition.).New .

York: Holt, Rinehart, and Winston, Inc.

Kimani F., Nekesa P. and Ndungu B. (2007), Best Practices in Constituency .

Development Fund.Published by Collaborative Centre for Gender and .

Development 2009


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Mark B. (2010), Constituency Development Funds (CDFs) as a Tool of .

Decentralized Development, State University of New York International .

Development, http://www.aflia.org/uploads/publications

Kimenyi, Mwangi S., "Efficiency and Efficacy of Kenya's Constituency .

Development Fund: Theory and Evidence" (2005). Economics,Working.

Papers.200542. http://digitalcommons.uconn.edu/econ_wpapers/200542

Mansell J. V., 2002 „Asymmetric fiscal decentralization: Cure or Poison?”,

Research project, published at Georgia State University Press, U.S. 2002.

Mwangi S.K., and Patrick M., (2004), Devolution and Development, Ashgate .

Publishers, UK.

Mugenda, M.O, and Mugenda, G.A, (1999).Research Methods: Quantitative and .

Qualitative Approaches. Nairobi: ACTS Press.

Neuman, W. L. (2000). Social research methods: Qualitative and quantitative . approaches

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Robert V. Krejcie, the NEA Research Bulletin, Vol. 38 (December, 1960), p. 99.

The CDF Act, 2003, Nairobi, Government Printer.

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Accountability (TISA).

Appendices

Table 3.1 Target Population

Category Target Population Percentage

CDF Committee Members 16 0.03

Constituents 50,000 99.97

Total 50016 100

Source: KNBS (2009)


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Table 3.2 Sample sizes for given population size

Population Sample Population Sample Population Sample

Size Size Size Size Size Size

10 10 100 80 4000 351

20 19 150 108 5000 367

30 28 200 132 10000 370

40 35 250 162 20000 377

50 44 300 169 50000 381

60 52 400 196 100000 384

70 59 1500 306

80 66 2000 322

90 73 3000 341

Sourec:Krejcie(1970)

Table 3.3Sample Population

Category Sample Population Percentage

CDF Committee Members 16 4

Constituents 381 96

Total 397 100

For the purpose of this study, the researcher applied the Krejcie (1970) model in arriving at

the sample population, i.e.

n =(𝒙𝟐Npq) /(𝒅𝟐(N-1) + 𝒙𝟐pq

Where n = desired sample size

N = Target population

P = population proportion (take 0.5)

d = degree of accuracy reflected by the amount of error that can be tolerated in

fluctuation of a size about the population and corresponds to the significance

level with a standard error of the proportion at the corresponding confidence

level.

𝒙𝟐= the table chi square value for one degree of freedom relative to the desired level

of confidence (𝒙𝟐 = 3.841 at 95% confidence level).

Q = 1-p for binomial distribution.


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Figures

The respondents were asked to state their gender

Figure 4.1Genders of Respondents

Source: Survey data 2013

Table 4.1 Age vs. Marital status

Marital status (%) Total (%)

Single Married

Age of the

Respondent

18-30 10 17.5 27.5

31-40 1 36.5 37.5

41-50 2 13 15

50 and above 2 18 20

Total (%) 15 85 100


Table 4.2 Education vs. Employment

Employment (%) Total

Self-

employed Employed Unemployed

Education

Level (%)

Primary 20 0 32.5 52.5

Secondary 2.5 15 10 27.5

College 0 17.5 2.5 20

Total 22.5 32.5 45 100

Male 47%

Female53%

Gender of the respondent


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4.2.5 Respondents awareness of CDF‟s role

The respondents were asked to state their awareness about CDF

Sourec: Survey data 2013

Source: Survey data

Yes No Not sure

% 80 17.5 2.5

0

10

20

30

40

50

60

70

80

90

%

Level of awareness

35%

55%

7.50%

2.50%

Yes

No

Don't Know

Not Sure


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Figure 4.4effectiveness of CDF on community development


Figure 4.5 CDF contributions to respondent's economic welfare


Figure 4.6 Respondents‟ ratings on CDF satisfaction on the constituents‟ expectations

0

10

20

30

40

50

Yes No I don't know% 50 47.5 2.5

%

CDF contribution to respondent's economic welfare

Worse Bad Good Exellent

% 2.5 55 42.5 0

0

10

20

30

40

50

60

%

CDF ratings

Volume 3; Issue 2 Manuscript- 1 - IJMST

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