Determinants of per capita income growth in Kenya [1965-1995]: an empirical investigation

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University of Dar es Salaam
Rapid and sustained per capita income growth in Kenya has been an elusive target to policy makers since independence. The search for the best strategy to ensure sustainable per capita income growth has persistently failed to achieve specific targets as defined in various development plans. This justifies the need for continuous research in this area. Towards this goal, emphasis has been placed on stimulating economic growth and hence per capita income through creation of an enabling environment for private investors, reduction of government role in direct production and development of human capital. Alongside this, has been the emphasis on controlling population growth and achievement of macroeconomic stability. The task of this study is to empirically investigate factors behind the growth of per capita income in Kenya covering the period 1965-95. It is thus a country study unlike most past studies done elsewhere that has been cross sectional in nature. One of the hypotheses that is tested is that investment (private and public) is positively related to per capita income growth. The hypotheses of this study have been investigated using OLS estimation technique and test of co integration. The regression results reveals that trade policy, macroeconomic policies, population and structural policies have some impact on per capita income growth in Kenya. Despite limitations of the coverage and poor quality data, the findings of this study set a good direction on policies pertaining to per capita income growth that should be put in place to raise standards of living in Kenya. The findings of this study will thus be useful guidelines to policy makers when deciding on measures to be put in place in order to achieve high and growing per capita income in Kenya. The findings will also widen the frontier of knowledge on per capita income growth. Further research is, however, encouraged in order to get a good policy mix of enhancing per capita income growth in Kenya
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National income, Accounting, Kenya
Mutuerandu, B. K. (1999) Determinants of per capita income growth in Kenya [1965-1995]: an empirical investigation, Masters’ dissertation, University of Dar es Salaam. Available at (