Transformative Mistakes
Despite regular repetition by Kenyan Courts that the Constitution is one of the most “transformative and progressive” documents, many of its provisions exhibit ill-advised intentions and erroneous assumptions; one such example being the Equalisation Fund. The Fund is a regional preferential program under Article 204 of the Constitution of Kenya whose focus, as its name suggests, is the “equalisation” of development in Kenya by bringing “basic services including water, roads, health facilities and electricity to marginalised areas”. The Fund is supposed to expire in the year 2030 but Parliament can extend its life. It is incorrectly assumed that all areas in Kenya should be at the “same economic level” – whatever that means – and this is used to justify the existence of the Fund.
The Indian Constitution, like the Kenyan one, allows the State to make any special provision for the advancement of any economically weaker sections of citizens. Such preferential programs were supposed to expire within 20 years but have been repeatedly extended and expanded beyond their original scope. India’s preferential programs are now the oldest in the world having started under the British until now (see Thomas Sowell, Affirmative Action Around the World). If we can learn anything from the Indian experience, it is that Kenya has copy-pasted their practically permanent preferential programs that are temporary in name only.
Fallacies and Intentions
As Fernand Braudel points out, “In no society have all regions and all parts of the population developed equally.” The justification for the Equalisation Fund is that all areas in Kenya should be equally developed, and if they are not, this can easily be achieved by providing preferential treatment to the areas that have been “left behind”. This is untrue; we are setting out on the wrong premises while insisting on impossible outcomes.
Even countries that did not undergo colonialism, or any similar challenges, there was no uniform development in all areas of such countries; uniform development is a mere vision not a reality. The Equalisation Fund, like all preferential programs, was created to achieve outcomes that simply do not exist anywhere in history – excepting the Garden of Eden.
Everchanging Definitions
The Commission on Revenue Allocation has the power to “determine, publish and regularly review a policy in which it sets out the criteria by which to identify the marginalised areas.“ Therefore, the Commission can change the definition of “marginalised areas” from one year to the next while Parliament can prolong the life of the Fund indefinitely.
To this end, the Commission published its First Policy on 22nd February 2013 under which KES 12.4 billion was appropriated to the Equalisation Fund. After the fiscal year 2016/17, the Commission published the Second Policy which was to lapse in the fiscal year 2020/21. In the First Policy, the Commission defined a marginalised area as “a geographic location where significant populations of marginalised communities live.” With that definition, the Commission identified fourteen counties as marginalised areas. In the Second Policy, however, the Commission adopted a “new approach”, under which, unsurprisingly, 1424 areas were designated as “marginalised”:
Invoking the principle of equity, this second policy recognizes that there are pockets of extreme marginalisation even in prosperous places. Therefore, this policy adopted a new approach to identify marginalised areas. In this policy, the Commission has moved beyond identifying marginalised counties and instead, determined specific areas using sub-locations where marginalised communities live. This approach is expected to ensure that resources meant to improve services in lagging areas are properly targeted for the realization of maximum impact.
Because the year of expiry of the Fund is not yet here, there will be various changes in the definitions and scope of the “marginalised areas” to the point where the whole country practically becomes a marginalised area. And in the year 2030, it is far more likely for the Fund’s life to be extended rather than to be terminated.
In Kenya as in India, the creation of a preferential program creates incentives for its expansion using all sorts of innovative (re)definitions and formulae. Thomas Sowell’s analysis concerning India and other countries also holds good for Kenya due to the similarity of incentives:
Whatever the peculiarities of particular countries, the general patterns which have emerged in one country after another strongly suggest that similar incentives and constraints tend to produce similar consequences among human beings in widely disparate circumstances.
The Fund has created vested interests on all sides which means it incentivizes Parliament to extend its life, the Commission to expand the (re)definitions, and the beneficiaries to support whatever expansions and extensions may be needed – even if the country is worse off on balance. Consequences are not optional no matter the beauty of the intentions that led to the regrettable choices in the first place.