ABSTRACTThe study is set out to demonstrates that high scale corruption

may have very harmful effects on

economic, political and communication development in Kenya .

Corruptions as one of the oldest phenomenon in human society

exist in every country contemporary world. Corruption can be

defined in many ways such as general disease of body politics,

public exploitation and abuse of public office for private gain.

The causes of corruption also are many in number. For example,

cultural factor, psychological factor and system related factors

may cause corruption in every society. There are some factors

such as monopoly power, discretionary power and weak

accountability of public officials may give opportunities for

corrupt acts. Corruption may decrease the efficiency of public

spending, decrease the budget revenues, raise the budget deficit,

hinder Foreign Direct Investment, reduce the effectiveness the

use of aid, dissipate political legitimacy and hinders the

democratic development. The anticorruption campaign should mainly

concentrate on the reforms of civil service, judiciary system,

and tax and custom departments. In Kenya the successful

implementation of anticorruption campaign is preconditioned by

the free and fair elections, politically educated people and by

honest leaders.

1

CHAPTER ONE

INTRODUCTION AND RESEARCH DESIGN

1. INTRODUCTION

Corruption has recently become a major issue in foreign aid

policies. However, behind the screens it has always been there,

referred to as the “c-word”. The major concern for international

aid policy through the last five decades is to improve the living

conditions for the poor in the poorest countries of the world.

This Endeavour requires a close co-operation with the national

governments in poor countries. Generally speaking, however, the

governments in poor countries are also the most corrupt. This is

one of the few clear empirical results of recent research on

2

corruption. The level of GDP per capita holds most of the

explanatory power of the various

Corruption indicators (Treisman, 2000; Paldam, 1999a).

Consequently, if donors want to minimise the risk of foreign aid

being contaminated by corruption, the poorest countries should be

avoided. This would, however, make aid policy rather pointless.

This is the basic dilemma corruption raises for aid policy.

Unlike international business most development aid organisations

and international finance institutions have the lion’s share of

their activities located in highly corrupt countries (Alesina and

Weder, 1999).

The international community in general and some donor countries

in particular are, however, increasingly willing to fight

corruption. Within the “good governance” strategies of the World

Bank and the International Monetary Fund initiatives to curb

corruption are given priority. OECD and the UNDP have also

developed particular anti-corruption programmes to assist

governments in tackling the problem. Furthermore, several

bilateral development agencies have placed anti-corruption

efforts high on their development agenda. Whether this is a

desirable change in focus of aid policy, and, hence, whether it

is possible to find workable policy instruments to fight

corruption, remains to be explored. Corruption is a problem that

mainly arises in the interaction between government and the

market economy where the government itself must be considered

endogenous. Therefore it is complex to handle from a theoretical

3

point of view. This difficulty is underlined by the fact that

data are difficult to gather, and, if available, data are often

“soft”, unreliable and masked. Moreover, from an aid

organisation’s point of view the issue of anti-corruption may

become diplomatically delicate since at least some of the

stakeholders who are handling the aid instruments in the partner

countries, are likely to be part of the problem.

Despite this complexity, academic research has made some

interesting clarifications of likely general causes, set some of

the agenda for defining the key issues and thereby prepared some

of the groundwork necessary for formulating anti-corruption

policies and programmes. However, corruption deals with actions

performed by agents in specific political and bureaucratic

organisations, all applying considerable implicit information.

Often corruption will spread among organisations within the same

polity. Therefore, it has proven fruitful to combine country

specific knowledge and thematic knowledge on corruption when

tracing the causes of corruption, to understand the variety of

corruption(s), and to suggest remedies and cures for fighting

corruption. Comparative research has to some extent offered

insights that are potentially replicable in other situations, and

may clarify the extent to which the experiences of one country or

institution are transferable to others. But, comparative and

general insights on causes and possible remedies will have to be

tailor-made to the specific situations.

4

1.1 BACKGROUND TO THE STUDY

Corruption is efforts to secure wealth or power through illegal

means for private gain at public expense; or a misuse of public

power for private benefit. Corruption like cockroaches has

coexisted with human society for a long time and remains as one

of the problems in many of the

World’s developing economies with devastating consequences.

Corruption as a phenomenon, is a global problem, and exists in

varying degrees in different countries (Agbu, 2001). Corruption

is not only found in democratic and dictatorial politics, but

also in feudal, capitalist and socialist economies. Christian,

Muslim, Hindu, and Buddhist cultures are equally bedeviled by

corruption

(Dike, 2005). Corrupt practices are not an issue that just begins

today; but the history is as old as the world (Lipset and Lenz,

2000).

In Kenya, it is one of the many unresolved problems (Ayobolu,

2006) that have critically hobbled and skewed development. It

remains a long-term major political and economic challenge for

kenya (Sachs, 2007). It is a canker worm that has eaten deep in

the fabric of the nation. It ranges from petty corruption to

political / bureaucratic corruption or Systemic corruption

(International Center for Economic Growth, 1999). World Bank

studies put corruption at over $1 trillion per year accounting

5

for up to 12% of the Gross Domestic Product of nations like

Kenya Nigeria and Venezuela (Nwabuzor, 2005).

Corruption is endemic as well as an enemy within (Agbu, 2003). It

is a canker worm that has eaten deep in the fabric of the country

and had stunted growth in all sectors (Economic and

Financial Crime Commission (EFCC), 2005). It has been the primary

reason behind the country

difficulties in developing fast (Independent Corrupt Practices

Commission (ICPC), 2006). This is

evident in Transparency International’s has consistent rating of

Kenya among the top most corrupt countries in the world (Ribadu,

2003).

As part of effort at fighting corruption and strengthening the

economy, Kenya embarked on an

aggressive pursuit of economic reform that through privatization,

banking sector reform, anticorruption campaigns and establishment

of clear and transparent fiscal standards recently.

The major aim of the economic reforms in Kenya is to provide a

conducive environment for

private investment (African economic outlook 2006). The reform

process has the following key pillars: improved macroeconomic

management, reform of the financial sector, institutional

reforms, privatisation and deregulation, and improvement of the

infrastructure.

6

The importance of infrastructure for economic growth and

development cannot be overemphasized. The poor state of

electricity, transport and communications is a major handicap

for doing business in kenya. All these was due to corrupt

officials and leaders

.

1.2 PURPOSE OF THE STUDY

The study is set out to demonstrates that high scale corruption

may have very harmful effects on

economic, political and communication development The purpose of

this report is to review the “state-of-the-art” in international

corruption research. The study has two objectives. First, it aims

to review the essential elements of the various approaches that

have been used to analyse the causes and effects of corruption.

Thus, the study is organised as a literature review, extracting

and evaluating the core elements of corruption research in

economics, political science and sociology/anthropology.

Second, it aims to explore how research has been applied in

developing countries. This is a question of what policy

recommendations have been made, and what might be learned from

the anti-corruption campaigns and policies applied in specific

countries.

Ten years ago research on corruption was a small field.

Currently, however, a large number of articles and reports are7

published every month. This development partly reflects an

increased public concern for the problem. Furthermore, at least

in the case of economics, it reflects internal changes in the

analytical approaches and tools of the discipline combined with

access to new data that has made corruption a researchable topic.

Thus, it has also made it easier carry out a “survey on

corruption research” since many interesting contributions and

insights are available. On the other hand, it has also become a

more demanding task because of the sheer bulk of readings that is

sprawling in all kinds of thematic and intellectual directions.

The study is not meant to be comprehensive. We have aimed at a

balanced, assorted, and what we consider an interesting selection

of topics. What is corruption, and how is corruption understood

in various academic Disciplines

.

1.3 OBJECTIVE OF STUDY

The main objective of this paper is to analyze the effects of

corruption on economic growth and development of Kenya in the

context of its economic reform programme since 2000 to date.

Building upon the development trends and the effects of

corruption in various organizations, the general aim of this

study is to provide information on the effects of corruption on

economic growth and development. This will also assist in

8

identifying the gaps which can be addressed through an internal

communication strategy which will support the government strategy

in

Evaluating the corruptions strategies that have been put

in place by the goverment

To determine the extent to which these strategies have been

implemented and challenges facing them

To establish the effect of the corruption strategies on the

performance of the Kenyan economy.

1.4 JUSTIFICATION OF THE STUDY

Corruption is a complex and multifaceted phenomenon with multiple

causes and effects, as it takes on various forms and functions in

different contexts. The phenomenon of corruption ranges from the

single act of a payment contradicted by law to an endemic

malfunction of a political and economic system. The problem of

corruption has been seen either as a structural problem of

politics or economics, or as a cultural and individual moral

problem. The definition of corruption consequently ranges from

the broad terms of “misuse of public power” and “moral decay” to

strict legal definitions of corruption as an act of bribery

involving a public servant and a transfer of tangible resources.

1.5 PROBLEM STATEMENT

Accordingly, the study of corruption has been “multi-

disciplinary” and dispersed, ranging from universal theoretical

modelling to detailed descriptions of single corruption scandals.

9

It has been studied as a problem of political, economic, cultural

or moral underdevelopment, and mostly as something in between.

The complex nature of corruption has made most observes agree

that it pervades many societies and that there are no quick-fix

solutions to it. The “Source Book” of Transparency International does

for instance maintain that public programmes, government

reorganization, law enforcement, public awareness and the

creation of institutions to prevent corruption are nothing but

elements in a long-term process that needs to be supported from

above and below and that also needs attitude changes at all

levels (Pope 1997). Furthermore, it has been noted that

corruption does not disappear as countries develop and modernise,

but rather that corruption takes on new forms (Girling 1997).

This complexity is the background for this “state of the art”

survey on corruption in the recent academic literature. In this

survey we aim to identify the main academic discourses on

corruption, to single out and categorise the current debates on

corruption, and to classify the basic arguments and empirical

view

The principle questions are:

a) The monopoly power of officials.

b) The degree of discretion that officials are permitted to

exercise.

c) The degree to which there are systems of accountability and

transparency in an institution."

10

d) How can corruption in Kenya be eradicated in order to meet

the expectations?

1.6 LIMITATIONS

The research will be limited to Nairobi county key premises

namely the ministry of education, city council of Nairobi,

university of Nairobi, civil society, public . These areas

represent the institutions, ministries, public view in Kenya in

as so far as corruption is concern. Since the above-mentioned

areas reepresents the country, it can be inferred that each

institution experience may differ from employee to employee. The

limitation is that due to the resources available travelling all

over the country would be difficult and yet the key institutions

are all over the country and their views should be basically the

same hence it will be a representative of the peoples view.

11

CHAPTER TWO: LITERATURE REVIEW

2.0. INTRODUCTION

In this chapter a literature overview will mainly deals with the

terms, definitions, concepts and types of corruption. It will

also investigates the variety of causes of corruption and

opportunities that governmental structures create for corruption

in Kenya and in different nations. Leslie Holmes (1993 ) the

causes of corruption divides into three categories, cultural,

psychological, and system-related. And Klitgaard, R. (1998)

brings three dimensions of institutional structure that he

considers most critical in bearing on the opportunities for

corruption.

1.The monopoly power of officials.

2.The degree of discretion that officials are permitted to

exercise.

12

3.The degree to which there are systems of accountability and

transparency in an

institution."

The literature will also examines the effects of corruption on

economic and political development. According to some scholars

some levels of corruption may encourage the economic growth. But

in case of high level of corruption most scholars agree that

corruption has very harmful effects on economic and political

development. High scale corruption reduces the efficiency of

public spending, raise the budget deficit, reduce budget

revenues, dissipate political legitimacy and hinder the

democratic development. corruption as one of the oldest and most

perplexing phenomenon in human society exists in every country.

The classical conception of corruption, as a general disease of

the body politics, was stated by ancient philosophers Plato and

Aristotle. They saw corruption as dysfunctional, which is

destructive of a particular political order, be it monarchy,

aristocracy or democracy. Carl Fredrich defines corruption as a

deviant behavior associated with a particular motivation, namely

that of private gain at public expense. Van kKlavaren see

corruption as the exploitation of the public.

2.1. WHAT IS THE CORRUPTION

As one of the oldest and most perplexing phenomenon in human

society, political corruption exist in every country in the

contemporary world and it is not exclusively a problem of

13

developing countries. The classical concept of corruption as a

general disease of the body politics was stated by ancient

political philosophers Plato and Aristotle. Plato in his theory

of the

"perverted" constitutions-Democracy, oligarchy, and tyranny-

worried that these regimes instead of being guided by the law

were serving the interest of the rulers. "These fundamental

general notions of corruption all practically define corruption

as dysfunctional. For it is seen as destructive of a particular

political order, be it monarchy, aristocracy, or polity, the

latter a constitutionally limited popular rule, and thus by

definition devoid of any function within a political order." This

classic conception of corruption continued into modern times, and

is central

to the political thought of Machiavelli, Montesquieu and Rosseau.

For Machiavelli corruption was process by which the virtue of the

citizen was undermined and eventually destroyed? "Since most men

are weak and lacking in the virtue of the good citizen except

when inspired by a great leader, the process of corruption is

ever threatening. And when virtue has been corrupted, a heroic

leader must appear who in rebuilding the political order infuses

this virtue into the entire citizenry." Arnold Heidenheimer (1993

) Montesquieu saw corruption as the dysfunctional process by

which a good political order is perverted into evil one and a

monarchy into a despotism.

14

According to Rosseau political corruption is a necessary

consequences of the struggle for power. And he argued "that man

had been corrupted by social and political life. It is not the

corruption of man which destroyed the political system but the

political system which corrupts and destroys man." There is an

agreement between the views of Rosseau and Lord Acton that "all

powers tends to corrupt and absolute powers corrupts absolutely."

Lord Acton is focused on the moral depravity which power is

believed to cause in man, "they no longer think about what is

right action or manner, but only about which is expedient action

or manner.

According to Carl Fredrich(1972 ) "Corruption is a kind of

behavior which deviates from the norm actually prevalent or

behaved to prevail in a given context, such as the political. It

is deviant behavior associated with a particular motivation,

namely that of private gain at public expense." So he stated the

concept of corruption in a way that constitutes a break of law or

of standards of high moral conduct.

Jacob Van Klavaren (1954) defines corruption as the exploitation

of the public. And he brought very interesting explanation taking

a public official as an economic subject who, as every economic

subject, tries to miximise his gain or income. Supposing that the

income derived from the free-market agreement with the

functional-economic income. In a system of free competition,

there can be market equilibrium if both sides of the market,

sellers and buyers, are equally strong and two exchange curves

15

intersects. However, if there is a monopolistic condition on one

side of the market, the monopolist will try to get the maximum

profit from the other side. So the income of public official, who

as an economic agent regards his office as a business, "does not

depend on his usefulness for the common good but upon the market

situation and his talent for finding the point of maximal gain on

the public's demand curve." Thus the "corruption is always an

exploitation of the public, which can occur only because the

civil servants occupy a constitutionally independent position

vis-a-vis the public."

There have been a number of different attempts at defining

corruption. However no precise definition can be found which

applies to all forms, types and degrees of corruption, or which

would be acceptable universally. According to Oxford English

Dictionary the term corruption in political context is defined as

“Perversion or favor, the use or existence of corrupt practices,

especially in a state, public corruption.”

One of the most popular definition of corruption was given by

Leslie Palmier (1983, p.207).

According to this definition corruption is seen as the use of public

office for private advantage.

According to Friedrich (1966) the use of public office for

private advantage is not always widely perceived in a given

society to be corrupt. "Particularly if an individual making

personal gain is simultaneously making a positive contribution to

the society-there is no necessary contradiction between private

16

advantages and contributing to the general good-many citizens

will see such actions as at least acceptable and sometimes even

just reward."

Considering the conflict that can arise between an abstract

definition of corruption and its application to a complex real

world some writers have distinguished between what can crudely be

called good, bad and ambiguous corruption. For example,

Katsenelinbogen (1983, p236) identifies two basic types of

corruption.

1. Actions whose harmful effects on society are questionable.

According to Katsenelinbogen, this form of corruption

involves redesigning the system and legalizing the

appropriate actions of people in it.

2. Actions that unambiguously harm society. Such acts should be

treated as corrupt and criminal."

2.2. Forms of corruption

2.2.1. Bribes Bribes are one of the main tools of corruption. The Oxford

English Dictionary defines a bribe as “ a reward given to pervert

the judgment or corrupt the conduct.” A bribe consists of an

offer of money by an outside party to secure desired action from

the governmental officials. Bribes can influence the choice of

17

private parties to supply public goods and services and the exact

terms of those supply contracts.

According to Robert Thobabeen (1991, p.62) buying contracts can

be called also Kickbacks

"when government officials may use their bargaining power with

contractors and their discretion

in awarding contracts to obtain a fee or service charge for

arraigning the contract. A percentage,

usually 5 percent, of the contracts is returned or kicked back to

the public officials by the contractor." According to World Bank

report (1997 p.20) "Bribes can influence the allocation of

monetary benefits (for evasion, subsidies, pensions, or

unemployment insurance.) Bribes can be used to reduce amount of

taxes or other fees collected by government from private parties.

In many countries tax bill is negotiable. Bribes may be demanded

or offered for the issuance of license that conveys an exclusive

right, such as a land development concession or exploitation of a

natural rescores. Sometimes politicians and bureaucrats

deliberately put in place policies that crate control rights,

which they profit from by selling. Bribes can speed up the

government’s granting of permission to carry out legal

activities. Bribes can alter outcomes of the legal and regulatory

process, by inducing the government either to fail to stop

illegal activities or to unduly favor party over another in court

or other legal proceeding."

18

2.2.2. Extortion The abuse or threat of power in such a ways to secure response

in payment of money or other valuable things. Extortion according

to the Oxford English Dictionary "is the act or practice of

extorting (defined as either to wrest or wring from a person,

extract by torture or to obtain from a reluctant person by

violence, torture, intimidation, or abuse of legal or official

authority, or – in a weaker sense by importing, overwhelming

arguments or any powerful influence) or wresting especially

money, from a person by force on by undue exercise of authority

or power."

2.2.3. misuse of public property and funds. Control of property provides opportunities for mismanagement and

corruption. An extreme form is the large-scale “spontaneous”

privatization of state assets by enterprise managers and other

officials in some transition economies. According to Leslie

Holmes (1999, p.5) the process of privatization which is

ultimately implemented by the state provides new opportunities to

state officials. They can demand or request bribes and kickbacks

from private agents interested in purchasing a formerly state-

owned business. At the other end of the scale is petty theft of

items such as office equipment and stationary, vehicles and fuel.

The perpetrators of petty theft are usually middle and lower-

level officials, compensating, in some cases, for inadequate

salaries.

19

2.2.4. Theft of government financial resources is another form of corruption, officials may pocket tax revenues

or fees (often with the collusion of the payer, in effect

combining theft with bribery) steal cash from treasures, extend

advances to themselves that are never repaid, or draw pay for

fictitious “ghost” workers, a pattern well documented in the

reports of audit authorities. For example anglo leasing,

goldenber, lose of one buillion free education funds, much of it

in American foreign aid.

2.2.5 Influence PeddlingWhen individuals with access to people in high places are

sometimes tempted to trade on the influence of high ranking

government officials. "There is money to be made through sale of

access, the arrangement of contracts and timely intervention to

secure favorable disposition of regulatory decisions and

government contract. The use of these kinds of connections for

personal gain is usually described as influence peddling."

2.2.6. Patronage is another form of corruption. The assignment of government

positions to political supporters has long been a practice in

politics especially in Kenya where loyalist are rewarded with

ministerial post, or appointed to influential offices. While

20

civil service regulations at the national and state level may

effectively curtail the number of patronage jobs, political

appointments remain at the top levels of government and provide a

legitimate way for elected politicians to influence bureaucracy

through the appointment of legal executive officials. The process

becomes corrupt

when appointees are expected to pay for their jobs. The custom of

rewarding wealthy campaign

contributors with appointments as ambassadors has been

traditional in presidential politics.

Leslie Holmes (1993, p.205) brings three major forms of

patronage. These are the following.

a) Nepotism In this context "is the granting of public office

on the bases of family ties."This is a good example of a

point where different cultures have very different attitudes

towards some forms of corruption.

b) Shared experience "there the patron and client have usually

worked together in the past and are on good terms and the

patron promotes or has promoted the client on the basis of

these past experience and warm relationship."

c) Shared Interest In this case,"the patron does not have common

experience with someone he she wishes to promote, but rather

a common interest" (for example, they both come from the

same republic and/or are of same ethnic group; they both

21

favor a large increase in defense expenditure in contrast to

what others want, they are of the same gender.)

2.3 CAUSES OF CORRUPTION

2.3.1.Cultural factor

In many countries certain types of corruption are more or less

acceptable often depending on the scale in the traditional

political culture.” Some countries have more of a reputation for

corruption particularly because of traditional attitudes towards

family, kinship, etc. For example Leiken Robert (1997) writes of

the Africa that "In postcolonial Africa, neopatrimonial regimes

become the rule, and the state emerged as an extension of the

ruler's household, patronage, ethnic and kinship ties, and bribes

became major modes of governance. Corruption funded patronage to

Kinsman and crimes have exacerbated regional, tribal, religious,

and ethnic divisions.

The other cultural factor is a weak tradition of the rule of law

and low level of respect for the

law. According to Holmes (1993 p. 159) "several of the African

countries were formerly colonies and "the law" has been seen by

some citizens as theirs' and therefore not respected in the same

way that it might be in a long-established independent country,

such as many western states." Conversely according to West German

specialists in 1986 in GDR corruption was in very low levels,

which can be explained by the German tradition of respect for law

and order. In Kenya also there is evidence that people do not22

trust in or do not respect the law. During the interviews many

tax collectors ensure that, although they are inclined to take

bribes, in most cases taxpayers themselves offer bribes. People

in kenya mainly are inclined to solve their problems with the

help of bribes and not with the help of law. Bribing tax

collectors, traffic police, judges publicly perceived as a way of

life. Holmes (1993) explains this political culture by the

experience under communism. According to Lampert (1984 pp.371-2)

"In the Soviet republics especially in the Transcaucasian

republics a number of influences such as strong family ties, have

led to a systematic disregard of the law." During the post

colonial times in kenya, especially from the 1980s, the bribery

was widespread phenomenon and during some period of time it

becomes a norm that bribes can solve the problems more

efficiently than law. So citizens over time come to see some

types of corruption as normal and beneficial.

According to Banfield (1958) historical tradition might also

affect the perceived costs of

corrupt action through the influence of religion.

2.3.2 psychological factor. There are number of psychological factors that help to explain

some types of corruption. Taking into account the internal

factors of individuals some individuals are "naturally evil" and

will commit criminal acts, including corrupt ones in any type of

system. The external factors, individual's relationship to the

group is also important. According to Holmes (1993, p. 165) “the

23

power of both peer pressure and peer-comparison can be great, for

instance in the words of one artist “when the best of people take

bribes, isn't it the fool who doesn't?” In other words if

individuals see others around them benefiting from corruption,

they may well choose to indulge too.” The psychological factor

may have some role of causing corruption in Armenia. People who

work in a position that can take bribes and don't use their

chance they will be considered by their coworkers as stupid men.

So under the pressure of this factor many public officials during

some period of time become corrupted. But in many cases because

people choose their new job

depending on the scale of opportunity for taking bribes and they

know they should take bribe

because this is the way of life. According to Holmes (1993,

p.170)

“The other psychological factor that is fear also can encourage

people to act corruptly.

For example in a hierarchical situation a subordinate may fear

the consequences of not

acting in a similar way to his/her corrupt superior. This factor

may have some role of causing corruption in kenya. There is some

fixed plan for tax collector and for custom workers in kenya.

2.3.3 Human weakness also may cause corruption. Some people find it difficult to

reject offers from a person of a "generous" nature. Some

officials will accept gifts because they know they have been

24

particularly helpful to someone and either feels they "deserve" a

reward (that is they

feel that a reward is not inappropriate), or else genuinely do

not want to offend or embarrass a

grateful supplicant.

2.4 EFFECTS OF CORRUPTION ON DEVELOPMENT

The purpose of this is to show the impacts that corruption has on

the development of Kenya considering the experiences of other

countries. But before the beginning the discussion I would like

to speak a bit about the question -What is the development? If in

the case of economic development Political development cannot be

defined only by one definition. According to many authors

political development has various definition. For example, it has

been defined as administrative and legal development, democratic

development etc. J.S. Nye (1996) refers the term “political

Development” to the governmental structure and processes to

social change. We generally assume that this means structures and

processes, which are regarded as legitimate by relevant sectors

of the population and effective in producing outputs desired by

relevant sectors of the population. So political development

according to Nye (1996) means growth in the capacity of a

society’s governmental structures and processes to maintain their

legitimacy over time. Although the term “corruption” generally

has a negative connotation, it according to many

25

authors can in some circumstances be a distinctly beneficial

phenomenon. For example Nathaniel Leff's (1964) article “

Economic Development Through Bureaucratic Corruption” is

the most frequently cited source for the argument that

"corruption in the form of bribing can be

an important arm in the hands of entrepreneurs seeking to do

business with a hostile or indifferent government and may, indeed

stimulate the development process." According to Leff

(1964) in many developing countries excessive bureaucratic

control and regulations creates serious uncertainty for

entrepreneurs. So the bribery can help bureaucrats to get around

excessive

regulations and minimize uncertainty over enforcement. Then Leff

see corruption as a auction

mechanism where the most efficient firm will be able to pay the

highest bribe for government

single license or permit. In addition some authors argued that

bribery could enhance efficiency

by cutting the considerable time needed to process permits and

paperwork.

In contrast to this many scholars such as Daniel Kaufmann (1997)

argued that “On closer examination this arguments is full of

holes. First it ignores the enormous degree of discretion that

many politicians and bureaucrats can have, particularly in

corrupt societies.

26

They Have discretion over the creation, proliferation, and

interpretation of conterproductive

regulations. Thus instead of corruption being the grease for the

squeaky wheels of a rigid

administration, it becomes the fuel for excessive and

discretionary regulations. This is one

mechanism whereby corruption feeds on itself.”

According to many authors’ investigations the excessive tolerance

of corruption can have

serious negative effects on economic and political development.

According to John L. Mikesell

(1995 p.65) “Not only is the budget a financial accounting of the

receipts and expenditures of the

government, it also sets forth a plan for allocating resources –

between public and private sectors

and within the public sector – to meet national objectives.

Budget preparation, discussion, and

approvement thus must be at the hearth of public decision

making.” Even in a market economy,

the budget represents the basic national economic plan, the

chosen mix of public and private

sector use of national resources. So in presenting the negative

effects of corruption on economic

and political development I would like to begin from the fact

that corruption tends to shift

27

government spending away from the social areas towards the

construction of unneeded projects

or lower quality investments in infrastructure. In most corrupted

countries, corrupt politicians

tend to choose investment projects not on the bases of their

intrinsic economic worth, but on the

opportunity for bribes and kickbacks these projects presents.

Vito Tanzi (1995) for properly

addressing corruption in public spending makes a distinction

between political or high level and

administrative or bureaucratic corruption. Political corruption

takes place when political

decisions are made about the budget; the administrative

corruption takes place during the budget

execution. Political corruption has particularly damaging effects

on the allocation of resources

because it tends to divert resources away from the function to

which they would have been

allocated in the absence of corruption. Tanzi and Davoodi (1997

p.10) found that "corruption

tends to be associated with higher public investment and high

corruptions tends to reduce

Government revenue, which in its place reduces the resources

available to finance spending,

including public investment." High corruption also tends to be

associated with poor quality of

28

infrastructure, this reduce its contribution to output. Tanzi and

Davoodi's findings shows that large-scale corruption indeed have

powerful effects on both the quality and the quantity of public

investment. Because most current spending by governments reflects

entitlements or previous commitments such as pensions, interest

payments on public debt, salaries, and subsidies politicians

have, in short run limited discretion to influence it. In

contrast, there is nothing

routine about the capital investment and its composition. Capital

spending is highly discretionary. In formulating the capital

investments, senior political figures must make the basic

decisions. These decisions determine the size of the total public

investment budget, the general

composition of that budget, the choice of specific projects and

their geographical location, and

even the design of each project. Senior officials may have

complete discretion over these

decisions especially when a country’s controlling or auditing

institutions are not well developed

and institutional control are weak. For kenya I can say there are

some independent audit

offices such as KPMG, AMIO, Hay Audit, etc. According to the

deputy director of KPMG’s

office in Kenya the auditing institutions are not yet well

developed in kenya. KPMG mainly

29

make an audit in private sector such as banks and in some private

companies. The orders for

audit KPMG mainly receives from the other countries, which have

made investments in kenya

and by the words of deputy director of KPMG they never have made

audit in any governmental

structure. So we can say in kenya audit as an independent

watchdog system for controlling the

public spending and revenue collection doesn’t exist. The

experience with public sector projects

especially in developing countries including kenya is full with

stories about roads that are

pocked and with patholes soon after completion, power plants that

experience regular

reconstruction. So when corrupt politicians influence the

approval of an investment project the rate of return as

calculated by cost-benefit analysis ceases to be the criterion

for project selection. When corruption plays a large role in the

selection of projects, some projects are completed but never

used. Others are so poorly built that they will need continues

repair and their output capacity will disappoint. In these

circumstances, it is not surprising that capital spending often

fails to generate the economic growth.

According to Tanzi (1995) "the widespread corruption in the

investment budget will not only

30

reduce the rate of return to new investment in a country, but

will also affect the rate of return the

country gets from its existing infrastructure." As corruption has

long been around the existing

infrastructure has also been contaminated because past

investments were administered or

distorted by corruption. Moreover, higher spending on capital

projects will reduce the resources

available for other spending. Of other spending categories, one

not protected by entitlements is

operation and maintenance the current public spending required to

keep the existing physical

infrastructure in good working order. Too often, new projects are

undertaken while the existing

infrastructure is left to deteriorate. In cases of extreme

corruption, the physical infrastructure will

need to be rebuilt, thus allowing corrupt officials the

opportunity to extract additional

commissions from new investment projects. So corruption affects

the development by reducing

the efficiency of public investments directed it toward unneeded

projects and during the longterm corruption it distracts the

existing infrastructures which are also very important for

political and economic development.

Corruption not only affects the budget investments but also

reduces the budget revenues,

31

which is very crucial for further development. As we know

corruption can lead to tax evasion

and poor tax administration. In many cases tax collections is

much lower than estimated tax

bases. Tax evasion takes place when taxpayers manipulate their

accounts or their declarations to

reduce their tax payments. However some tax evasions exist

because of corruption. In Armenia

there are cases that businessmen pay bribes to senior tax or

custom officials, to secure a formal

certificate of exemption from tax duty. Sometimes businessmen

just pay bribes to low level

officials to secure the same treatment. According to CSDU’s

survey nearly 69 percent of the

respondents agree that tax collectors are largely corrupted.

(See, Chart IV) Some high ranking

officials may through the effecting on tax and custom officials

create favorable tax policies for

their relatives, friends and also for their own businesses. Which

promotes creation of monopolies

and oligopolies, hinder competition and undermine the image of

the government as a facilitator

of private sector growth. For example one of big shareholders of

the oil imported company

"Kemon" is the relative of the former prime minister Hrand

Bagradyan and the Other big

32

shareholder is the deputy of NA (03.12.1999, Azg) And according

to the vice minister of the

State Revenues the consumed amount of oil is not corresponding

with the presented data in tax

reports of oil companies. So there was imported a huge amount of

oil in shadow ways, which are

not taxed because of the support of powerful politicians costing

the country large amounts in

forgone revenue.

Thus corrupt practices in tax and custom administration do great

damage to the revenue collection. If we take that nearly 87

percent of the State Budget is coming from the tax revenues the

corruption will have deadly impact on political and economic

development.

The other effect of reduced revenue is the budget deficit.

Corruption reduces State revenues,

which in its place raise the budget deficit. According to

Miksell(1995 )

“The effects of continuing large budget deficits are expected to

be largely long term. First

international capital market effects promise to reduce standards

of living. Second federal

deficits threaten long-term economic growth in the national

saving may be used to finance

investment or accommodate government deficits. Given the overall

saving rate, the deficits

33

absorbs savings that otherwise could have been productively

invested.

Third continuing large deficits leaving higher interest

obligations in the future. That means

each succeeding congress will find a large usually increasing

share of federal resources to be

already committed, not to provide services to those paying taxes

in that year but to cover

interest or funds spent to provide service in the past.”

Finally, to the extent the deficit remains a political issue it

constrains the capacity of the

federal government to respond to legitimate national concerns. In

a deficit dominated climate,

the first reaction to any policy initiative, whether it is

national healthcare reform, welfare

reform is not whether a problem exists that the federal

government might try to resolve but

what the deficit impact of the response might be.”

Another factor hampering growth and contributing to the expansion

of the shadow economy

is the bureaucratic red tape. Interactions by business with the

kenya Government can be

frustrating and lengthy. For example 67 percent of a sample firms

in kenya report that their

management currently devote over 15 percent of their time to

delay with the government. This is

34

over seven times the incidence reported for Organization for

Economic Cooperation and

Development (OECD), more than twice in Central and East European

Countries And also from the results of survey of foreign

investors reveal that the red tape and corruption in Kenya today

by 78.2 percent of respondents is considered a main factor

inhibiting business activity in Kenya. Further 87 percent of

current investors agreed that 'Business frequently have to pay

some irregular “additional or facilitator” payment to get things

done. And 90 percent of the investors agreed that successful

business in Kenya is frequently based on relationship with

powerful/economic groups in the country. The experts' opinion

fully coincides with current investor's opinion.

Moreover, Government experts are more insistent on this point

than non-government experts. Thus the factors such as poor tax

administration, bureaucratic red tape contribute to the expansion

of shadow economy in kenya. According to the report of Interparty

Social-Economic Council the tax system is the legal labyrinth for

businesses which is the main reason that some of them leave the

country or go underground. In kenya about the shadow economy

there are many different data. Some high-ranking officials

witnessed 40-60 percent, which means that in Kenya half of the

real amount of money circulation is not taxed. According to

interviews with tax officials the large part of the “shadow

economy” in reality pay taxes which do not go to the pocket of

35

the State but becomes fashionable houses or luxury cars for many

public officials.

The prevalence of corruption arguably influences on the economic

environment through the

creation of significantly higher levels of risk and uncertainty

in economic transactions.

Uncertainty is present both in the context of individual economic

transactions and in terms of

heightened fears about future developments in the broader

economic environment in question.

For business it is difficult to flourish in uncertain

environment. Uncertainty with regard to

domestic politics can reduce incentive for investment directly

and through its impacts on

government institutions. The appropriateness of these changes is

not questioned. But an inevitable result of change is

uncertainty, which discourages investment and may result in

inconsistent performance of governmental institutions.

These impacts are likely to be severe if changes of top officials

are rapid and widespread

throughout the organization and if unsystematic. Interviews with

various experts, both in and out

of government indicate that changes in top officials of a

ministry or agency typically result in

widespread changes throughout the entire organization. These

changes are frequently based

36

primarily on political considerations, rather than knowledge or

skills. Small entrepreneurs may

be affected in many developing countries and transition

economies. Evidence from private

sector assessments suggests that corruption increase the costs of

doing business that small firms

bear a disproportionately large share of these costs and that

bribes can prevent firm from

growing. Many businesses prefer to operate underground shutout

the administrative approval

processes by paying bribes because the regulatory and

administrative requirements of starting

and operating business involve extra documentation and fees. For

example the process of

registering can take months because registrations need to be

obtained in a prescribed sequence,

such that one cannot initiate all procedures simultaneously. So

the costs of corruption and

bureaucratic delays may price some potential new businesses out

of market or drive them

underground. Similarly the costs of compliance affect existing

businesses through changing

requirements, the need for regular recertification, and onerous

record keeping requirements.

So uncertain environment, big bureaucratic red tape, and poor

tax and custom administration reduce not only domestic

37

investments but also Foreign Direct Investments (FDI) which is

very crucial factor for economic development for any country.

According to World Bank report the total investment in Kenya

equals 8.8 percent of GDP among the lowest in the Former Soviet

Union (FSU) and Eastern Europe. And also FDI are in very low

level.

Corruption can affect on human capital formation, which is the

most important input in the

process of production and transformation that is called economic

development. First corruption

weakens tax administration and can lead to tax evasion and

improper tax exemptions as

discussed above. Therefore, for a given tax system, the higher

the level of corruption, the lower

the revenue and the lower the resources available for funding

public provision of certain service,

including education. Second corruption increase the operating

cost of government and therefore

reduces the resources available for other uses, including the

financing of social spending that is

crucial to the formation of human capital. In fact, higher

corruption is found to be associated

with lower education and health spending. According to

quantitative analysis made by Mauro

Paolo (1997) government expenditure on education is negatively

and significantly associated

38

with higher levels of corruption. Corruption also will likely

decrease the effectiveness of aid

flows, which could have negative effects on the development. For

Kenya the only fact that

from the 382 million dollar received loans 152,51 was actual loss

to the State from which 90

million was embezzled. So 152 million stayed as a debt on the

shoulders of the future generations, which will be significant

obstacle for further economic development.

Capital outflow also may have negative effect on the development.

Capital accumulated by

corruption that winds up in Swiss banks is a net loss for the

developing country. These costs can

be considerable.

Corruption may dissipate the important asset of political

legitimacy, which most governments

seek to preserve and build on. One of the major tasks of any

regime is the building of its own

legitimacy a resource which will enable it to gain more easily

the support and the assistance of

the public in connection with development. By destroying the

legitimacy of political structure in

the eyes of those who have power to do something about the

situation; corruption can contribute

to instability and possible national disintegration.

39

According to Theodor M. Smith (1971) “Corruption may tend to

destroy some of a new nation’s greatest potential assets, the

enthusiasm, idealism and sympathy of its youth. In the event that

the idealism and enthusiasm of the younger generation turns to

cynicism, not only political stability but long run economic

development efforts are bound to be affected.” Politicians and

civil servants as an elite should give purpose to national

effort. In so doing they cannot avoid setting an example others

will follow. If the elite is believed to be widely and thoroughly

corrupt, the man-in-the street will see little reason why he too

should not gather what he can for himself and his loved ones. So

corruption among an elite not only debases standards popularly

perceived, it forces people to undertake the underhanded approach

out of self-defence.

They feel they must resort to corrupt practices just to get their

due, not to secure in ordinate

returns. Corruption causes decisions to be weighted in terms of

money, not in terms of human

need. David H. Bayley(1966) And more important that corruption

may threaten the democratic development. People may existing poor

socials-economic conditions and widespread corruption link with

the process of democratization. Which in turn creates serious

obstacles for further democratization? Thus as we have seen high

and rising corruption by effecting on the effectiveness of social

spending; eroding the tax and custom administrations; and

40

destroying the legitimacy of existing political system may effect

very negatively on the political and economic development

2.5 Conceptual Framework.

Independent variables

Dependent variables

41

Corruption

Forms of corruption

Causes of corruption

Development of the economy

Chapter three: RESEARCH METHODOLOGY

3.0. INTRODUCTION

This chapter will provide an overview and discussion of the

methods and techniques employed to collect the research data. It

will focus on the suitability of responses to the four questions

The principle questions are:

a) The monopoly power of officials.

42

Effects of corruption in

b) The degree of discretion that officials are permitted to

exercise.

c) The degree to which there are systems of accountability and

transparency in an institution."

d) How can corruption in Kenya be eradicated in order to meet

the expectations?

3.1 RESEARCH PARADIGM

WHY A QUALITATIVE RESEARCH METHOD

The qualitative research paradigm was used so that the study

could be done at the key institutions namely ministry of

education, university of Nairobi, city council of Nairobi

settings where employees are at their workplace and where the

communication flow occurs. The qualitative approach was most

suitable for explaining the participant’s perceptions. Creswell

(2003:191) also agrees that the objective of qualitative research

is to understand a particular social situation, event, role,

group or interaction. Consequently, qualitative research is

utilized to analyze the organizational structures of institutions

in order to gain an understanding of the process and its

Shortcoming.

The qualitative method is flexible in so far as interviewing and

how to frame questions. For instance I situations where question

is no relevant to the person or institution. Furthermore, the

researcher could look at the environment, the verbal and

nonverbal interpretations. Creswell (2003:181) believes that the

43

more complex interactive and encompassing the narrative, the

better the qualitative study. Objectivity is seen as a challenge

in the qualitative method.

The analytical approach was used to conduct this research because

it goes beyond describing the characteristics to analyze and

explain why or how corruption takes place in Kenya. In different

levels . In this research , the focus is on analyzing and

explaining how and why corruption takes place any how to

eradicate it.

The people who responded to this survey some were employed

while other were not employed. The interviews were conducted

via a face-to-face approach. In total, 360 copies of survey

forms were being distributed to respondents using systematic

sampling. Out of 360 copies of survey forms, 270 were used in

this research. However, 90 of them were discarded due to

missing information in the survey forms and some not answered

properly.

The variables used in this study were chosen and selected with

slight modifications from several studies of Montgomery et al.

(1996), Beehr and Newman (1978), Zohar (1997) and MacKay et al.

(2004). were scored on a five-point scale ranging from 1 for“strongly disagree”, 2 for “disagree”, 3 for “neutral”, 4 for“agree” and 5 for “strongly agree”.

The factor analysis has been concerned with data deduction and

identification of various constructs of corruption in Kenya and

44

how it affects the economic growth and a countries work

performance. Results that were obtained from the analysis

subsequently led to the construction of various composite

indices, representing various aspects of organization structural

level, and work performance. All the variables which have been

identified as having the same underlying pattern were grouped

together to construct an index.

3.2 STUDY AREA

This study was conducted in Nairobi City, capital of kenya. I

selected this city for two main reasons. Firstly, the city is a

commercial centre and is the capital city of one of the most

ethnically heterogeneous city in kenya. It is therefore, one of

the cities reflecting the multi- ethnicity, commercial,

employment, communication nature of kenya. Almost all the major

ethnic groups in Kenya are also found in the city of nairobi,of

which many of the institutions, government offices, public

servants, civil servants, unemployed people are found in Nairobi

city. That the city is representative of the corrupt diversity of

Kenya therefore intuitively appealing and it is expected that

our findings would naturally apply to the generality of the

population of interest (all Kenyans view of corruption).

Secondly, the city is home to numerous corrupt dealings in

government offices, private sectors, commercial centers,

institutions etc in Kenya. after which 360 questionnaires was

45

administered to three hundred and sixty respondents. In the

various government, private, public institutions in Nairobi.

3.3 STUDY POPULATION

The study population comprise five key institutions mentioned

earlier in the study in the study in the institutions all of

them some were employees and some were unemployed.

3.4 SAMPLE SIZE

The study population comprised of 360 respondents (target

population) was drawn among the Nairobi residence some were

employed while other were not employed.the sample were

categorized according to the different strata,entative,

The disadvantage of stratified sampling is that its application

requires time and effort to divide the population into different

strata especially when it is a large sample. It is also difficult

when the different stratum is made up of subgroups. Stratified

sampling requires proper knowledge of the different strata and

subgroups so that they can be selected accordingly. a

representative or good sample is one in which the results

obtained for the sample can be taken to be true for the wide

population because it is easier to generalize. Stratified random

sampling overcomes this problem as each identifiable strata of

the population is taken into account. For the purpose of this

study, shift patterns were taken into consideration to ensure

availability of the participants.

46

3.5 DATA COLLECTION MATERIAL

3.5.1 INTERVIEWS

Data was collected via interviews which were conducted through

focus groups. From 360 employees Creswell (2003:188) writes that

in interviews, the researcher conducts face to face interviews

with participants or engages in focus groups. Groups consisting

of seventy two participarts in every institution

The interviews comprised of structured questions which were meant

to solicit participants opinion on corruption. The interviews

lasted ten minutes on average.. Open ended questions were used

with the objective of allowing participants to respond freely.

Control over the responses were ensured through the guidance of

the facilitator.

3.5.2 FOCUS GROUPS

A focus group is a group of people who are selected from the

larger population to enter into a facilitated discussion on

certain questions. According to Du Plooy (2002:178), focus groups

have become popular in recent years because it provides data that

is rich in ideas and supplies opinions and attitudes from the

subject point of view. Du Plooy (2002:178) supports the

combination of data collection tools by saying, “depending on the

47

objective of the research, focus group interviews can be combined

with in-depth interviews, observations, surveys and even

experimental design”. Focus groups are used to resolve problems

in organizational communication. It also provides an opportunity

to those who are illiterate or do not understand the

question.Krueger (1994:6) states that a focus group is a special

type of group in terms of purpose, size, composition and

procedures. It is composed of seven to ten participants who are

selected because they have certain characteristics in common that

relate to the topic of the focus group.

A focus group was selected from amongst the participants who

share common characteristics relevant to the study.

The focus group interview approach was chosen for this study

because they are cost effective and participants perceive the

group as a social unit which shares the same experiences. Krueger

(1994:10) also believes that interviews are effective because

they tap into human tendencies. As a product of an environment,

people are influenced by people around them. Other people’s

opinions can be listened to and shared in a focus group setting

than in an individual setting. The format allows the facilitator

to probe for more information and seek clarity when it is

unclear. It has high face validity because the technique is

easily understood and the results seem believable to those using

the information. According to Krueger (1994:16), the six

characteristics of focus groups relate to people assembled in a

48

series of groups who posses certain characteristics and provide

data of a qualitative nature in a focused discussion.

3.6 ETHICAL CONSIDERATION

An individual interview was carried out with the participants who

voluntarily accepted to participate in the study to ascertain

privacy and confidentiality.Creswell (2003:201) believes that ethical consideration should

include the researcher’s obligation to respect the rights, needs,

values and desires of respondents. The participants at the study

were informed that their responses will be treated with

anonymity.

3.7 DATA RELIABILITY AND COLLECTION

Collis and Hussey (2003:186), reliability is concerned with the

findings of the research. The findings can be considered reliable

if (you or anyone else) repeated the research and obtain similar

results. Whilst validity is concerned with the extent to which

the research findings accurately represent what is happening in

the situation, the data collected can also be perceived as a true

picture of what is being studied. The challenge with the

positivist view is that the data might not reveal what it

intended to draw due to various reasons such as ambiguous

questions and respondents being bored. The questions were made

simple and clear. Participants were kept active through debate

and discussions. An effect or a test is valid if it demonstrates

49

or measures what the researcher thinks or claims it does. Collis

& Hussey (2003:58) state that research errors such as faulty

research procedures, poor samples and inaccurate or misleading

measurements can undermine validity. Creswell (2003:196) suggests

that the use of an external auditor to review the entire project

can be used as a strategy to check the accuracy of the study.

In critically analyzing corruption in Kenya the validity was

ensured by following the questions and procedures correctly.

there are various ways to address the challenge of validity, that

is, the most common is face validity which involves ensuring

tests and measures used by the researcher do actually measure or

represent what they are supposed to measure or represent.

Although the researcher’s judgment might be seen as biased, the

independent facilitator may be seen as objective.

3.8 DATA ANALYSIS

The data analysis process was designed to draw logical references

from the text or image data collected. Creswell (2003:191)

believes that there are various generic steps involved in data

analysis which involves organizing and preparing the data for

analysis, reading through all the data and putting it into

categories. The process generates description of the setting or

themes/ categories of people for analysis. The final step

involves drawing inferences or interpretation of the data where

it captures the lessons learnt.

50

The data analysis for the research on corruption in kenya

followed the above mentioned. Firstly, the data was organized and

prepared by recording the focus group notes and sorting out the

questionnaires according to different strata. Secondly, all the

data had to be read to get a general sense of the information and

compile notes on the general thoughts. The third step involved

commencing with a detailed analysis of the categorization

process. The information was categorized into different themes

and patterns from the various group’s responses. The fourth step

was to use the categorized data to generate a description of the

setting, giving themes to the different strata. Fifthly, a

decision was taken on how the description and themes will be

presented, that is, a narrative passage to convey the findings of

the analysis. Finally, the sixth step involved interpretation of

the data, feedback regarding cooruption in the institutions.

51

CHAPTER FOUR; RESEARCH FINDINGS

4.0 RESULTS / FINDINGS

Figure 1shows that most of the respondents were aged between 20 –

29 yrs represented by 67% while teenage participants (15 – 19

years) represented 3%. Those aged between 30 – 34 years were also

15% and only 15% were aged between 35 – 39 years. No respondents

were aged above 40 years. The bar chart below illustrates this:-

52

Figure 1: Age of the respondents

Figure 2 shows that majority of the respondents were married

represented by 82% while 15% were single. Only 3% were divorced

and there were no widows. Below is the illustration of the same:-

Figure 2: Marital Status of respondents

53

Figure 3 indicates that 55% of the respondents had at least

attained primary education with 30% having attained secondary

education, 15 % tertiary education while none was illiterate as

shown below:-

Figure 3: Level of education

Figure 4 shows that 45% of the respondents were employed with 10%

of them being in the private sector and 5% civil servants. Those

who were self employed were 30%. The remaining 55% were

unemployed as shown in the pie chart below:-

54

Figure 4: Occupation of the respondents

Figure 5 shows that 85% of respondents had knowledge about

corruption while 15% had no idea. Of those who knew about the

effects of corruption, 73% have participated in corruption in

work place, 15% in other places, 9% for family and 3% from other

things.

Figure 5: Knowledge of corruption

4.1. FACTOR ANALYSIS

55

As mentioned earlier, factor analysis was performed to test whether

the variables represent their hypothesized components, as reflected

in high loadings on the corresponding component, and do not confound

the multiple components, as reflected in low cross-loadings. .

Analysis based on item-to total effects of corruption in development.

4.2. CONCEPTUAL ANALYSIS

The following section exhibited the regression results of

corruption in Kenya in the various institutions in the republic of

Kenya.

The results obtained from the percentage analysis showed that

corruption is high in Kenya and a lot of people know about it as 85

% of people have the knowledge about it and 73% have in one way or

the other participated in it also the table also show that a

majority of Kenyans are unemployed and these unemployment has

mostly been brought about by corruption since there are some people

who are in positions which they have not qualified to be in but

because they bribe them selves in they are employed.

A majority of people who feel that corruption has have a high

effect on the economy are aged between 20- 29 who stood at 67%

and those who are not so much affected by the effects were the

teenagers who stood at 3% since most of them depend on their

parents for support

As per the findings most people have gone through primary and

secondary and a few through tertiary education hence these gap in

education level has created a lot of leeway for corruption to

56

take place since most senior employees or employers threaten

those who are junior when they participate in corrupt deals and

they are noted also another problem that has increased the high

level of corruption is unemployment which stands at 55% due to

poor infrustrucre development which has been caused by leaders

who embezzled public funds meant for development purposes

CHAPTER FIVE : CONCLUSION AND RECOMMENDATIONS

5.0 CONCLUSION

There is a clear-cut correlation between corruption and economic

growth, and if stringent measure is not taken about it, the

development of the affected country would be impaired.

Corrupt regimes always yield disastrous results. Corruption which

is equal to monopoly plus discretion, minus accountability has

serious impediment to sustainable development especially in

developing countries. It has stolen the wealth of resource-rich

nations like Kenya thereby making people to be trapped in

poverty. Even while thinking of some firms/people as if better

off through payment of a bribe by most people, the overall effect

of corruption on economic development still remains negative. The

57

more corrupt a country is, the slower it economic growth rate.

Corruption is a stigma that destroys the reputation of affected

country. It lowers investment thereby lowering economic growth of

the country.

Despite the existing challenges facing Kenya after the

establishment of the anti-graft institutions by the government,

the reforms have yielded some concrete results with a reduction

of corruption levels when compared with the pre-reform periods

when Criminal Code and Code of conduct Bureau were used to check

corrupt practices on public office holders only. It is in the

rules and practices of governance that the foundations of

sustainable development are shaped or undermined. The very basis

of development becomes compromised when these rules and practices

are not effectively monitored and applied. Development suffers

where the rules of governance allow arbitrary resource

allocations and the diversion of public resources in defiance of

the public good and to the exclusive benefit of corrupt

officials, politicians and their collaborators.

5.1 RECOMMENDATIONS

Every country has to determine it own priorities on the war

against corruption. To tame the surge of corruption in Kenya as

Dike 1999 and 2002 pointed out, the general population should be

reorientated to a better value system. This is because kenyans

have for long been living on the58

survival of the fittest and grab-whatever-comes-your-way

mentality. The re-orientation of the

youth in kenya to a good value system could help in the war

against corruption. There is the need for enlightenment in

discouraging excessive materialism and the culture of ‘get rich

quick’, employment for the teeming youths and incorporation of

human rights and development perspectives into anti-corruption

work.

In order for Kenya to successfully combat corruption, there is

the need for a mechanism that will transform dramatically the

culture and legacy of corruption. Positive transformation of

Kenya can only occur through addressing the root causes of

corruption and through effectively implementing the legal

mechanisms already in place. Kenya has introduced economic

reforms

through privatization, deregulation, removal of market

restrictions, and civil service reform with

the aim at promoting the integrity of public service. These

measures are all very important in the

fight against corruption, but the key factor to galvanize and

orchestrate these measures is having

honest leaders with the political will to tackle corruption.

Provision of appropriate punishment for corruption in and of

itself is not sufficient to eliminate Corruption. The phenomenon

of corruption has multiple causes, and is determined by more than

just seeing people go unpunished for engaging in corrupt

59

behavior. It is recommended that in addition to other measures

being taken to reduce corruption, the leadership must demonstrate

the willingness to track and punish corrupt officials and

citizens as well as create a conducive economic climate that

would raise the standard of living of the citizenry.

Programs such as social safetynet should be instituted among the

non-working class in order to

reduce the worry about basic survival in the face of growing

insecurity about the job situation.

Finally, there is the need for the provision of adequate

resources anti-corruption agencies and

non-interference of government on the mandate given to the anti –

corruption agencies so as to

make them effective. Unless the government is willing to commit

adequate resources to fund and

operate the agencies, and making them truly independent, the

anti-corruption might not be able

to withstand the opposing forces of the corrupt elements in the

country.

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