EQUITY NOT EQUALITY COUNTS
Politically, sharing resources equally is often popular, but not truly equal. It rarely can address the specific development problems we are trying to solve and may exacerbate inequalities
Few things in life can be predicted with certainty. But among those that are seemingly permanent are the standoffs between governors and their county assemblies over the budget. Often the bone of contention is related to ward development funds and is resolved when governors agree to allocate some portion of the budget to be shared equally across the wards.
Unfortunately, this pattern of equal sharing is not just a solution to political challenges, it also appears to infuse many of our public policies. Over the past year, IBP Kenya has analysed Kenya’s approach to distributing resources in national programmes, and across and within the counties. We found a surprisingly heavy weight given to apparent equality rather than genuine equity. Equality is a laudable goal of public policy, but treating everyone equally can exacerbate inequalities where individuals or regions are very unequal to begin with.
The CDF is a good starting point. Three-quarters of the money is shared equally among the 290 constituencies, while the remaining is distributed based on each constituency’s share of all of the country’s poor people.
The CDF is meant to address poverty through funding for development (mainly capital) projects. Distributing the majority of funds equally across constituencies with different populations and massive disparities in poverty is on its face inequitable, and the figures show that the per capita allocations to different constituencies bear this out.
For example, while Mandera South has the highest number of poor people, it receives the lowest per capita allocation. Using the current CDF criteria, Lamu East, with the fewest poor people in Kenya, received Sh19,758 per poor person in 2015-16, more than 20 times the per capita allocation to Mandera South. What justification is there for such disparities in funding?
We move to the Equalisation Fund, which is meant to address service gaps in “marginalised areas”. The Commission on Revenue Allocation chose 14 counties to benefit from the fund (leaving out marginalised areas in the other 33 counties), and then proceeded to distribute half of the fund equally among them. Is this equitable? Even among the marginalised counties selected by the CRA, there are wide disparities in access to services. Consider health infrastructure. Mandera has one health facility for every 17,875 people compared to Samburu, with one facility for every 3,902 people. A high equal share ignores these inequalities.
What happens when money gets to the counties? How is it distributed at the subcounty level? Many counties have tried to establish Ward Development Funds, inspired by the CDF. A number follow the CDF’s distributional approach: A high equal share and a smaller share allocated “equitably”. Baringo and Meru have taken this approach, where 85 per cent of the funds are shared equally while a much smaller share is distributed based on population (Baringo) or population size, infrastructure and poverty (Meru).
On the other hand, Elgeyo Marakwet has taken a different approach, adopting a formula that closely resembles that of the CRA. Even here, though, “equality” appears to dominate equity, as 60 per cent of the development funds are shared equally among the wards, while only 40 per cent is shared equitably. Looking at inequalities across its wards, this approach leaves wards with the worst access, too little relative to better-off wards to be able to close the gap.
Other countries put less emphasis on equal sharing of revenue. India’s formula takes into account parameters similar to Kenya’s, like population and land area, but does not have a component that distributes revenue equally among the states. The South African formula includes an equal share for provinces, but this only accounts for five per cent of the formula.
Politically, sharing resources equally is often popular, reflecting a prevailing view that we are “all” marginalised and deserve a piece of the pie. However, sharing equally at the county or ward level is often not truly equal, as population differences mean that equal shares are not equal at all on a per person basis. Moreover, equal shares rarely can address the specific development problems we are trying to solve and may exacerbate inequalities.