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The Kenyan National Treasury: A ‘pocket of effectiveness’ curtailed

Working paper 150

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Matthew Tyce
This paper examines the factors that have shaped the ability of Kenya’s National Treasury (Ministry of Finance) to deliver on its mandate since the early 1990s. It identifies a key role for Kenya’s competitive and fragmented political settlement, which generates strong incentives for ruling elites to constrain the Treasury’s bureaucratic autonomy and decision-making, especially during election periods. The Treasury has, therefore, generally been curtailed in its ability to function as a pocket of effectiveness (POE) throughout the period of analysis. That said, the organisation did more closely resemble a POE (albeit a fragile and progressively weakening one) from around 2003, when a shared set of ideas motivated then-President Mwai Kibaki and a small circle of trusted ‘technopols’ to try and shield the Treasury – or at least some of its core functions and departments – from the more corrosive and short-termist pressures generated by Kenya’s political settlement. This gave the Treasury sufficient autonomy – not just from domestic politics, but also from external donor advice – to design and implement heterodox economic policies that responded to the specificities of the Kenyan context and contributed to a period of relatively impressive macroeconomic performance, especially between 2003 and 2007 (though benign global conditions certainly also played a role). These findings, the paper argues, show that there is significant space for policy coalitions composed of small numbers of like-minded politicians and technocrats (who are able draw selectively from, but are not beholden to, the advice and support of donors and other transnational actors) to exercise their agency and secure developmental outcomes within the structures of power that characterise a country’s political settlement.