Despite having a substantial public budget, Kenya does not have enough funds to do everything its citizens would like. In that respect, Kenya is no different from any other country, rich or poor: It has to prioritise between many worthy opportunities.
In every country, the main role of the government and Parliament is to prioritise policy options and investments. Hopefully, these policies will be the ones that deliver the greatest benefit for each shilling spent. These could be enormously effective investments in health such as rotavirus vaccinations, or in education such as structured teacher plans.
However, as everywhere else in the world, policies are often driven by other considerations that can dramatically reduce effectiveness. This could be driven by special interest groups and vocal minorities highlighting their preferred options. For instance, subsidies of fertiliser definitely help the individual farmer, but overall, such a policy delivers only small returns for society.
And the media will often push exciting interventions, even if their returns are dubious. For instance, giving each child a cheap laptop was long seen as an exciting and crucial pathway to educate children in the 21st century. Now, studies conclusively show that not only is this an expensive option, but also one that delivers zero benefits – actually the children possibly become slightly less attentive.
Data and economic science can provide a really useful input to help the government and citizens to cut through the noise from interest groups, and assist with the allocation of resources to improve the budgeting process.
Cost-benefit analysis – an approach that uses rigorous, cross-sectoral economic analysis to establish what could be achieved by spending additional money in different areas – is rarely used by any government in the world in a broad, transparent fashion. Why? It requires large numbers of academics, well-organised inputs and the collection of considerable data, and it creates analytical results that can upset some vested interest groups.
The Copenhagen Consensus Center has been working for the past decade to improve this situation. We have worked in Denmark, Bangladesh, Haiti, India, Ghana and Malawi to introduce a rational, data-driven input to countries’ priority-setting.
These projects have helped state and national governments to zero in on the most powerful investments. In India, we collaborated with Tata Trusts, the nation’s oldest philanthropy, while in Bangladesh we worked with BRAC, the world’s biggest NGO. These local inputs make sure that the policies examined are the most relevant to each country. We are now undertaking a project for the Bill & Melinda Gates Foundation to investigate how nations can best spend resources within the conversation of the so-called Sustainable Development Goals.
What could such an investigation achieve for Kenya? The country has huge opportunities ahead – but also challenges which could impact prosperity if not navigated carefully.
A rapid assessment we just undertook for Uganda points to the types of research that could help Kenya. We worked with Uganda’s National Planning Authority to examine each of the interventions suggested in the new Uganda Budget Strategy, undertaking a rapid assessment to quickly evaluate the costs and benefits of each initiative, based on the academic literature.
This report highlighted the vast benefits of opening schools unconditionally and keeping them open to improve future earnings for Ugandan children. The research also showed the huge benefits from prioritising healthcare spending on specific communicable diseases like malaria and tuberculosis. Among all the competing claims on the healthcare budget, there is huge value in focusing any additional resources on these areas, where relatively tiny investments can generate vast results.
Kenya should consider embracing the same opportunity. Let us bring together Kenyan and international academics to start mapping out what really works and highlight where the next shilling can be spent best.
Dr Lomborg is President of the Copenhagen Consensus and Visiting Fellow at Stanford University’s Hoover Institution.