SOCIAL POLICY, DEVELOPMENT AND

GOVERNANCE IN KENYA

Class Formation and Inequality in Kenya

Developing World
 THIRD WORLD
❖ The term third world arose during the Cold War

❖ Third world did not always mean “the underdeveloped or developed world”

❖ The third world countries actually represented the non-aligned countries during the cold war. The
2nd world represented the Soviet Union and its allies.

❖ So since the three “worlds” do not exist, why do we still use the term?
✓ Habit and simplification of the world.

❖ Although an incorrect usage, the term “Third World” is now used to represent the poorest
countries in the world.

❖ Scholars today prefer to use the terms :

✓ Developing World,
✓ Global South,
✓ Least/Lesser Developed countries
❖ What is politics ?
✓ The means by which a society organizes its affairs

❖ What is government ?
✓ institutions and processes employed by societies to organize their affairs

❖ What is culture?
✓ A set of traditions, beliefs, and behaviors that a people express and hold

❖ What is political culture ?

✓ Traditions, values, beliefs, attitudes that relate to politics and governance.

❖ What is a State ?
I. A legal and political unit that must be
II. Internationally recognized,
III. Politically organized and
IV. have a Geographic area that
V. posses Sovereignty

❖ What is a Nation?
✓ A group of people who identify as a political community based upon common territory, culture and other bonds.
 Sum-----
➢ Prior to colonization most African societies were ‘kinship-based’ valuing social harmony over wealth and status
➢ Politics and conflict in Kenya revolve around two key issues;
✓ competition/control over productive land and
✓ ethnic/regional opportunities for economic rent.
➢ Thus historically,
✓ issues of economic inequality have centered on access to agricultural land and
✓ control of the state, the means by which the dominating elite can create economic rent.
❖ Economic inequality can influence the development of institutions and institutions can influence the development of
inequality.
❖ It is implicitly understood by voters that whichever ethnic alliance succeeds will deliver economic dividends to its
regional/ethnic base and whichever loses will be frozen out
❖ Colonization introduced completely new perspectives on land use to Africans. In particular it introduced the concept of
individual ownership of land and thus the permanent exclusion of others from its use.
❖ In effect this began the process of economic stratification based on control of the ‘means of production’ i.e. class
formation which for an agricultural economy boils down to land. Although a gradual process, the colonizers initiated a
system of land consolidation through the use of state power (often arbitrarily) to the benefit of white settlers.
❖ The process of class formation is a by-product as well as a motor of the politically motivated redistribution of
economic opportunities to favored groups.
✓ Thus economic policy has purposefully created widespread economic inequality,
▪ creating a situation where the competition for political power is the key to economic advancement
➢Social policy is state intervention that directly affects social welfare, social institutions
and social relations.
✓ It involves overarching concern with redistribution, production, reproduction and
protection, and works in tandem with economic policy in pursuit of national social and
economic goals.
✓It should be stressed that social policy does not merely deal with the “causalities” of social
change and processes but also contributes to the welfare of society as a whole.
➢Social policy may be embedded in economic policy explicitly aimed at direct government
provision of social welfare, in part through broad-based social services and subsidies,
provision of
✓Education and Health Services,
✓Social security and Pensions,
✓Land reform.
➢Such policies can only take place within a political framework of real participatory
democracy and good governance at both the national and local level.
➢A few African countries had attempted the beginnings of such comprehensive social
policies in the 1960s early 1970s, but have since been forced to abandon such
development strategies of social development in favor of narrow strategy of economic
growth.
➢Kenya Government approach to social policy is sectoral and is de-linked from its
economic growth strategy. This is in spite of Government claim to the contrary.
➢All indications are to the contrary - economic growth has increased poverty and widened
inequality - while social policy has deepened poverty
➢The non-state actors - NGOs/CSOs and the Private Sector – play a useful role in providing
some services which are complimentary to those provided by the Government. But again
this contribution is not linked to economic growth strategy but is made with the aim of
ameliorating the scarcity of services in both rural and urban areas.
➢The NGOs/CSOs play a bigger role than the private sector, which have only recently
started contributing what it calls its “social responsibility”.
✓Economic inequality can influence the development of institutions and
institutions can influence the development of inequality.

✓These institutions in turn determine public policy, which, because of the

centrality of the state in the development process determine the long term
trajectory of social and economic development

✓This in a nutshell, is the hypothesis underlying the argument that economic

inequality in Kenya is a result of the functioning of its political and economic
institutions.

✓It has been argued that in land-scarce and labor-abundant conditions;

▪ political economy favors so-called rent extraction and therefore high
inequality institutions which perpetuate policies that reinforce economic
exclusivity.
▪ In a labor-scarce and land abundant settings, the converse holds.
➢Politics and conflict in Kenya revolve around two key issues;
✓competition/control over productive land and
✓ethnic/regional opportunities for economic rent.
➢Thus historically,
✓issues of economic inequality have centered on access to agricultural land and
✓ control of the state, the means by which the dominating elite can create economic rent.
➢This has been the case since colonization when the colonial authority began the process of
alienating land from Africans in favor of supposedly more productive European
commercial farmers.
➢This created a powerful vested interest in colonial Kenya which had disproportionate
influence on public policy and used it to its advantage.
➢Although much less brazen since independence, the practice of biasing policy in favor of
certain groups has continued post-independence.
➢Thus Kenya’s political parties have been and are ever increasingly fronts for ethnic
political interests.
✓It is implicitly understood by voters that whichever ethnic alliance succeeds will deliver
economic dividends to its regional/ethnic base and whichever loses will be frozen out.
✓This is because of the underlying structure of power/ economic relations in Kenya.
✓The elite through its control of the means of economic rent creation (the state) and its
distribution consolidates its hold on power and wealth through webs of reciprocal
patron client relations.
➢In other words, the Kenyan elite preside over a system that appropriates the best
economic opportunities through its control over the state and its institutions.
✓This configuration militates against social cohesion and promotes ethno-regional
inequality.
✓It also reinforces the vicious circle from high inequality to power concentration and low
institutional quality to poverty.
✓In this regard, an important aspect of public policy that has been at the Centre of
controversy at various stages in the country’s history is that of overall economic policy.
➢The choices with regard to economic policy have often been motivated by a desire to
protect the interest of invested capital and the dominant elite and this has shaped at
crucial stages the response of policymakers to emerging events e.g.
✓ the response of the colonial government to growing unrest in the Native Reserves in the
1940’s and 1950’s which led to a radical shift in rural development policy by the colonial
government once the prevailing system was seen as unviable.
➢ In general, economic policy in Kenya can be construed as supporting the essential
interests of the dominant elite.
✓Indeed throughout the history of post-independence Kenya, a key concern of economic
policy has been precisely to protect these interests in the name of pragmatism and
economic stability
 Social Stratification
➢Social stratification refers to the hierarchical organization of society;
✓thus caste systems and class systems are examples of stratification
systems albeit based on different criteria or ‘orders’.
✓The way a society is stratified depends on its general characteristics e.g.
its levels of economic and political development.
➢ In general social stratification appears to be the norm among state-level
cultures.
➢Non-state or stateless cultures may also be characterized by some form of
stratification e.g.
✓between elders and youth,
✓shamans and the profane etc…
➢In the Kenyan context, prior to colonization many large communities e.g.
were ‘stateless’ or decentralized lacking a national government, feudal
aristocracy, well defined frontiers or some of the other trappings
associated with states. Instead the frontiers that mattered were local (for
instance between villages).

➢Some have argued that such ‘stateless’ societies were weakly stratified
hence the argument that many African societies were essentially egalitarian
prior to the colonization of the continent and the introduction of the market
economy by the West

➢Prior to colonization most African societies were ‘kinship-based’ valuing

social harmony over wealth and status
❖On the other hand, economically oriented societies are cultures in which
status and wealth are prized thus inducing stratification, competition and
conflict.

❖These are for instance essential features of feudal and capitalist societies.
This may be an idealized perspective, however, many pre-colonial societies
experienced frequent internal and external conflict including conflicts over
access to resources such as land

❖Moreover while overwhelmingly agrarian, there was substantial evidence of

trade between neighboring and sometimes distant communities.

❖Some communities were able to develop a sophisticated trading

relationship with the Coast which linked with the Middle East and Asia
based on ivory, gold and slaves. Hence again these societies could have
developed non-agrarian groups of traders and middle men.
❖Other communities notably the agro-pastoralists, prominently the Maasai
✓developed proto-states based on military expansionism for the control of grazing lands.
✓The Maasai pastoral economy was based on maximizing the yield (in terms of cattle) of a
given unit of grazing land.
✓This was achieved without individual tenure system (such as ranches) practiced in the West.
It was also achieved without formal state structures.
✓Grazing areas were controlled by particular clans or extended families with members
deferring to the Elders thus access to grazing lands is controlled and restricted.

❖The important point to note here is that even in so-called stateless societies, the exigencies
of managing finite common resources can encourage the development of social
hierarchies i.e. for the Maasai the role of elders, although other institutions e.g. age-set
groups were important risk mitigation and social promotion mechanisms in the political
economy of Maasai society
 Colonization & Impact of Colonial Policy
❖Colonization introduced completely new perspectives on land use to
Africans. In particular it introduced the concept of individual ownership of
land and thus the permanent exclusion of others from its use.
❖ In effect this began the process of economic stratification based on
control of the ‘means of production’ i.e. class formation which for an
agricultural economy boils down to land.
❖Although a gradual process, the colonizers initiated a system of land
consolidation through the use of state power (often arbitrarily) to the
benefit of white settlers.
❖The territory that became Kenya has long been characterized by some
horizontal and minor vertical inequality i.e. between agro-ecological
regions between ethnicities.
❖These inequalities have reflected local adaptations to diverse ecological
contexts, cultural differences etc…However since its inception as a Crown
Colony, inequality has emerged as a direct consequence of public policy.

❖Colonization began with the conquest and pacification of the Coast followed
by the interior. It was quickly followed by dispossession of land to facilitate the
creation of an agrarian capitalist system.

➢The Colonial state established institutions such as

✓ land titling/leasing,
✓rules for the appropriation of common lands under customary tenure etc...,
✓to expedite the transfer of fertile agricultural land to a new settler class
establishing itself in the Rift Valley and Central Province thus displacing the
indigenous population.
➢The justification at the time was that
✓Kenya was amply endowed with agricultural land having a population of less
than 4 million with plenty of spare agricultural land lying idle.

✓Thus European settlement could continue apace without greatly affecting

the well being of the indigenous population.

✓Moreover European farmers were deemed more effective in producing

cash crops for export, the surplus of which would be used to repay loans
taken from the Crown for the construction of the Kenya-Uganda railways.
➢However, both the state and the settlers required native labor.
✓Measures were thus taken to restrict the purchasing power and self sufficiency
of Africans.
✓In particular,
▪ they were taxed and
▪ prevented from participating in the production and export of cash crops and
▪ their fertile land expropriated.
➢Eventually overcrowded
▪ ‘Native Reserves’ were created where the harsh conditions of life encouraged
out-migration to land owned by the settlers as ‘squatters’.
▪ The Native Reserves also served a political purpose of controlling the African
population by fragmenting it into its ethnic constituents thus preventing the
emergence of a multi-ethnic coalition to challenge European dominance.
▪ This began a process of ‘proletarization’ of the natives in parts of country,
particularly in Central Province.
➢The consequence of these policies was
✓the impoverishment of Africans who then had to sell their labour to white farmers for
income.
✓This policy was aimed at creating a surplus labour pool.
✓These demands for labour intensified during the 1940’s in response to increased
cultivation of cash crops for export and competing demands for able bodied labor e.g.
the Army.
➢Such exploitative policies were possible because
✓the Colonial state and the settler system evolved symbiotically.
✓Institutions such as the Legislative Council (Legco) in which only white settlers were
represented effectively ‘captured’ public policy formulation for the interests of this
elite.
➢Thus the governance of the Colony was by and for the interests of a small racially
defined settler class. In particular the growing problem of landlessness and poverty
amongst Kikuyu in Central Province was ignored precisely because it ensured a stable
supply of low cost labor.
➢Nevertheless the settlers couldn’t use all the land they had acquired thus a ‘squatter’
class emerged on the periphery of the so-called ‘White Highlands’.
➢These squatters were in fact the indigenous populations to the colonized regions.
✓They were now tenant farmers who in exchange for labor on the commercial farms
were allowed to cultivate parcels of land owned by European farmers for their needs.
✓They were also a convenient and low cost source of seasonal labor.
✓As the demand for labor increased,
▪ policies were implemented to induce a greater labor supply from this source not by
increasing wages but by reducing economic alternatives.
▪ Restrictions on the access of African tenant farmers to land in the ‘White Highlands’
were imposed.
➢As the colonial economy grew
✓urban Centre's were established in which the first manufacturing and service industries
were created, usually providing basic consumer goods or transforming agricultural
products for export.
➢The work force for these new industries and the lower levels of the colonial administration was
provided by the increasing numbers of Africans that had benefited from missionary education
especially from Central Province.

➢This new class of African workers and petty bourgeoisie’ would later form the first ethnically
based political associations agitating for greater representation of Africans in the governance
of the colony and eventually demanding independence.

➢Thus the two salient characteristics of Kenya’s politics were established; namely
✓The ethnic fragmentation and
✓The contestation of authoritarianism.

✓At the same time, greater numbers of Kikuyu had no means of living in the rural areas.
As a result,
✓a growing urban proletariat formed thus doubling the population of Nairobi between 1938 and
1952.
 Political Economy of Inequality
✓The behavior of the elite in instrumentalization of power for its economic interests
specifically through its control of economic policy corresponds to the Marxist idea of the
relationship between ruling class interests and the state.
It can be argued that in Kenya,
✓the process of class formation is a by-product as well as a motor of the politically
motivated redistribution of economic opportunities to favored groups.
✓Thus economic policy has purposefully created widespread economic inequality,
▪ creating a situation where the competition for political power is the key to economic
advancement.
▪ This process has since independence assumed an ethno-regional expression in part as a
result of the exigencies of power consolidation under different regimes.
✓These factors lead to a supposition that class formation, inequality and economic
development are intimately linked.
✓The ruling interests in the state would use their control over the state to reward interests
or factions that are crucial to its hold on power.
❑Moreover, for historical reasons, we would expect that the development of class would
differ regionally; those parts of the country in particular the former White Highlands that
have the most developed commercial agriculture i.e. where land has become an economic
asset would exhibit the most stark manifestations of this process of economic
consolidation between the haves and have not's.
❑This is not the same as saying that the poor in those regions are the poorest in the country
but that the gap between the best off and the worst off is larger than the national average.
❑On the other hand we would expect to see far less divergence between the best and
worst off in those areas that have been marginalized from the capitalist economy.
❑Other manifestations of class-based inequality such as regards education and health
would also follow these lines.
✓The elites of these regions might send their children to private schools or even abroad
while the poor have no choice but local public or community schools.
❑ We would also expect to see regional differences i.e.
✓the elite at a national level may be dominated by people from certain communities thus
highlighting the reality of unequal opportunities engendered by the political systems over
 THE RURAL ECONOMY
The Swynnerton Plan (1952-1954)
➢The Swynnerton Plan officially known as “A Plan for the Intensification of
Native Agriculture” was an agricultural reform programme proposed by an
Assistant Director of Agriculture in the Colonial Administration, a Mr. R.I.
Swynnerton.
➢Its motivation was both political and economic.
✓By initiating the modernization of African agriculture, it was hoped to form
a stable capitalist economy and stave off rebellion.
✓The root of this modernization was to be land tenure reform.
✓In retrospect, although its motivations were fundamentally conservative it
was perhaps the most far reaching and ambitious reform of land tenure ever
undertaken in Africa.
➢The plan was essentially a politically motivated social experiment to pacify
an increasingly restive indigenous population .
✓By the 1950s, the Native Reserves of the Central Province had been systematically reduced
by expropriation to such an extent that they were unable to decently support the populations
that lived on them.
✓This had created a crisis of poverty and unemployment that was politically explosive.
✓Until now the problem of landlessness and poverty in Central Kenya had been ignored by the
Colonial authorities but growing political agitation by an increasingly politically active
Native population and the outbreak of the Mau Mau insurgency eventually prompted
action.
❖Prior to the Swynnerton, no systematic effort had been made by the Colonial Government to
develop indigenous agriculture.
✓ Indeed native agricultural development appears to have been actively frustrated in a bid to
protect the interests of the white settlers.
✓For instance, besides the fact that the best agricultural land had been expropriated for white
settlers, indigenous small-scale farmers were prevented from participating in the most
lucrative cash crop markets such tea and coffee.
❖One effect of these policies was to impede the development of an indigenous capitalist
class since opportunities for accumulation available to Africans were significantly
restricted.
✓This meant that there was very little economic differentiation between Africans although
the spread of missionary services including education benefited some parts of the country
more than others.
✓This also meant that the predatory capitalism of the colonial period had no ‘native’
constituency save for European settlers and administrator.
❖Thus, overcrowded and many lacking alternative livelihoods, the Native Reserves were
fertile grounds for rebellion.
❖It eventually happened in 1952 in Central Province, with the eruption of the so-called ‘Mau
Mau’ war or rebellion.
❖The underlying reason for this uprising was the poverty caused by the massive
expropriation of Kikuyu land by European settlers
• By the 1950s nearly 80% of what had been Kikuyu land was controlled by some 30,000
white settlers. The remainder was home to more than a million Kikuyu.
• Increasing numbers of Kikuyu tenant farmers who leased land in exchange for their labor
found that their real wages had declined steeply through the 1940s.
• White farmers were demanding more labor time in exchange for use of their land. In effect
these tenant farmers were being turned into an agricultural labor force for white settlers.
• The rebellion itself was repressed ruthlessly and successfully by the British. However, the
ultimate political consequence to the rebellion was the eventual concession by the British
to most of the political demands that had driven the Mau Mau rebellion i.e. they sacrificed
the interests of the European Settlers.
• These concessions were in part channeled through the Swynnerton Plan which started off
as an attempt to assure the loyalty of the so-called African loyalists in the Kikuyu Reserves.
It eventually became the core of agricultural policy in Kenya continuing to influence policy
even after independence.
• In essence the British chose to try to stabilize the country by creating an indigenous
‘loyalist’ agriculturally based capitalist class whose economic interests would be closely
aligned with those of the multinational capital that controlled the bulk of the Kenyan
economy.
➢The settlers themselves only represented some 20% of invested capital and as long as Kenya was run solely for
their benefit,
✓ the Colonial authorities concluded, Kenya would remain unstable; thus
✓ Britain’s economic interest were best served by an indigenous bulwark against the encroachment of socialist
ideologies that could possibly motivate movements such as the Kenya Land & Freedom army (aka Mau Mau),
✓ encouraging (some) Africans to take part in the capitalist economy would thus protect the essential interests of
the colonizer even after independence.
➢The plan called for land tenure reforms aimed at moving the basis of land ownership in the’ African Reserves’
from communal tenure to one based on private property.
➢These reforms were to be
✓ complimented by technical and institutional reforms that were to capitalize on the incentives individual
farmers now had to adopt technology and help farmers move to higher productivity/higher value crops.
✓ Ultimately, the objective was to build prosperity by intensifying agricultural productivity per unit land.
To facilitate this transition into commercial agriculture,
✓ marketing boards were created and indigenous farmers were permitted to take part in the production of
cash crops for export.
✓ In addition, extension services created and the consolidation of landholdings initiated.
✓ Nonetheless as initially conceived, the Swynnerton Plan especially served the interests of more prosperous
farmers in the Kikuyu reserves who had established close links with the British.
✓ Most notably land redistribution was not part of the Swynnerton Plan; this would have to wait for
independence.
➢Thus whatever the benefits of land adjudication and registration, it has arguably been the crucible of social
stratification in rural Kenya in two ways
✓ by creating avenues for markets and
✓ by creating avenues for further expropriation by manipulating title.
➢With ownership of land titles
✓ an individual can have access to bank finance, which can be consumed or invested thus raising the
productivity of his capital (land) and further enhancing his capacity to accumulate this logic ultimately
explains the importance of conflicts over land and the historical centrality of land in the accumulation
process of Kenyan elites.
✓ Thus the question as to which form of class formation, economic accumulation or primitive accumulation
predominates.
➢The experience in other parts of the world has been that commercialization leads to increased economic
differentiation in the peasantry.
➢There is abundant evidence that commercialization has been associated with class formation in rural Kenya
and thus corroborating Swynnertons ultimate logic i.e.
✓ the commoditization of land has moved Kenya’s rural economy some way toward transformation from a
pre-capitalist society to capitalism.
➢Finally, the Colonial government itself conceived the plan as
✓ first and foremost a political strategy to reward loyalists and
✓ ward off an impending widespread rebellion.
✓ Thus while the rational for the Swynnerton Plan was economic efficiency, its intent and underlying logic was
class patronage.
• Whereas it is still the case that the overwhelming majority of rural dwellers are peasants, clearly a
class of commercially oriented farmers has emerged.
✓Of course, not all rural inequality can be ascribed to land ownership issues.
✓ Agro-ecological factors are an important contributor but the normal functioning of the market
economy will necessarily imply growing accumulation of productive assets in the hands of those
who can use them ‘efficiently’.
• One of the key goals of the Swynnerton Plan i.e. ending once and for all disputes over tenure and
localized land conflicts has clearly not been met.
✓ Land conflict is more acute than ever in Kenya,
✓corruption,
✓patronage-based land allocations,
✓ resurgent ethnic chauvinist ideologies
✓and growing land scarcity have all contributed to create a complicated and confusing picture of
land conflict.
▪ Indeed, it is interesting to observe that the flash points over conflict over land are precisely in
those parts of the country that the land consolidation process is most advanced.
▪ After independence the new government quickly established its political alignment with the
former colonizer, the expectations especially of the former ‘Mau Mau’ for an end to the
landlessness that followed the seizure of their ancestral lands during colonization were dashed.
➢The new government had no intention of pursuing a wholesale redistribution of lands
owned by the Europeans although the government during the first 10 -15 years of
independence redistributed some 1.25 million acres of land alienated by European
settlers.
✓Ostensibly this redistribution was market based;
▪ thus the beneficiaries of land allocations had to fully fund their land acquisitions
effectively excluding those destituted by colonialism.
▪ There was no question of free resettlement.
▪ exception of course of the new elite which benefited from huge transfers as patronage.
▪ In this respect the priority of the government does not appear to have been to restore the
pre-colonial status quo.
✓Instead it was to support the redistribution of land particularly in Central Province from
white settlers to African commercial farmers and perhaps more importantly for
purposes of patronage for loyalty as was initiated by the Colonial government under the
Swynnerton Plan and needless to say self enrichment.
➢This system of politically inspired land allocation also eventually became the axis around which politics in
Kenya revolved.
✓ Land in Kenya thus became subject to an unofficial system of patronage (corruption) based on the nearly
absolute power over land the state had inherited from its colonial predecessor.
✓ In this way, large tracts of land in settlement schemes were misallocated / appropriated to politicians and
well connected individuals.
➢The institutions pioneered by the Swynnerton Plan were further developed and broadened post
independence perhaps less for their economic utility than for their potential as tools for rent
extraction.
✓The dualism and contradictions these institutions introduced in the political economy of Kenyan
agriculture remain potent issues.
➢Instead of creating true capitalist classes, Swynnerton simply
✓ institutionalized the idea of land as patronage and
✓agricultural policy as a means of rewarding favored groups and elites.
• The effect has been that
✓some parts of the country have been able to develop a cash crop based market economy with
the resultant large scale socio-economic changes,
✓while this has enabled other parts of the country remain locked in subsistence agriculture
 THE URBAN ECONOMY
• As Kenya’s economy developed a small industrial sector emerged processing agricultural
produce for export as well as the administration.
✓Thus, by the 1950s there was a substantial urban population in the country. Nairobi for
instance had a population of 300,000 by 1958.
• The same pattern of exploitation was replicated in the urban industrial/service economy
with huge income differentials between African workers and their European bosses.
✓In the Colonial Civil Service for instance, more than 90% of the top positions were filled by
British expatriates.
✓This reflected the deliberate underdevelopment of African human resources by the
colonial authorities.
• After independence, with the expansion of the modern sector and public services and the
expansion of the labor movement, wages of the formally employed rose. However this was
accompanied by the expansion of the so-called informal or Jua Kali sector.
• However the reality of the 1980s and 1990s put this theory to the test. After some years of
contraction wage differentials rose rapidly both in the public and private sectors. Thus by
2007 Kenyan CEOs and politicians were rated amongst the highest paid in the world
 ECONOMIC POLICY AND SESSIONAL PAPER 10 of 1965
➢Kenya inherited a distorted economy from the British;
✓state control had been used to systematically exploit and exclude the
majority of the population for the economic interests of a relatively small
settler community and agricultural multinationals.
✓This system was further buttressed with elaborate controls and state
intervention following the post-war model of the UK itself.
➢Behind these protections, a significant private sector based on commercial
agriculture and light manufacturing had developed.
➢Thus by 1963 Kenya had one of the most diversified and advanced
economies in Africa but this was a double edged inheritance.
✓On the one hand, it gave Kenya a head start in its industrial development.
✓On the other it was built on a legacy of economic injustice that had to be
acknowledged and dealt with.
➢Should the new Kenya nationalize industry, re-appropriate lands etc... as
had been undertaken elsewhere e.g. Ghana, Tanzania or should Kenya
steer a pragmatic path relying on its inheritance to generate growth and
redistribute the proceeds?
➢This was the crux of the divergences between the different factions of
KANU some favoring a radical/socialist agenda (Jaramogi Oginga Odinga)
as was apparently espoused by the KANU manifesto of 1963 and others
favoring a market based mixed economy (Tom Mboya, Mwai Kibaki etc...).
➢In the end the basic structure of Kenya’s capitalist economy was
maintained and accentuated by the post-independence government.
➢After serious internal conflict within the ruling elite about the direction the
country should take, the pro-capitalist faction of KANU prevailed.
➢This was reflected in the subsequent Sessional Paper No.10 of 1965 on
African Socialism and its Application to Kenya.
❖In essence the policy envisaged by the government was to maintain a private sector led
economy with an increasing role for the state in certain ‘strategic’ parts of the economy.
This was in order to strike a balance between the interests of those demanding immediate
redistribution and those fearing that such an approach would lead to economic collapse.
❖In the words of President Kenyatta in the preamble to the Sessional Paper 10
✓ ‘...We have rejected both Western capitalism and Eastern Socialism... in practice the
overriding priority of economic policy as Sessional Paper 10 lays out was to be the pursuit
of economic growth through private capital and trade.
❖Indeed the development policy envisaged in the Sessional Paper 10 implicitly rejects the
notion that integration into the global capitalist economy through foreign investment and
trade would lead to underdevelopment and inequality, a view most closely associated with
‘Dependency Theory’.
❖Instead foreign investment would be encouraged, but at the same time a policy of
gradually ‘Africanizing’ the economy by requiring for instance foreign investors to
partner with indigenous Kenyans, would be pursued.
❖Moreover the country would pursue an import substitution strategy for industrialization.
✓The fears of those concerned that the pursuit of a capitalist model would inevitably lead to
economic stratification and class formation were dismissed.
❖It was argued that the policy being unveiled was not capitalism but ‘African Socialism’
which would be based on the ‘African’ planks of ‘political democracy’ and ‘mutual social
responsibility’.
✓These constraints it was argued would prevent the state from being captured by the
interests of any particular elite and ensure that the fruits of development were equally and
fairly shared.
• Moreover with respect to the Marxist critique Sessional Paper 10 contends that the world
described by Marx had no counterpart in post colonial Africa which was essentially a
classless society. Thus issues such as the emergence of a landless proletariat and their
exploitation by the bourgeoisie were besides the point.
❖Kenya’s development problem consisted of raising everybody’s incomes as rapidly as possible.
✓ Vigilance rather than economic policy was the means to prevent the development of systematic social
inequality.
❖Sessional Paper of 1965 however had the effect of
✓ skewing the distribution of development expenditure in favor of those parts of the country that had
already earlier benefited from economic development.
✓ In particular this has been perceived as unduly favoring the Central Province from which the dominant
group in the new national elite hailed.
❖The effects of these policies on Kenya’s development were broadly favorable.
✓ Throughout the 1960s to 1970s growth rates were high, considerable progress was recorded in expanding
access to essential services (especially basic education) and poverty levels declined.
❖This relative prosperity masked serious underlying issues with regard to Inequality & Equitable
development.
❖ Although ‘equitable development’ is a stated goal in the Sessional Paper 10 of 1965,
✓ in practice little action was taken to put into effect until after the Kenyatta regime with the ill fated
‘District Focus for Rural Development’ strategy launched in 1983.
✓ In addition, the economic model pursued created ever increasing distortions that would eventually lead to
its unravelling.
❖The District Focus was one of the initiatives introduced by the Moi regime which although
proclaiming his allegiance to the legacy of Kenyatta was perhaps, initially more sensitive to issues
of regional/ethnic inequality that had pervaded the latter years of Kenyatta’s government.
✓However, Moi came to power at an inauspicious time for the economy. The model which had
hitherto worked for Kenya was now running out of dynamism.
✓Moreover the international situation both economically and ideologically was less than propitious.
I. Extensive structural reforms were demanded by donors and the international development
institutions.
II. In particular the web of state controls which had served the previous government so well as a
tool of patronage were to be dismantled,
III. industries privatized,
IV. budget deficits contained and so on.
✓This was an immediate threat to the Moi regimes ability to consolidate power which following the
Kenyatta model relied on patronage to ‘buy’ loyalty and stability.
✓To adapt to these new demands, new strategies were employed such as
I. abusive land allocations and
II. the systematic plunder of state corporations.
✓Thus, new ‘kleptocratic’ elite flourished during this period of economic stagnation i.e. the era of
Structural Adjustment.
 STRUCTURAL ADJUSTMENTS AND REFORMS
❖Globalization was ushered into Kenya like many other unwilling developing countries through the liberal
reforms of the 1980’s and 1990’s.
✓ There was considerable skepticism as to the wisdom of these reforms and powerful vested interests arrayed
against them.
✓ This combination of factors explains the long and grueling road many countries including Kenya have
traversed in pursuit of ‘structural adjustment’ and ‘stabilization’.
❖The argument for structural adjustment is simple and laudable.
✓ The majority of developing economies had hit a brick wall by the late 1970s with import substitution.
✓ Such policies demand widespread state intervention that only the most skillful states can accomplish
competently.
✓ Such states are rare especially in Africa and the price for an incompetently directed economy might be
frustrated development, corruption, debt and poverty. In any case this was the argument advanced by the
IMF/World Bank.
✓ The old strategy had led to widespread rent-creating ‘distortions’ and the time had come to unwind them in
order to re-launch development on a new more sustainable path, i.e. market friendly economic liberalism.
❖However state capitalism as practiced in Kenya and elsewhere depended on high and stable commodity
prices and ready access to foreign debt from the multilateral institutions to support the capital goods imports
required to maintain this kind of industrialization.
❖With the oil shocks and the slump of commodity prices, external imbalances on the trade account grew to
unsustainable levels thus ushering in the debt crisis.
➢Meanwhile development institutions and donors now required borrowing countries to adopt Structural
Adjustment Programs before receiving new loans or debt rescheduling.
➢ In order to avoid bankruptcy countries were required to abandon the economic model that a majority of
developing countries had pursued since the 1950s.
➢Such wrenching changes naturally had major social implications.
✓ In Kenya and many other developing countries, a consistent finding is that these pro-market reforms
worsened economic inequality and far from shutting down avenues for corruption.
✓ On the contrary, privatization and commercialization created new avenues for corruption including the
capture of former state enterprises at throwaway prices by members of the elite.
✓ Moreover with the decline of parastatals the urban ‘middle class’, the main beneficiary of the statist policies
of the past, experienced a sustained decline in living standards.
✓ The ban on new recruitment into the civil service which only ended in 2003 had a major impact on the
employment prospects of university graduates for instance.
✓ In addition in order to fight inflation the government stopped regularly reviewing the pay and benefits of
civil servants.
✓ Thus the pay and conditions of employment of civil servants declined sharply especially in the 1990’s a
period of high inflation in Kenya.
✓ More generally the introduction of cost sharing programs reduced the accessibility of essential public
services such as health and education.
✓ In effect the basket of goods and services available to most citizens declined.
➢From the perspective of class formation the period of structural adjustment was a period of regression, for
those not in the ruling elite poverty grew and social mobility stagnated.
✓ Kenya’s historical inequality/ class formation can thus be traced to British colonization-----
through
1) Expropriation of land, ----created land scarcity and excess labor ---impoverishment of Africans who then
had to sell their labor to white farmers for income.
2) Native reserves, ---harsh conditions of life encouraged out-migration to land owned by the settlers as
‘squatters’.
3) Hut taxes, ---restrict savings, the purchasing power and self sufficiency
4) Compulsory labor, ---purportedly to repay loans taken from the Crown for the construction of the Kenya-
Uganda railways.
5) Missionary education.--status and wealth are prized thus inducing stratification, competition and
conflict.
6) land titling/leasing--arguably been the crucible of social stratification in rural Kenya. Swynnerton
simply --institutionalized the idea of land as patronage and --agricultural policy as a means of
rewarding favored groups and elites.
7) Marketing boards and commodity monopolies, etc.
8) Thus Kenya became a rent extraction colony. Institutions evolved to support high inequality
9) These institutions were not completely dissolved at independence; instead they were coopted by the
new elite. Thus the political economy of inequality was maintained and ethicized as opposed to racialized.
10) Consequently, the heart of political contestation in Kenya is the competition for elite rents created by
high inequality institutions.
 Other Causes of Inequality
1. Needless to say there are also underlying natural reasons for the economic inequality observed
in the country.
✓ Not all parts of the country possess the same economic potential after all.
✓Thus while regional inequality may be driven by deliberately biased public policies which are
connected to the system of patronage that underpins the capacity of the state to mobilize support
across the country, regional inequality is also a consequence of natural endowments.
✓For instance, North Eastern province which by most economic indicators is the least developed
part of the country because of its alienation from power and because of harsh environmental
conditions such as aridity which limits its economic potential.
2. Moreover until recently, the government had no mechanism to address the retarding effect of
natural disadvantage.
✓In fact to the contrary, the case for biased development i.e. giving those countries which were best
endowed a disproportionate share of public resources was made in Sessional Paper 10/1965.
✓The case the government makes there is that the best use of scarce public investment resources is
to invest in those parts of the country that have the natural and human resources to deliver the
highest return for those investments.
✓By implication therefore those areas that had already benefited from significant investment should
receive the priority in the allocation of new resources. Naturally those areas were the former
White Highlands and Nairobi.
✓This economic rationale was found for skewed development which underlies inequality in Kenya.
3. Another social force that has historically acted to promote stratification in
capitalist economies is technological change and the growing labor specialization it
induces.
✓In effect labor is not perfectly substitutable in the parlance of economists.
✓The differential impact of globalization is transmitted by the effect it has on labor
demand In general, labor in import competing sectors suffer and capital migrates
to other parts of the economy or overseas.

4. Since Kenya pursued an import substitution strategy of industrialization the

‘import competing’ parts of the economy are situated in the manufacturing/urban
economy.
✓Unsurprisingly manufacturing stagnated since the late 1970’s with the
consequential expansion of urban unemployment and poverty.
5. On the other hand there has not been a boom in Kenya’s
comparative advantage industries i.e. agriculture and
tourism.
✓In part this reflects other factors such as the decline of
infrastructure, extension services and the mismanagement
of marketing and supply institutions that prevented the
realization of these opportunities.
6. However the very institutional framework that supported
the previous import substitution system slowly got reformed.
✓This created opportunities for powerful members of the
elite to capture rents.
 CONCLUSION
1. The trajectory set by the colonization of the country and more specifically the Swynnerton
Plan have been maintained. Kenya is a country characterized by rising economic inequality
both in the rural and urban contexts.
✓This translates to widening gaps in access to opportunities and the consolidation of economic
advantage through the political process by certain groups.
✓ In effect despite the fine sentiments contained in the Sessional Paper 10 of 1965 on the need for
equitable development and for vigilance to pre-empt the emergence of predatory economic
relations, Kenya appears to have fallen into precisely this trap.
2. A range of research highlights the growing inequalities in the rural economy, not just between the
largest landholders and the rest but also within the peasantry between those who have been able
to take advantage of possibilities to expand their landholdings for instance and those who have not
or have seen their landholdings decline through the generations.
✓The starkest gap between rural haves and have nots appear in those parts of the country that
have become integrated into global commodity markets with rising landlessness an ancillary
consequence of the capitalization of land.
✓Moreover the gap is also between those parts of the country ‘left behind’ in the development of
rural capitalism and the rest of the country.
✓Thus the poorest parts of the country are not just those parts of the country that are described as
agriculturally low potential but include parts of the country that have traditionally been excluded
from the cash crop sectors.
3. The institutional logic bequeathed by the British of vesting unfettered power to allocate
land in the state has led to numerous egregious abuses.
✓This culture has gone on to develop into the wholesale destitution of certain communities
for example the Ogieks whose forest land has simply been taken by the state and various
efforts to resettle them have been thwarted by politicians.
4. In the urban economy with the adoption of ‘state capitalism’ following the internal
debates over development policy in KANU and the subsequent development of occult
systems of patronage within the elite and more generally the emergence of ethnicity as a
tool of political mobilization, new dimensions to class formation were introduced by the
post-independence state.
✓Kenya’s new ruling class quickly took advantage of the opportunities for wealth that
their new power and influence created.
✓ A cursory look at Kenya’s political and business elite shows the extent to which power has
been used to propel a small group of individuals to great wealth.
✓More generally the key to rapid social promotion in Kenya has clearly been proximity to
power.
5. Two decades witnessed a rapid rise in urban poverty associated with economic decline and the
emergence of a vast ‘informal sector’.
✓The urban poor dominated the informal sector where conditions were starkly different from the
formal sector.
6. Since the fundamental organizing principal of Kenya’s political economy appeared to be ethnic
patronage this served overtime to exacerbate horizontal inequalities, politicizing ethnicity in the
process.
✓Nevertheless poverty and inequality are universal in Kenya.
✓ Ethnicity serves as a convenient mask for the reality that the country remains characterized by
▪ a small very wealthy political elite,
▪ a somewhat larger but stagnant and insecure middles class comprising urban wage labor,
▪ small scale traders and commercial farmers and
▪ very large and very poor strata's which have only weak links with the modern economy.
7. Promulgation and adoption of The 2010 Constitutions gives promise for spurring development ,
managing class stratification and inequality.