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An Employment-Targeted Economic Program for Kenya
The Kenyan economy has experienced improved economic growth in recent years, and the government has maintained a commitment to generating 500,000 new jobs per year. But the country still faces severe problems of poverty-level employment – people working full-time yet living with their families in poverty. This study develops detailed proposals for greatly expanding decent employment opportunities in Kenya, and to accomplish this in a manner that also creates a wide range of employment and business opportunities, including those for small and medium-sized enterprises, agricultural small holders, commercial banks, and microfinance institutions.
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Critical Acclaim
Contents
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The Kenyan economy has experienced improved economic growth in recent years, and the government has maintained a commitment to generating 500,000 new jobs per year. But the country still faces severe problems of poverty-level employment – people working full-time yet living with their families in poverty. This study develops detailed proposals for greatly expanding decent employment opportunities in Kenya, and to accomplish this in a manner that also creates a wide range of employment and business opportunities, including those for small and medium-sized enterprises, agricultural small holders, commercial banks, and microfinance institutions.
Critical Acclaim
‘. . . an important and necessary contribution. The authors make several innovative departures from standard thinking about macroeconomic policies, both in terms of goals and strategies. While the study is focussed on Kenya, much of the approach and most of the policy conclusions have direct relevance for a wide range of developing countries. . . this is an extremely valuable book, because it provides a clear, systematic and context-driven set of proposals for macroeconomic policies and development strategy that is directed to the generation of decent employment. This is something that is frequently talked about as the desired alternative strategy, but elaborations of this idea to make it practical and feasible are rare. This book is therefore an important weapon in the struggle to bring about more progressive macroeconomics as well as more inclusive development.’
– Jayati Ghosh, Review of Radical Political Economics
‘Three decades after the International Labor Organization’s ground-breaking study, Employment, Incomes and Equality, Profs. Pollin, Mwangi and Heintz re-open the path with 21st century economic analyses and instruments. Kenya’s policymakers would be unwise not to study these ideas, and then study them again.’
– Mbui Wagacha, Former Director of Research, Institute of Policy Analysis and Research, and Economic Consultant to the African Development Bank and United Nations Economic Commission on Africa
‘A key challenge faced by African countries today is to translate economic growth into meaningful improvements in living standards at the household level. One of the effective means of addressing this challenge is to design macroeconomic and sectoral policies that explicitly target the creation of decent employment to allow households to overcome poverty. This detailed and innovative study on Kenya provides a valuable contribution on how this can be accomplished by offering a wide range of policy suggestions.’
– Léonce Ndikumana, United Nations Economic Commission on Africa
‘Average incomes in Kenya have been stagnant for about a quarter century and the rate of investment has declined. This important study contains a strategy for development that focuses on creating employment that lifts workers out of poverty by increasing public investment in roads and water infrastructure and promoting private investment in small enterprises by increasing the quantity of credit and lowering its cost. The strategy advocated stands in sharp contrast to those who believe the solution to Kenya’s economic problems is to cut formal sector wages and increase “flexibility” in the labor market.’
– Keith B. Griffin, University of California-Riverside, US
– Jayati Ghosh, Review of Radical Political Economics
‘Three decades after the International Labor Organization’s ground-breaking study, Employment, Incomes and Equality, Profs. Pollin, Mwangi and Heintz re-open the path with 21st century economic analyses and instruments. Kenya’s policymakers would be unwise not to study these ideas, and then study them again.’
– Mbui Wagacha, Former Director of Research, Institute of Policy Analysis and Research, and Economic Consultant to the African Development Bank and United Nations Economic Commission on Africa
‘A key challenge faced by African countries today is to translate economic growth into meaningful improvements in living standards at the household level. One of the effective means of addressing this challenge is to design macroeconomic and sectoral policies that explicitly target the creation of decent employment to allow households to overcome poverty. This detailed and innovative study on Kenya provides a valuable contribution on how this can be accomplished by offering a wide range of policy suggestions.’
– Léonce Ndikumana, United Nations Economic Commission on Africa
‘Average incomes in Kenya have been stagnant for about a quarter century and the rate of investment has declined. This important study contains a strategy for development that focuses on creating employment that lifts workers out of poverty by increasing public investment in roads and water infrastructure and promoting private investment in small enterprises by increasing the quantity of credit and lowering its cost. The strategy advocated stands in sharp contrast to those who believe the solution to Kenya’s economic problems is to cut formal sector wages and increase “flexibility” in the labor market.’
– Keith B. Griffin, University of California-Riverside, US
Contents
Contents: Brief Highlights of Major Proposals Summary of Major Findings and Proposals 1. Introduction 2. Employment Conditions and Living Standards 3. Profile of Non-agricultural Household Enterprises 4. Labor Costs, Labor Market Institutions and Employment Expansion 5. The Rural Sector: Institutional Reform for Development 6. Investing in Roads and Water Infrastructure 7. Monetary Policy, Inflation Control, and Interest Rates 8. Exchange Rate Policy and Foreign Trade 9. Restructuring Kenya’s Financial System 10. Fiscal Policy: How to Pay for New Pro-employment Initiatives 11. A Restatement of Goals and Strategies Appendix 1: Earnings Function for Household Enterprises Appendix 2: Supply Shock Inflation Appendix 3: Exchange Rate Overvaluation Model Acronyms Bibliography Index
