Competition, Fragmentation and ‘Resource Factionalism’ : The Politics of Governing Oil and Gas in Kenya

This paper explores how Kenya’s political settlement has shaped the governance ofits emerging oil sector. Specifically, it examines three aspects of oil governance: (1)institutional arrangements within the sector; (2) the extent to which bureaucratic‘pockets of effectiveness’ are present; (3) whether Kenya is striking deals with oilcompanies that are in the national interest. With regards to the first aspect, the paperfinds that external actors have pressured Kenya to adopt best-practice institutions thatseparate the state’s roles. However, the implementation of these institutionalarrangements has been hobbled by intra-elite fighting over rents, sounding a warningabout promoting reforms that are not mapped onto domestic political realities. In termsof the presence of, or potential for, pockets of effectiveness, the paper finds thatKenya’s political settlement undermines incentives to invest in state capacity. The oiltechnocracy offers too lucrative a stream of rents, even before oil has started to flow,for it to be left in the hands of politically empowered and autonomous bureaucrats,given the necessities of generating political financing and ensuring factional balancingwithin a competitive and fragmented settlement. Finally, the paper finds that the ability– or inclination – of the state to negotiate sound deals with oil companies is underminedby Kenya’s political settlement. Deals are often motivated less by the national interestand more by political considerations and a desire to benefit particular individuals andfactions. Concluding, the paper finds little evidence that Kenya’s ruling elites aredemonstrating the commitment or capacity to manage the country’s oil resources indevelopmental ways