Institutions and Performance of Services Funded by the Constituencies Development Fund in Kenya

We investigate the effect of institutions on the delivery of services funded by the Constituencies Development Fund (CDF) in meeting constituents’ needs in Kenya. Using household survey data collected by the Kenya Institute for Public Policy Research and Analysis (KIPPRA) in 2006 from a sample of constituencies, we construct indices of voice and client power using principal component analysis. We then estimate ordered probit models regarding the rating of the performance of CDF funded projects in meeting the constituents’ needs. The estimation strategy we adopt controls for potential endogeneity of the institutional measures, potential sample selection-bias and potential unobserved heterogeneity. The results indicate that higher quality institutions are associated with better service delivery outcomes.