Fiscal relations in Kenya’s devolved system of governance Intergovernmental fiscal relations often refer to the interactions between two or more levels of government over the assignment of taxing and spending powers. These interactions occur between, or among, actors representing agencies of different units or arms of government, and can oscillate from conflict to collaboration and even co-operation. This article examines the strategies employed by different actors, representing different levels of government, to control the allocation and spending decisions of devolved funds in Kenya. Based on content analysis of various pieces of government legislation, reports, face-to-face interviews, advisory opinions and newspaper excerpts, the findings indicate that conflictual fiscal relations in Kenya’s devolved system are often caused by competition over the control of devolved resources for reasons of projecting and protecting power among elected officials. Context of intergovernmental relations in Kenya The structure of fiscal relations is not only shaped by constitutional and legal designs as defined by temporal factors in a given county, but also by the individual interests of different actors representing different levels of government. When looked at from a rational choice perspective, it is the collectivity of these individual interests, especially for power and resources, that define the relations between the levels of government – and Kenya is no exception. The foundation for intergovernmental fiscal relations in Kenya is clearly spelled out in the Constitution of Kenya 2010 (the constitution) and the Public Finance Management Act 2012 (which lays out the financial management framework for the National and County Treasuries). The constitution delegates sovereign power to the national government and all 47 county governments and places responsibility for exercise of this power on state organs of both levels of government (GoK, 2010: Article 1 (3)). In respect of intergovernmental relations, the constitution recognises the national and county governments as ‘distinct and inter-dependent’ and states that they ‘shall conduct their mutual relations on the basis of consultation and co-operation’ (GoK, 2010: Article 6 (1–2)). Further, the constitution requires ‘government at either level to respect the functional and institutional integrity of government Commonwealth Governance Handbook 2014/15 57 Obuya Bagaka Intergovernmental fiscal relations are determined by the constitution. Pictured: Treasury Square, Mombasa Daryona CC BY-SA 3.0
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