Аннотация:Although it is theoretically expected that fiscal decentralization leads to efficient provision of local public services and induces economic growth, there is a mixed outcome of the non-devolved and devolved effect on economic expansion across earlier empirical studies.This could be due to non growth-enhancing expenditures that crowdout outlays that are meant to boost economic growth.Further, devolved allocation is small, about 15 % of total revenue, to full stimulate economic growth in Kenya.However, national government spends a substantial amount in counties to complement devolved expenditure.Therefore, the issue of which non-devolved expenditure by national government can foster permanent movements in county economic growth becomes core.The panel ARDL and Kao co integration technique were used to test the linkage between non-devolved expenditure and economic growth in Kenya during the period, 2013-2017.The panel ARDL regression results revealed that the effect of nondevolved expenditure on economic growth was positive and significant in both long-run and short-run.The findings provide a basis for recommendation on the need for national government to increase budget allocation and execution in counties to complement devolved expenditure and also stimulate county economic growth in long-run.
