Relating Government Social Cash Transfers and Economic Growth in Kenya

Abstract

The study sought to investigate the impact of government social cash transfers to economic growth in Kenya. Government social cash was the independent variable it includes orphans and vulnerable children cash transfers, aged people cash transfers and individuals with severe disabilities cash transfers, the dependent variable was the economic growth while inflation rate was the control variable. The goal of this study is to determine the impact of government social money transfers to economic growth in Kenya. The study was premised on a conceptual framework which in argues that cash transfers have an effect on economic growth in Kenya by increased protection of assets and encourage investment among other issues. Three theories were used in the study’s theoretical framework. The three were the Public choice theory of distribution, neo-classical theory and social capital theory. Secondary data used was obtained from the relevant ministries. There was data collection and was analysis by using descriptive and inferential statistics. Data was obtained and analyzed for the period between 2010 and 2017. The effects revealed that there was an overall strong and positive relationship (R= 0.721) between the government social cash transfers variables and economic growth. The result of the study further indicates that the value of the adjusted R-squared was 0.520. This implies that the government social cash transfers variables can account for 52% of the changes in economic growth. In relation to the study findings which indicate a positive effects of social money transfers remittance on economic growth, the Government is required to create an environment that will reassure the increase CT to the needy. This can be acquired through creation and implementation of policies that favors the increase in remittance inflows comprising of low taxation charged on remittances and effective and cost effective on transfers of these resources.