The Effects Of Corruption As An Economic Crime On Economic Growth And Implications On National Security In Kenya, 2005-2016

Abstract

The goal of this thesis is to explore the effects of corruption as an economic crime on economic growth and its implications on national security in Kenya in the period 2005-2016. While Kenya is faced with myriad of endemic economic crimes that increase in magnitude and dimension daily that have devastating effects on the wellbeing, security and consequently the economy, in particular, there has been an apparent surge in the number and magnitude of corruption cases. And yet there is a dearth of literature linking corruption as an economic crime to economic growth. Additionally, few studies if any have attempted to wade into the trilemma of the nexus between corruption, economic growth and national security thereby leaving a huge literature and methodological gap. Specifically, the study addressed three objectives; first, to examine and analyze the effect of corruption on Kenya’s economic growth. Second, the study sought to examine and analyze the security implications of corruption in Kenya. And third, the study sought to examine and analyze the apparent growth of corruption notwithstanding a wide range of Government measures to counter it. To achieve these objectives, the study sought to respond to the question how does corruption affect Kenya’s economic growth; what explains the apparent growth of corruption notwithstanding a wide range of Government measures to counter it; and what are the security implications of corruption in Kenya? The central arguments in this study is that corruption undermines economic growth through a wide range of negative political, economic, military, societal and environmental effects it engenders; The argument underlying this increase in corruption is corruption derived in relation to the cost incurred. The net effect of this are the national security threats. In advancing the central arguments, the study adopted Barry Buzan’s framework which states that security can be undermined by factors from different sectors namely military and social political factors. The study was underpinned on the classical growth theory by Adam Smith, Thomas Malthus, David Ricardo, François Quesnay, John Stuart Mill and Karl Max which posits that high level of corruption represents a leakage from the economic systems and therefore distorts capital accumulation and the allocation of public resources in form of public investment resulting in disruption of income distribution. To close the literature and methodological gaps, the study employed explanatory research design to examine the relationship between corruption as an economic crime and economic growth in Kenya. The study utilized both primary and secondary data from the Kenya National Bureau of Statistics, (KNBS), Global Financial Integrity, World Bank and Transparency International from the period 2005 to 2016. Findings from the study led to the conclusion that Kenya’s economic performance has been negatively affected by corruption and that deterioration of national security is partly on account of corruption.