Kenya Revenue Sharing Formula: Equity, Win-Win and Affirmative Action Approaches Dangerous

Published on 8th September 2020

Kenyans are embroiled in brutal ideological war. In what has shaped up as a war of ideas, there seems to be two camps: (a) those championing the “One Man, One Shilling” formula for revenue share; and (b) those resisting the “One Man, One Shilling” coalition. In this article, I intend to focus on demystifying the use of “equity, win-win and affirmative action” ideologies by anti “One Man, One Shilling” coalition as an unimpeachable principle for engineering a better society.

Equity does not mean that the interest of the majority should be ignored in favor of the minority. Equity is a disposition of being fair and impartial. How can fairness and impartiality prevail if the interest of the majority is disregarded to please the minority? 

In my opinion, the current arguments on resource allocation premised on the principle of equity are loaded with serious misunderstanding of economics. Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. In this case, we can simplify and see equity when (a) the area with more people, especially economically active gets more;(b) allocating more in the area where there is greatest potential of higher return on investment and (c) allocating more to those demonstrating best use of previous allocation.

In my judgment the argument for allocating more resources to counties with less population is premised on the presumption that more resources will help those counties catch up with the populous counties in terms of development. This is an economic fallacy because it has been demonstrated over and over that while we can force opportunities on people, we cannot force outcomes. Equal opportunity does not yield equal outcomes. Even holding back one group as you push the others to catch up doesn't equalize individuals or groups. 

The failure to concretely demonstrate that “equal opportunity = equal outcome” remains a serious indictment of equity as a principle for achieving public good. Uganda's former ruler, President Idi Amin Dada’s confiscation of Indians' properties and wealth to hand over to native Ugandans was social engineering of economics based on equity. Did it work to make the beneficiaries productive? It worked to make the victims less productive. The Indians however bounced back into innovations and entrepreneurship and restored their productivity and consequent prosperity. In Germany, the Nazi regime victimized the Jews. It confiscated their resources and turned them into a commonwealth (euphemism for equal outcome, an aspect of socialism and in extreme application it becomes communism). Did the confiscation of Jewish wealth stop them from reemerging and going on to become wealthy globally?  

In Kenya, the application of equity has seen resources taken from populous areas and given to areas to areas with little population in the name of trying to equalize outcomes, but seven (7) years later, there is very little to show as an outcome. Areas that enjoyed skewed resource allocations have continued to bleed their population to areas that receives less allocation. Isn't it strange that the migrations have always been away from areas that received large allocation of resources?

In ordinary government economics of population, areas that host large population require more government goods and services and corresponding to that is requirement of more allocation. Then, what is the logic behind allocating comparatively less resources to densely populated areas as more resources are allocated to sparsely populated areas? 

If you listen keenly to the anti- One man, One Shilling arguments, it is very clear that the thought pattern of this position is framed around ‘affirmative action’ ideology. Generally, public policy should be guided by cost and benefit analysis. Devoid of the cost and benefit analysis, affirmative action will breed easy resources/money for corruption, balloon the government’s wage bill, punish those who did not cause or benefit from injustice and reward those who did not suffer the injustice.

There is also another revenue share formula dubbed “win-win” which continues to peddled by a section of politicians. Win-win has the appeal of an altruistic approach. Its outcome always ends up in “double the pleasure or double the fun.” However, there is a big problem whenever win-win becomes a way of thinking about public affairs and social change. According to the win-win frame of thinking, the only change that doesn’t ruffle feathers, doesn’t annoy ‘do-gooders’ and that is acceptable is the change that gives something to the weak, never mind at whose cost.

Behind the anti-One Man, One Shilling revenue sharing formula, it appears there are two kinds of politicians: (a) the genuine self-interested politicians from counties that are likely to get reduced revenue and hence their legitimate resistance noise; (b) the political predators who are salivating at gaining national fame from preying on misunderstanding or lack thereof understanding on the dangers of continued illogical economics perspectives.

In conclusion, it is important to note that this essay has not delved into the merits of affirmative action, win-win and equity as the worth is comparatively insignificant to the costs. Also, the essay is not exhaustive in pointing out the follies inherent in public policies backed by affirmative action, win-win and equity as dominant principle. Most importantly, the essay has belabored to underscore the fact that the magnitude of unintended consequences that arises from these ideologies has in many cases exemplified cases where the medicine is worse than the disease. Therefore, analyzed carefully, it appears that almost all affirmative action, win-win and equity policies are sinister, dangerous and irresponsible use of resources.

By George Nyongesa

The author is senior associate at the Africa Policy Institute, Nairobi, Kenya. Twitter: @GeorgeNyongesa Email: [email protected] Tel: +254 720 451235

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