Briefing Paper

Inequality, Poverty, Growth and Institutions: Understanding the Linkages in Kenya

“This Brief analyzes the linkage between inequality, poverty and economic growth in
addition to assessing the extent to which growth in Kenya has been pro-poor. It also
explores the link between institutions, poverty and inequality. The macroeconomic
indicators show that economic growth in Kenya recorded an upward trend between 1994
and 1996 but dropped significantly in 1997. This was followed by a period of impressive
recovery up to 2007. During the same period, poverty increased by 13% between 1994
and 1997, but declined by about 5% in 2005/6. Inequality however increased over the
period, frustrating the impact of growth on poverty reduction.”