DP18059 Decentralization, Ethnic Fractionalization, and Public Services: Evidence from Kenyan Healthcare
This paper examines the impact of ethnic fractionalization on public service use by exploiting a major constitutional reform in Kenya. Following an important period of inter-ethnic conflict, responsibility for local health services was decentralized to 47 newly created county governments. Using an event-study design, we find that use of public clinics for births increased significantly after the reform, but only in counties that were relatively ethnically homogeneous. We also find a significant increase in the correlation between county ethnic fractionalization and a range of other measures of public health service use. Services in these counties are also less likely to require payments after decentralization. Using within-county variation to investigate mechanisms, we find healthcare use increases were concentrated among areas and individuals of the same ethnicity as members of the new county government executives. Overall, the results suggest that more ethnically homogeneous sub-national jurisdictions can rapidly increase public service use.