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DEMOGRAPHIC PATTERNS OF SOCIO-ECONOMIC NEEDS; INFORMING PUBLIC RESOURCE ALLOCATION CRITERIA IN KENYA

Resource allocation is an applied economic concept that emanates from the scarcity of resources due to limited supply has given the need to meet unlimited population needs and wants. Various means are used in allocating resources, including markets in free economies and planning through political processes in mixed economies. Modern macroeconomic theory and policy rest on the assertion of John Keynes's mixed economic system on the role of government in solving market problems and promoting welfare. Harvey, J. (1981), through his analysis of the relationship between public sector growth and labor force expansion, acknowledges economies embracing the case for public sector spending in providing adequate interventions to access public goods. The government in a mixed economy is constantly under pressure to quench the ever-growing demand for public goods and services to improve society's welfare level (Montibeller & Franco, 2011). The paradox of efficiently allocating public resources rests on fiscal budgets as a tool for public sector spending and determining the services' value for money financial expenditure avenues (Barroy & Gupta, 2020). The unique nature of a government in mixed economies is in its combination of markets and planning considerations in allocating resources to public goods and services, including healthcare, education, defense, and fire emergency services. According to (Nafziger, 2021), sufficient food, entrance to primary education, basic health services, adequate and consistent water supply, proper sanitation, and safe and affordable housing is the set of basic needs of a population fulfilled through public service in mixed economies. However, the considerations and deliberations that inform public resource allocation and distribution decisions vary from different factors that come into play to the weights attached to the mandatory and essential variables (Kakungu, 2013). Over time, empirical studies and rigorous research activities have been aimed at generating and improving existing resource allocation avenues to achieve more effective and efficient public spending within the government, the New Zealand (Treasury, 2018) study. Different governments have explored different approaches to allocate resources efficiently (Allain et al., 2015). The standard cost approach in resource allocation utilized in Australia is anchored on total expenditure broken down by function and jurisdiction; calculations on the average cost per capita of providing a particular service across different locations form the public resource allocation basis. Modifications of this approach have been applied in Japan and Sweden. 1Informing Public Resource Allocation Criteria in Kenya Local authorities in the United Kingdom apply a regression-based approach, an improved standard cost approach in resource allocation. A model of public resource allocation is determined by performing a regression analysis on explanatory variables such as population size, deprivation, and others that portray regional differences, which are viewed as needs indicators to explain past public spending variations (Dolan, Layard, & Metcalfe, 2011). Different approaches utilized include the Outcome-based method that is applied by Wale and the Bottom-Up cost approach for the Netherlands. Despite these deliberate efforts, no unanimous concession has been reached on how governments can efficiently resource allocation to maximize societal welfare

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Author: laureen mbuche karima
Contributed by: reagan lax
Institution: university of nairobi
Level: university
Sublevel: post-graduate
Type: dissertations