ABSTRACT
The World Bank has supported Kenya in financing development projects in transport, energy, water, urban development, health, public sector management and social protection since 1960. By November 2011, it had financed more than 175 projects with a total investment of over US$ 7,070 billion. Sustainability of the funded projects is of utmost importance if the impact of funding these projects is to be realized. Despite project feasibility studies being done prior to commencement of the projects, sustainability is still not guaranteed. This study investigated the determinants of sustainability of World Bank funded projects in Kenya, with the specific objectives being: to determine the institutional, technical, political and economic factors that influence sustainability of World Bank funded projects in Kenya. The study adopted both cross-sectional and explanatory research designs. The targeted projects were all projects funded between the years 2000 and 2012, the period was considered appropriate because, typically, international development projects last from three to ten years. The study targeted 65 respondents of which 51 successfully filled and returned the questionnaires. The respondents comprised of project managers and project monitoring and evaluation officials from implementing organization and officials from the National Treasury in charge of monitoring the donor funded projects in Kenya. Data was collected by use of structured and semi structured questionnaire then analyzed using both descriptive and inferential statistics to determine the effect of economic, institutional, technical and political factors on the sustainability of World Bank funded projects in Kenya. Principal component analysis was carried out using factor analysis method to establish the most critical factors among the ones identified, and Logit regression analysis was used to determine the influence of various factors on sustainability of World Bank funded projects in Kenya. Prior to Logit regression analysis, multi collinearity test was carried out to determine whether the identified variables were correlated. Content analysis was done for open ended questions. The results of the study established that the coefficients of institutional and technical factors were significant and thus these factors determine project sustainability while the coefficients of economic and political factors were found not to be significant at 5 percent level. It was recommended that capacity building needs to be done by all project implementers and be incorporated in project design. In addition, the World Bank should ensure that the project documents capture sustainability as one of its key criteria for approval for project funding. The government of Kenya through the National Treasury should ensure that a plan to include all stakeholders in project sustainability is in place before releasing the funding for the project.
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CHAPTER ONE INTRODUCTION
Background of the Study
Role of Projects in Economic Growth
Development projects, especially those financed by international development aid, play a vital role in the socio-economic development of developing countries (Khang and Moe, 2008). According to the United Nations Development Program (2004), the 49 least developed countries in the world received US $ 55.15 billion in Official Development Assistance (ODA) in 2004 which is equivalent to 8.9 percent of their total gross domestic product. Khang and Moe (2008) noted that the success of the financed projects determines the socio-economic progress in the recipient countries.
Development projects provide socio economic assistance to developing countries, and in most cases the deliverables are not tangible. The intangibility of the project objectives and deliverables raises special challenges in managing and evaluating their performance. There is need to adapt new tools and concepts to define, monitor and measure the extent to which development project achieve their envisioned objectives (Khang and Moe, 2008). The objectives of development projects funding concerns poverty alleviation and the improvement in the living standards, environmental protection, basic human rights protection, assistance for victims of natural or people-
caused disasters, capacity building and development of basic physical and social infrastructure (Khang and Moe, 2008).
Each year, the World Bank lends between US$15 to US$20 billion for projects in more than 100 countries in the world. These projects are conceived and supervised according to a well-documented project cycle (World Bank, 2004). In line with the bank‟s development policy, the Bank helps the respective governments take the lead in preparing and implementing development strategies as per country‟s national priorities. The World Bank has supported Kenya since the financial year 1960/61 with total World Bank commitments to Kenya being about $4.2 billion between 1960 and the year 2011 (World Bank, 2004).
