Effectiveness of Constituency Development Funds on Poverty Reduction with Respect to Consumption and Human Capital (A Case of Hamisi Constituency)

Abstract

The purpose of introducing the Constituency Development Fund (CDF) was to expedite development projects for the benefit of citizens at the grass root level. This programme provides an opportunity for local population to make their decision that maximizes their welfare. It generally empowers the local community to drive their development agenda and reduce poverty. This study analyses the effectiveness of Constituency Development Funds (CDF) in reducing poverty. To this end, the paper attempts to establish impact-link between CDF funds and community welfare as explained by levels of household consumptions and development of human capital through increased incomes, improved health care and improved educational services. Using probit models to test the relationships, the findings of this study show that there exist positive and significant relationship between the dependent and independent variables implying that introduction of CDF has significantly reduced poverty as explained by the welfare elements in this paper. The study therefore concludes that government should consider increasing allocation for CDF to enhance poverty reduction efforts. This however should be tampered with effective management and control of the fund through good governance systems in order to optimize its benefits to the community.