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Public Enterprise in Kenya: What Works, What Doesn't, and Why

Barbara Grosh
ISBN: 978-1-55587-209-0
1991/223 pages/LC: 91-20375

"Much information and many insights about public enterprise performance in Kenya."—Canadian Journal of African Studies

"This very good book maintains its core focus while covering the topic with both admirable breadth and significant depth.... Anyone interested in the political economy of Africa should read this book."—Perspectives on Political Science

"Provides new insights and avoids the pitfalls that have characterised many past analyses of parastatals or public enterprises, particularly in Africa.... I recommend Barbara Grosh's study to anyone interested in an objective, well-researched understanding of the performance and problems of public enterprises, not only in Kenya, but the rest of Africa."—Modern African Studies

"A very important contribution to the public enterprises debate in Africa. A must for policy makers, economics, and policy analysts."—The Journal of Commonwealth and Comparative Politics

"Barbara Grosh's study is filling a vacuum. Her pioneering effort is enhanced by the comprehensive and longitudinal nature of the investigation. The result is a more nuanced picture of these enterprises and a greater appreciation of the many factors that shape their performance."—American Political Science Review


Central to the development strategies of virtually all the sub-Saharan economies, public enterprises are nonetheless perceived as inefficient and unprofitable. Barbara Grosh examines the public enterprise system in Kenya and shows that, while average performance has indeed been poor, there has been a broad range of results—from excellent to abysmal—and many firms have performed well for long periods.

Grosh uses four indicators (profitability, efficiency, prices paid to suppliers, and consumer prices) to assess which firms performed well, which had problems, and when and why those problems developed. Covering 1963-1988, data is provided for seventeen firms in the agricultural sector, four in finance, seven in transport and communications, and five in development finance. In addition, thirty publicly owned manufacturing firms are compared with forty private ones.

She concludes that neither privatization nor policies designed to bring firms and their managers under control—approaches gaining popularity with African policymakers—is likely to solve the problems. She concludes also, however, that most of the problems are susceptible to limited and feasible reforms, and that public enterprise performance can be improved.


Barbara Grosh is assistant professor of Public Administration at the Maxwell School, Syracuse University. She is also coedited (with Rwekaza Mukandala) State-owned Enterprises in Africa.


  • The Crisis in Africa and the Search for Solutions.
  • The Public Enterprise Problem in Kenya.
  • The Agricultural Sector.
  • The Financial Sector.
  • Development Finance Institutions.
  • The Infrastructural Parastatals: Transport, Communications and Electricity.
  • The Public Enterprise Problem in Kenya Revisited.