Donor Contracting Conditions And Public Procurement: Causal Evidence From Kenyan Electrification
National Bureau of Economic Research
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Abstract: This research paper investigates how donor-imposed contract structures affect public infrastructure delivery using Kenya?s Last Mile Connectivity Project as a case study. The African Development Bank used bundled contracts, while the World Bank adopted unbundled contracts combined with monitoring. Using engineering assessments, randomized audits, and quantitative analysis across 380 villages, the study finds unbundled contracts improve construction quality but slow project completion, while monitoring enhances effectiveness within bundled models. The paper develops a conceptual framework to balance speed, cost, and quality, and analyzes trade-offs associated with donor preferences. Long-term cost-benefit implications and accountability mechanisms are explored, with recommendations for optimizing procurement models in low- and middle-income countries. It presents robust statistical evidence and policy insights into the effectiveness of infrastructure contracting in achieving development goals, providing valuable contributions to debates on aid delivery, institutional capacity, and public finance management.