| Abstract: | This paper examines constraints to growth in developing countries in the context of the two-gap model (i.e. the trade and the savings gap). An attempt is made to ascertain empirically which of the two is a binding constraint for Kenya. The paper also proposes a three-gap model by introducing recurrent cost. The paper concludes that between 1964 and 1990 Kenya's development was constrained more by the trade than by the savings gap; that inadequate operation and maintenance expenditures delay the full realization of GDP growth rates and lower the targeted levels; that whereas high levels of savings and investment ratios directly influence the growth rate of GDP, unchecked high levels of investments may induce a recurrent cost constraint; that striving to achieve high levels of growth without clear vision on both the productivity of investments and the resulting recurrent cost requirements may at best delay and at worst lower the realization of growth targets. App., bibliogr., notes, ref., sum. |
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