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The Private Provision of Public Goods in Kenya

December 19, 2011
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The Adam Smith Institute has published an excerpt from a project I’ve been working on based on research in Kenya’s ‘informal sector’. The article is about private security firms that provide security subscription packages, run a full service fire company and, yes, deliver the mail. Those interested in competitive governance may find it interesting:

For BABS, security means much more than guards and cameras. Kenya’s dysfunctional State has failed to provide many services traditionally considered the purview of “public” authorities. BABS runs a growing courier service, delivering domestic and international mail. I ask Ouma what a person could have delivered. “Anything,” he retorts nonchalantly.

BABS also consults for companies to protect themselves against industrial espionage and even helps industry comply with safety and health regulations. BABS has a staff of private investigators and can even be hired to do forensics: physical and digital.

More surprising still, they supply and maintain all the equipment and staff necessary to operate a full-service firefighting outfit. Contracts are typically annual and tied to individual properties – not neighborhoods or cities. BABS will work with your insurance company to lower premiums if you take out a contract with their fire service, since some municipal services are unreliable or just nonexistent.

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3 Comments
  1. December 20, 2011 8:56 pm

    I’d be curious as to what proportion of the population can afford it.

    • Z. Caceres permalink
      December 20, 2011 10:35 pm

      You are absolutely right to point this out. BABS and other firms are usually employed by formal businesses or wealthy Kenyans/Ex pats. One of the great tragedies in Kenya is that the average person is either too poor and/or too poorly represented legally to take out a contract with a firm like BABS. They do benefit from some of the spillovers of the firms, however.

      Also, the State courts and police do an extremely poor job providing these services to the average Kenyan, so it’s not just a firm like BABS that is not serving ‘the masses’. This means many Kenyan communities rely on brutal vigilante justice and other informal means like ostracism of keeping violence at a minimum.

      The article is by no means an endorsement of the way things are as an optimal arrangement, just a description of what is and how it contradicts some standard theoretical ideas.

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