The proposed Kenya Airports Authority (KAA) merger with cash-strapped Kenya Airways eyes public assets to be extracted from taxpayers. The answer to the Privately Initiated Investment Proposal (PIIP) is that it can succeed and profit Kenya. The devil is in technical details of the methods used.
Forget about concise measurements. Some economic concepts are grasped intuitively even by Wanjiku. The term positive externalities in public subsidies tests the use of public resources to drive private activities on mainly three considerations: Who foots the bill of the subsidy (e.g. tax rebates, land grants, worker-friendly infrastructure like minimum wages, mass transit and housing); where do beneficial spillovers accrue; and, how does the subsidy address inefficiencies in the assistance.
