This paper examined the impact of institutional factors on poverty in Kenya using household
survey and district level secondary data. The analysis focused on the FGT and consumption
based measures of poverty. Both descriptive and econometric methods were employed. The
results suggest that education attainment, assets and family composition are important
correlates of poverty. We also found that except for parliamentary representation,
institutional factors were important correlates of poverty when welfare is measured through
consumption expenditure, but the results were not robust when welfare was measured
through the FGT measures, confirming that consumption functions may be a better approach
to measure welfare than poverty functions. The results call for policies that target poor
households and regions less endowed with institutions in order to reduce disparities in
poverty.