was at 3.4% . In subsequent periods they did not have the same rates, they decreased to 0.25% between 1973 to 1984 and 0.54% in 1984-1994 . The reasons for the dramatic change are based upon many things that are no longer true in Kenya. Kenya was still a colony of England until December 12, 1963 and was able to benefit from the infrastructure and direction that the British had established. Management techniques were important to the newly independent country, such as the state corporations which allowed for the education of Kenyans under former British rule. The effects of England's contribution are often overlooked but they are still applicable. As a colony of England, Kenya had credibility in the international capital market. Instead of being seen as a third world country with crippling problems, they had England to defend and help them. Exchange rates were held at a fixed level simil!
             ar to the Bretton Woods system that was used by many other countries at the time. Because the Kenyan Shilling was fixed to the British Pound there was no fear of inflation to frighten potential investors away, this carried on for 10 years after the separation of the two countries.
             Another policy established to aid Kenya in its attempts of industrialization was the policy known as Import-Substitution Policy (ISI) , which still is being used by Kenya today. This was an essential policy for domestic capital markets; as it helped to create them. The policy is as the name would indicate, a mercantile strategy which prefers domestic goods to imported goods. Dani Rodrik states that for developing countries, "...[this policy] created a protected and thereby profitable domestic entrepreneurs to invest in." It is this sort of policy that I am arguing for, but a policy where there is more market interaction would be best. The emerging mercantilist policy posed many problems for most developing countries, the long-term effects o...