Leadership Development, Capacity Building and Employee Performance in Devolved Government: The Moderating Role of Government Policies in Kenya's Lake Region Economic Bloc

ABSTRACT : Effective leadership development and capacity building are increasingly important for strengthening employee competence, productivity and service delivery in devolved government. However, the effectiveness of leadership development does not occur in isolation; it is influenced by organizational systems, institutional resources and the policy environment within which county governments operate. This study examined the effect of leadership development and capacity building on employee performance and assessed the moderating influence of government policies on the relationship between leadership development and employee performance in Kenya's Lake Region Economic Bloc (LREB). The study was conducted in five counties: Kisumu, Kakamega, Nyamira, Homa Bay and Migori. Leadership development was examined through leadership-development programmes, programme availability and effectiveness, leadership-skills development, post-training improvements and barriers to leadership development. Capacity building was examined through workshops and seminars, on-the-job training, mentorship, frequency of capacity-building activities, alignment with job roles, evaluation mechanisms and budget allocation. Government policies were examined as a moderating variable. The findings demonstrate that leadership development significantly contributes to employee performance. Leadership-programme effectiveness was the strongest predictor of employee productivity, followed by programme availability, leadership-skills development and observed post-training improvements. Barriers to leadership development had a significant negative influence on employee performance. The overall leadership-development model was statistically significant and explained approximately 52% of the variance in employee performance. Capacity building was also found to be an important determinant of employee performance. Workshops and seminars, frequency of capacity-building activities, on-the-job training, alignment with job responsibilities and evaluation mechanisms had significant positive effects on employee performance. The capacity-building regression model was statistically significant and explained 52.4% of the variance in performance outcomes. Mentorship programmes and budget allocation showed positive but statistically marginal effects. Most importantly, government policies significantly moderated the relationship between leadership development and employee performance. Leadership development alone explained 43.7% of the variance in performance; the inclusion of government policies increased the explanatory power to 50.7%, while introduction of the leadership development × government policies interaction increased R² to 55.0%. The final interaction model was statistically significant (F (3, 37) = 12.61, p = 0.003), and the interaction coefficient was positive and statistically significant (β = 0.194, p = 0.011). The study concludes that leadership development and capacity building are important strategic human-resource interventions in devolved government, but their effectiveness depends on supportive policies, adequate resources, equitable access, institutionalized mentorship and succession planning, and systematic monitoring and evaluation.