Budgetary Institutional Adjustments and Fiscal Discipline in Local Government: An Assessment of Entity Location Mediation

Abstract

For quite a long time, budgetary institutional adjustments have been implicated as important determinants of fiscal discipline in local government. Moreover, entity location has been argued a pivotal and influential factor in the budgetary institutional adjustments-fiscal discipline linkages. However, to date no research is conclusive enough on what precisely explains budget discipline especially in Sub-Saharan Africa-based localities. On the basis of a cross-sectional research design, this study investigated the budgetary institutional adjustments-entity location-fiscal discipline triangulation in Uganda, East Africa. Data were collected from 26 districts, 9 municipalities and a number of sub-counties spread across four purposively-selected geographical regions of the country. The regions are north-western, northern, north-eastern, and eastern. Data were then subjected to both regression and structural equation modeling statistical analysis. Notably, results from structural equation modeling revealed that budgetary institutional adjustments have strong predictive power on fiscal discipline. Conversely, entity location does not have any influence on the budgetary institutional adjustments-fiscal discipline relationship. Theoretical and practical implications from the findings are discussed.