Digital financial inclusion and fiscal solvency in Uganda’s local governments: A review of regulation mediation
DOI:
https://doi.org/10.22437/ppd.v8i6.8861Keywords:
Digital financial, Fiscal solvency, Local governmentAbstract
Fiscal solvency has become a popular phenomenon in numerous decentralizing countries in recent years. The ability to mobilize adequate revenue to fund expenditure in a given budget period, and provide public goods and services, makes fiscal solvency very pertinent, especially in local government. However, policy, practice, and research, claim that most local entities, both in the developed and developing world, rarely achieve required fiscal solvency standards. While no clear explanation of the problem abounds, digital financial inclusion dominates the ongoing debate. Besides, regulation is also considered a very crucial factor for fiscal solvency. This study examines the probable mediation effect regulation has on the digital financial inclusion-fiscal solvency relationship in local governments in Uganda, East Africa. Based on a cross-sectional research design, data were collected from 21 districts, nine municipalities, and many sub-counties in the country’s post-conflict northern regions. The data were then subjected to structural equation modeling analysis. Its findings reveal that digital financial inclusion explains changes in fiscal solvency in surveyed local governments. Moreover, regulation has an indirect influence on the digital financial inclusion-fiscal solvency formation. Findings implications to practice and theory are discussed, and future research direction is provided
Downloads
References
Alesina, A., Baqir, R. & Easterly, W. (1999). Public Goods and Ethnic Divisions. Quarterly Journal of Economics, 114(4), 1243–84.
Arzaghi, M. & Henderson, J. (2005). Why countries are fiscally decentralizing. Journal of Public Economics, 89, 1157–1189.
Barrett, P. (2007). Structural Equation modeling: Adjudging model fit. Personality and individual Differences, 42(5), 815-824.
Baruch, Y. & Holton, B.C. (2008). Survey response rate levels and trends in organizational Research. Human Relations, 61(8), 1139-1160.
Bollen, K. A. (1990). Overall fit in covariance structure models: Two types of sample size Effects. Psychological Bulletin, 107(2), 256-259.
Cheung, G.W. & Lau, R.S. (2008). Testing mediation and suppression effects of latent variables: Bootstrapping with structural equation models. Organizational Research Methods, 11, 296-325.
Cohen, J., Cohen, P., West, S.G. & Aiken, L.S. (2003). Applied Multiple Regression/Correlation Analysis for Behavioral Sciences. Mahwah, NJ: Lawrence Erlbaum Associates Publishers.
Creswell, J. W. (2003). Research design: Qualitative, quantitative, and mixed methods Approaches (2nd ed.). Thousand Oaks, CA: Sage.
de Mello, L.R. Jr. (2000). Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis. World Development, 28(2), 365–380.
Gauthier, B. (2001). Productivity and Exports, in Reinikka, R. & Collier, P. (eds.), Uganda’s Recovery: The Role of Farms, Firms, and Government. World Bank Regional and Sectoral Studies, Washington, D.C. World Bank.
Gilbert, E. (2005). Common cents: Situating money in time and place. Economy and Society, 34(3), 357–388.
Green, K., Hull, R., McMeekin, A. & Walsh, V. (1999). The construction of the techno-
economic: networks vs paradigms. Research Policy, 28, 777–792.
Hanseth, O., Monteiro, E. & Hatling, M. (1996). Developing information infrastructure: The tension between standardization and flexibility. Science, Technology and Human Values, 21(4), 407-426.
Kenny, D. (2008). Reflections on mediation. Organizational Research Methods, 11(2), 353-358.
King, D. N. (1984). Fiscal Tiers: The Economics of Multi-Level Government, London: Allen & Unwin.
Lessman, C. (2012). Regional inequality and decentralization: An empirical analysis.
Environment and Planning A, 44(6), 1363–1388.
Madon, S. (2005). Evaluating the developmental impact of e-governance initiatives: An
exploratory framework. Electronic Journal of Information Systems in Developing Countries, 20(5), 1-13.
Morawczynski, O. (2009). Exploring the usage and impact of transformational mobile
financial services: The case of M-PESA in Kenya. Journal of Eastern African Studies, 3(3), 509-516.
Musgrave, R.A. & Musgrave, P. B. (1980). Public Finance in Theory and Practice, New York: McGraw-Hill.
Oates, W. E. (1972). Fiscal Federalism, New York: Harcourt Brace Jovanovich.
Olayinka, D-W. (2015). The path to digital financial inclusion in Nigeria: Experiences from FirstMonie. Journal of Payments Strategy and Systems, 9(4), 256-273.
Otenyo, E.E. & Lind, N.S. (2004). Faces and phases of transparency reform in local government. International Journal of Public Administration, 27(5), 287-307.
Phillips, L. & Ilcan, S. (2007). Responsible expertise: Governing the uncertain subjects of Biotechnology. Critique of Anthropology, 27(1), 103–126.
Preacher, K.J. & Kelley, K. (2011). Effect size measures for mediation models: Quantitative strategies for communicating indirect effects. Psychological Methods, 16, 93-115.
Prud’homme, R. (1995). The Dangers of Decentralization. World Bank Research Observer, 10(2), 201-220.
Reinnikka, R. & Svensson, J. (2004). Local capture: Evidence from a central government transfers program in Uganda. Quarterly Journal of Economics, 119, 679-706.
---- . (2006). Using micro-surveys to measure and explain corruption. World Development, 34(2), 359-370.
Salvador, T., Sherry, J.W. & Urrutia, A. E. (2005). Less cyber, more café; enhancing existing small businesses across the digital divide with ICTs. Information Technology for
Development, 11(1), 77-95.
Schneider, F. & Enste, D. (2000). Shadow economies: Size, causes and consequences. Journal of Economic Literature, 38, 77-114.
Sepulveda, C. & Martinez-Vazquez, J. 2011. The consequences of fiscal decentralization on poverty and income inequality. Environment and Planning, 29, 321–343.
Shrout, P. E. & Bolger, N. (2002). Mediation in experimental and non-experimental studies: New procedures and recommendations. Psychological Methods, 7(4), 422-445.
Talvi, E. & Végh, C. (2005). Tax Base Variability and Pro-cyclical Fiscal Policy in Developing Countries. Journal of Development Economics, 78(1), 156-190.
Thornton, J. (2007). Fiscal Decentralization and Growth Reconsidered. Journal of Urban
Economics, 61, 64-70.
Yakub, J.O., Bello, H.T. & Adenuga, I.A. (2013). Mobile money services in Nigeria: An inquiry of existing models. International Journal of Economics and Management Sciences, 7, 94-105.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Paul Onyango-Delewa, Isaac Nabeta Nkote
This work is licensed under a Creative Commons Attribution 4.0 International License.
