A multigroup structural equation modelling framework for evaluating participatory budgeting and financial sustainability across age cohorts

Cliff Richard Kikawa; Amos Ssematimba; Sarah Nakero; Dimas Ntirampeba

doi:10.51867/ajernet.7.4.75

Authors

Cliff Richard Kikawa Kabale University, Uganda https://orcid.org/0000-0003-0219-4702
Amos Ssematimba Gulu University, Uganda https://orcid.org/0000-0002-5407-2478
Sarah Nakero Kabale University, Uganda
Dimas Ntirampeba Namibia University of Science and Technology, Namibia https://orcid.org/0000-0002-6278-8134

DOI:

https://doi.org/10.51867/ajernet.7.4.75

Keywords:

Financial Sustainability, Local Government, Participatory Budgeting, Public Financial Management, Structural Equation Modelling

Abstract

This analysis focused on the impact of participatory budgeting (PB) procedures and budget implementation on financial sustainability (FS) in local governments in Uganda, specifically budget approval. The analysis employed direct correlations within a structural equation modeling (SEM) framework and assessed the moderating effect of employee age groups. Confirmatory factor analysis confirmed the instrument’s validity and reliability, and the structural model demonstrated an excellent fit: CFI = 0.986, TLI = 1.000, RMSEA = 0.000, SRMR = 0.015. The results show that PB procedures have a strong impact on financial sustainability, and that most reliable indicators are budget implementation. Although some age groups showed considerable path changes, age only had a small and inconsistent moderating influence on PB–FS correlations, according to multigroup SEM moderation analysis. The results indicate that institutional capacity, accountability and transparency has a greater influence on the effectiveness of PB than personnel demographics. The study provides practical recommendations on the design of context-sensitive PB systems, and also adds empirical evidence to the debate on local public financial management reforms in emerging countries. In order to improve the sustainable fiscal performance, the recommendations are: strengthening the surveillance framework, strengthening technical capacities in budgeting procedures, and increasing the capacity-building initiatives.

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