Effects of Council Related Internal Determinants on Financial Sustainability of Selected Local Government Authorities in Tanzania. A Moderating Role of Good Governance.

Mlay, Elimbinzi E. (2024) Effects of Council Related Internal Determinants on Financial Sustainability of Selected Local Government Authorities in Tanzania. A Moderating Role of Good Governance. Doctoral thesis, The Open University of Tanzania.

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Abstract

This study examined the Council-related internal determinants of financial sustainability of selected local government authorities in Tanzania using good governance as a moderating variable in knowledge advancement. Study objectives were; to examine the effect of financial planning , financial monitoring and financial control on financial sustainability. Also, the moderating effect of good governance on the relationship between financial management practices and financial sustainability was examined. The study applied agency theory and Institutional theory. It employed a survey strategy with a total of 330 respondents. Structural Equation Modelling (SEM) was used for data analysis. The results revealed that financial planning, financial monitoring and financial control have positive and significant relationships with financial sustainability. The multi-group analysis confirmed positive moderation of good governance on both paths of financial monitoring and financial control on financial sustainability. The practical implication of the findings is that, institutions that promote effective financial planning, monitoring, and control contribute to long-term financial sustainability, and that prioritizing governance reforms in local government, including transparency measures, oversight mechanisms, and citizen engagement. It underscores that effective governance structures can strengthen the alignment of interests between principals (citizens, taxpayers) and agents (local government authorities), leading to better financial outcomes. Keywords: Financial Sustainability, Local Government Authorities, Good Governance, Financial Controls

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