Fiscal Federalism in Support of Public Social Capital through Government Entity Investiagtion

Abstract

Past research considers both fiscal federalism and entity governance principle determinants of local government social capital. However, no study is conclusive enough on this point. Guided by social capital theory, this study surveyed 28 districts, 5 municipalities, and 311 sub-counties of Uganda’s north-eastern and eastern regions to investigate fiscal federalism-entity governance-social capital linkages. Structural equation modeling results reveal resource utilization, bureaucracy, and corruption; prominent fiscal federalism attributes, social capital predictors. Its other equally-vital component; job creation, depicts no predictive powers. Moreover, entity governance mediates the fiscal federalism-social capital relationship. Implications of these findings to both theory and practice are discussed.