Influence of Transparency and Accountability on Public Sector Financial Performance: Evidence from Tanzania
Mwanjaa Said Lyezia *
Department of Accounting and Finance, The Open University of Tanzania (OUT), Dar es Salaam, United Republic of Tanzania (URT).
Saganga M. Kapaya
Department of Accounting and Finance, The Open University of Tanzania (OUT), Dar es Salaam, United Republic of Tanzania (URT).
*Author to whom correspondence should be addressed.
Abstract
The current study intended to examine the direct influence of accountability and transparency on public sector financial performance, as the result of the adoption of accrual-based International Public Sector Accounting Standards (IPSAS) in Tanzania. Guided by New Public Management Theory (NPMT), a cross-sectional survey design was applied in collecting data from 178 public sector entities in Tanzania. This was achieved by the application of a drop-and-pick approach. Partial Least Squares-Structural Equations Models (PLS-SEM) were employed in determining the relationship between hypothesized constructs. It was found that accountability has a positive and significant influence on financial performance while transparency has an insignificant. Since accountability and transparency affect the livelihood of the Tanzanian communities and others, the findings of the current study create social implications related to accountability and transparency, on the way public officials use public resources in the provision of various social services.
Keywords: Accountability, transparency, accrual-based IPSAS, new public management theory, public sector financial performance, Tanzania