Moderating Role of Legal Framework on the Effect of Resource Mobilization Reforms on Financial Performance of County Governments in Kenya

This study examined the effect of resource mobilization reforms on the financial performance of county governments as well as how legal frameworks could moderate this relationship. The study was grounded on New Public Management theory. The research followed a positivist research philosophy and utilized a correlational research design. The target population was the 47 county governments in Kenya which were clustered into seven regional blocs. A county with the least budget absorption rate as per the controller of budget report of 2023 was picked per regional bloc. The top and middle-level management employees in the Department of Finance and Economic Planning were selected resulting in 229 target respondents upon which a sample size of 144 was determined based on Krejcie and Morgan. A pilot study was carried out to determine the reliability of the instrument. Data was analyzed using SPSS Analysis of Moments Structure (AMOS), employing principal component analysis and confirmatory factor analysis to evaluate the associations between latent variables. Structural equation modelling was undertaken to evaluate any inherent relationship between the study variables. Results revealed that resource mobilization reforms had a statistically significant effect on the financial performance of county governments (β=0.566, t=3.390, p<0.05). Legal framework also had a significant moderating effect on the relationship between resource mobilization reforms and this performance (β=0.189, t=2.283, p<0.05). The study concludes that resource mobilization reforms are a driver of devolved governments in Kenya. Improving such performance therefore calls for additional reforms focusing on mobilizing more resources.