The effectiveness of financial governance practices on the environmental performance of the municipalities in developing countries

Abstract

The paper examines the relationship between municipal financial management practices (MFMPs) and environmental performance (EP) in South African municipalities (SAMs). The need for study is driven by prevailing EP challenges, as exhibited by poor waste management practices in the local municipalities (Bikam & Chakwizira, 2021). To achieve this objective, the study employed robust standard errors to analyse panel data collected by quantitative content analysis from online sources regarding thirty SAMs during the period spanning 2014 and 2023. The study found a positive, insignificant relationship between MFMPs and EP. The study’s findings have crucial implications for many stakeholders, including policymakers, the national government, and local municipalities, as the need to review and enforce compliance with the existing financial management framework remains pertinent to addressing environmental challenges. The study’s findings influence decisions on MFMPs, as a commitment to managing the ecological environment, which presents an additional dimension of addressing waste management challenges. Therefore, future research must aim to broaden this agenda, which remains imperative to promoting sustainable environmental management practices (EMPs) from a financial management perspective.