Behavioural antecedents influencing the intention to adopt innovative financing instruments: evidence from Tanzanian local government authorities

Innovative financing instruments (IFIs) such as municipal bonds are increasingly considered as a means to expand fiscal space for infrastructure, yet adoption of IFIs in Tanzanian local government authorities (LGAs) remains limited. This study, therefore, examines the behavioural antecedents shaping LGAs’ intention to adopt IFIs, focusing on City and Municipal Councils. Guided by an extended Theory of Planned Behaviour (TPB), the study tests attitude, subjective norms, perceived behavioural control and perceived relative advantage as predictors of intention. A cross-sectional survey was conducted with 255 respondents drawn from 26 LGAs and analysed using PLS-SEM (SmartPLS 4). The structural model explains a substantial share of variance in intention (R2 = 0.609) and shows out-of-sample predictive relevance, as all Q2predict values are positive. Bootstrapping (5,000 resamples) indicates that all hypothesised relationships are positive and statistically significant, with attitude emerging as the strongest driver of intention. IPMA results further suggest that improving attitude offers the highest leverage, while subjective norms show relatively low performance despite their importance. The findings imply that scaling IFIs in LGAs requires strengthening favourable evaluations of IFIs, improving implementation capability, and providing clearer, consistent legitimacy signals across the intergovernmental system.