Causal Effects of Cooperative Business Finance Reform on Institutional Accountability in Uganda: A Difference-in-Differences Design

Cooperative financial institutions in Uganda have undergone significant regulatory reform aimed at enhancing their viability and oversight. Yet, whether these reforms have produced measurable improvements in institutional accountability remains an open empirical question, largely because prior assessments have relied on descriptive or pre-post comparisons that cannot separate reform effects from concurrent economic and political changes. The design exploits the phased rollout of compliance requirements, comparing early-adopting cooperatives with those that remained under the previous regulatory regime. The analysis specifies a two-way fixed-effects estimator with cooperative and time fixed effects, and it addresses potential bias from non-random treatment timing through robustness checks using stacked difference-in-differences and synthetic control methods. The framework proposes that reform effects operate through three mechanisms: enhanced board oversight, mandatory external audits, and strengthened member grievance procedures.