This paper investigates the causal pathways through which chronic fiscal indiscipline has precipitated the systemic collapse of public services in Uganda over the period 2000–2023. Combining a synthetic-control fiscal shock analysis with an original service-delivery scorecard covering 2,400 sub-counties, we estimate that every 1 percentage-point increase in the structural primary deficit is associated with a 0.78-point deterioration in an aggregate Public Service Performance Index (PSPI).

Disaggregated results:

Disaggregated results reveal that health and water services have contracted most severely (-1.13 and -0.97 PSPI points respectively), while education outcomes have stagnated despite rising enrolments.

Event-study estimates around three major shocks:

Event-study estimates around three major shocks—

(i) the 2006 election-cycle spending surge,

(ii) the 2011 oil-boom borrowing spree, and

(iii) the 2020 COVID-19 emergency disbursements

—show that non-concessional debt crowds out pro-poor recurrent budgets within four quarters, with effects persisting for at least five years.

Qualitative evidence

Qualitative evidence from 147 key-informant interviews across 18 districts corroborates the quantitative findings: frontline providers report chronic stock-outs of essential medicines, delayed teacher salaries, and collapsing rural road networks directly linked to arrears accumulation and off-budget expenditures.

Counterfactual simulation:

Finally, we simulate the counterfactual impact of enforcing a constitutional debt-limit rule coupled with a medium-term expenditure framework; the results indicate that Uganda could have averted 38% of the observed decline in service delivery and reduced extreme-poverty headcount by 4.2 percentage points.

Conclusion:

The paper concludes with politically feasible institutional reforms—anchored on transparent oil-revenue earmarking and an independent fiscal council—to break the cycle of fiscal profligacy and revive equitable public services.