1313 © 2018 AESS Publications. All Rights Reserved. PUBLIC FINANCE AND RURAL DEVELOPMENT IN NIGERIA: EMPIRICAL EVIDENCE FROM THE STRUCTURAL EQUATION MODELING Abdulkadir Abdulrashid Rafindadi 1+ Kondo Augustine Kondo 2 1,2 Department of Accounting, Faculty of Management Sciences Usmanu Danfodiyo University, Sokoto, Nigeria (+ Corresponding author) ABSTRACT Article History Received: 16 July 2018 Revised: 21 August 2018 Accepted: 27 September 2018 Published: 2 November 2018 Keywords Public finance Rural development Rural infrastructure Nigeria Regression Structural equation modeling Joint account Finance. JEL Classification: H73; H75; H79; H41; H10. This study looks at the Nigerian public finance system and the quality of life in rural areas. Specifically the study aims at assessing the implementation and elements leading to the constraints to rural investment in those infrastructural facilities that help in improving or enhancing the quality of rural life in Benue state Nigeria. Data was gathered from nine local government areas in Benue state. Two-hundred and seventy questionnaires (270) were distributed (i.e. Thirty questionnaires duly distributed to each selected local government) and a total of two-hundred and forty-two were returned. A comparative methodological approach of multiple-regression analysis and the structural equation modeling (SEM) was adopted. Findings of the SEM analysis revealed that public finance in rural areas of the selected sample size in Nigeria has not been effective and efficient in all ramifications. While the result from the regression model established that, the five key indices used in the study established poor respective outcome. These were found to be due largely from the joint account system between the state/local government which poses serious challenge when it comes to the issue of financing rural infrastructural projects and other social amenities. The study recommends among others the need for a newly architected public finance system in local governments in Nigeria and this should be directed in a way and manner that will be efficient and prudent to move the developmental prospects of the local governments in the rightful direction in Nigeria. Contribution/ Originality: The study in its contribution documents how the state/local government joint account system served as the major impeding factor to the success of the public finance system in rural development. 1. INTRODUCTION From the day Nigeria got her independence from the Great Britain in the year 1960, quality provision of public services has been a priority by the succeeding governments. In respect to achieving this objective, several policies, strategies, institutions, agencies and organizations have been put up to ensure, monitor and undertake the processes to proficiently and effectively attain this objective. However, there exist a gap between policy formulation, implementation and the realization of development most especially in the area of rural sector development (Eneh, 2011). The post-colonial orientation appears to be no Asian Economic and Financial Review ISSN(e): 2222-6737 ISSN(p): 2305-2147 DOI: 10.18488/journal.aefr.2018.811.1313.1339 Vol. 8, No. 11, 1313-1339 © 2018 AESS Publications. All Rights Reserved. URL: www.aessweb.com