The Double-Edged Sword of Integrity: How Ethical Compliance Attenuates the Capability–Performance Link in Ghana’s Local Government Projects

Public project performance is shaped by both organisational capability and governance controls, yet the interaction between these factors remains underexamined in decentralised public administration contexts. This study examines the direct effects of team capability and ethical compliance on project performance, and tests whether ethical compliance conditions the capability–performance relationship. A quantitative explanatory survey design was adopted. Structured questionnaires were administered to 320 senior officers involved in project evaluation, procurement, budgeting and technical oversight, and the data were analysed using PLS-SEM to estimate the hypothesised direct and moderating relationships. Team capability and ethical compliance each have a significant positive effect on project performance, and team capability is positively associated with ethical compliance. The moderating effect of ethical compliance is significant but small in magnitude, indicating that higher levels of compliance modestly attenuate the marginal performance gains associated with greater team capability. These findings suggest that while compliance mechanisms strengthen accountability and directly support performance, they may simultaneously constrain the discretionary flexibility through which capable teams generate incremental improvements. The study contributes to public management research by empirically demonstrating a conditional capability–governance relationship in a local government project context. Given the moderate explanatory power of the model, future research should incorporate additional institutional and political variables to further clarify performance drivers in public-sector project systems.