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Stefan Leiderer et al. in a permanent ad hoc mode of planning and budgeting instead of a routine and standardised mode of action. Box 16 provides illustrations. 7.1.3 Informal practices as pragmatic solutions The incidence of informal practices in terms of deliberate political influence on administrative decision-making appears to have decreased under the new government according to the perception of most interview partners. However, it was a very dominant mode under the Muluzi government and still occurs in certain cases today. The second type of informal practices that were identified in the analysis are more prominent. They occur when formal rules and procedures cannot be followed because of delays in the process. For example, actors that are further down in the chain of action often have no choice but to pragmatically adapt to the situation they find themselves in. These informal practices are often a compromise between what is legally required and what actors can do in the respective situation. They are informal practices in the sense that they are not formally defined by the legal and institutional framework. That does not mean that all of them are necessarily illegal or “bad” per se. They are not even inefficient in all cases, although many are. Box 16 illustrates some examples of how informal practices are created. How the three features uncertainty, ad hoc mode and informal practices are linked to each other in Malawi’s PFM system and how uncertainty is created in the first place is discussed in the following section. Selected illustrations are also given. 7.2 How uncertainty is created in Malawi’s PFM Malawi’s formal institutional and legal framework for PFM is seen as sound and adequate. Nevertheless, PFM and the budget process in particular are considered to be weak. But why is there such a discrepancy between the formal PFM framework and actual practice? This section draws together the findings and concludes the argumentation. 130 German Development Institute
Public Financial Management for PRSP Implementation in Malawi 7.2.1 How formal PFM rules are undermined To be effective, the formal institutional and legal framework for PFM needs to be adhered to in actual PFM practice. Particularly in the context of a very poor country with few professionals, a high degree of donor dependency and a long history of political authoritarianism it is obvious that this is a very challenging task. During the field, research five key areas were identified that are critical for implementing this framework. 47 The major problems in each of these key areas were identified and respective reasons for as well as effects of these problems analysed. Problems in each of these five key areas contribute to the PFM process in Malawi being characterised by uncertainty, an ad hoc mode of planning and budgeting and the use of informal practices through two different channels: — The direct link where certain problems become explicit triggers 48 for an increased ad hoc mode of planning and/or budgeting and thereby increase overall uncertainty. — A more indirect way that does promote but in itself does not cause ad hoc behaviour, informal practices and uncertainty; One example for a typical trigger event would be the delay of disbursement of funds or detailed announcements by donors. This delay will be transmitted throughout the entire budgeting process from each stage to the next one. Reliable budget ceilings will be issued too late and the resulting time pressure will make it impossible to adhere to formal rules and procedures (e.g. there is no time to get the budget approved by the full district assembly at the local level), leading to ad hoc planning and/or budgeting at the various levels. This again increases uncertainty with regard to the relevance of formal rules and procedures, even more so when informal practices that are not in line with formal regulations are not sanctioned accordingly. If ad hoc planning and budgeting or informal practices are already taking place, the weaknesses in these areas tend to reinforce those negative features further, increasing the overall level of uncertainty in the system. Figure 10 illustrates this self- 47 The authors do not claim to cover all relevant key areas for PFM in Malawi. However, there are reasons to believe that these are probably the most important ones. 48 A “trigger event“ is directly linked to an ad hoc mode of action although it might not always be easy to clearly identify the single most important event as several factor do often work together, leading to a situation where ad hoc planning and/or budgeting is practiced. German Development Institute 131
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Studies Deutsches Institut für Ent
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Preface The present study on ‘Pub
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4 The Case of Malawi 44 4.1 Why Mal
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Bibliography 151 Annexes 157 Tables
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