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Stefan Leiderer et al. whether observed commitment is indeed genuine and can be sustained. However, currently it seems that the political commitment of top government officials as well as personal commitment of civil servants at technical levels do not provide the most important source of uncertainty triggering the observed ad hoc mode of planning and budgeting and use of informal practices in Malawi’s PFM. This argument is elaborated in more detail in the following section. 7.2.3 The budget as a theatre, continued – How important is political commitment? As previously quoted in Chapter 5, a recent study on Malawi’s formal and informal PFM institutions commissioned by DFID finds that “the budget process [in Malawi] is a theatre that masks the real distribution and spending” (Rakner et al. 2004, iv). Another recent study on Malawi’s PFM comes to the conclusion that although capacity constraints in implementing PFM reforms must be recognised, the main limiting factor for sound PFM in Malawi in the past appears to have been a lack of commitment of political leaders (Durevall / Erlandsson 2005, 35). This point of view, however, would imply that by substantially improving political commitment of senior government officials, the quality of PFM could be improved significantly. In Malawi, such a change appears to have taken place with the election of the new government in May 2004. So far, most donors agree that there is evidence that the new leadership is committed to fiscal discipline and tackling corruption (Durevall / Erlandsson 2005, 37). Consequently, one could expect substantial improvements of PFM and the adherence to formal rules and procedures in Malawi. However, as the evidence collected for this study suggests, even with good formal institutions and regulations in place, political commitment alone will not suffice to ensure adherence to PFM rules and procedures in a country like Malawi. This is because there are various limiting factors inherent to the public sector in a typical African developing country like Malawi that undermine adherence to formal rules and regulations, lack of commitment by political leaders being only one of them. Some authors suggest that disorder and uncertainty in fact serve as political instruments for African elites to maintain their power base (c.f. Chabal / Daloz 1999), and are as such intended consequences of actions undertaken by political leaders lacking commitment to development and 140 German Development Institute
Public Financial Management for PRSP Implementation in Malawi poverty reduction. However, evidence suggests that there are other important factors as well, leading to the rather unintended establishment of informal and parallel PFM systems. This means that even though political commitment may have improved significantly in Malawi, the PFM system’s main features of uncertainty, ad hoc behaviour and informal practices will continue to exist. They must be considered as systemic problems themselves, rather than intended consequences of the elite’s lack of political commitment to development only. The reflex to blame neo-patrimonial and clientelistic structures alone wherever good formal institutions and regulations are not adhered to, must therefore be challenged to a certain degree. Although commitment is an essential precondition for reforming PFM; it cannot solve systemic problems that consists of a severe lack of resources and capacity as well as poor coordination and donor behaviour. In brief: although the budget may no longer be a mere theatre in Malawi, the old stage still exists. 7.3 Uncertainty in PFM and institutional development in Africa How unique is the case of Malawi with a PFM system that is characterised by the central features of uncertainty, ad hoc behaviour and informal practices? Many of the conditions that were identified as leading to these problems can also be found in other developing countries. It is likely that similar phenomena can also be discovered there. Therefore, Malawi is certainly not unique in the developing world and some generalisations regarding other countries in sub-Saharan Africa seem justified. But what if these central features of PFM in Malawi are compared to PFM in consolidated Western democracies with a strong public administration? Surprisingly, similar features are found in these countries as the following quote shows: “Instruments of public financial management that have been established for emergency interventions become institutionalised as instruments for the maintenance of the budget cycle. … [Informal] bilateral negotiations between finance- and sector administration divisions are no longer the exception but are an important instrument of budgeting itself.” (Peters 2000, 135; own translation.) German Development Institute 141
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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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Boxes and Tables in the Annexes Box
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DS EHP ESAF EU GBS GDP GoM GRF GTZ
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TOR UDF UNCDF UNDP UNV USAID VAP VD
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