Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
Public Financial Management for PRSP - Deutsches Institut für ...
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<strong>Public</strong> <strong>Financial</strong> <strong>Management</strong> <strong>for</strong> <strong>PRSP</strong> Implementation in Malawi<br />
4. Coordination <strong>for</strong> PFM<br />
Poor coordination between ministries, departments and agencies as well as<br />
between different levels of government undermines the whole budget process.<br />
5. Commitment<br />
Lack of political commitment to sound PFM used to be a critical source of<br />
uncertainty in the PFM process in Malawi. With the new leadership, there<br />
were positive signs of credible commitment to accountability and effectiveness<br />
of PFM, initially giving ground to the hope that substantial improvements<br />
in Malawi’s PFM per<strong>for</strong>mance will soon materialise. However, it must<br />
be recognised that much of the old systems of inappropriate power distribution<br />
and unhelpful incentives remain.<br />
Against the background of these multidimensional shortcomings that cause<br />
Malawi’s PFM being characterised by uncertainty, ad-hoc planning and<br />
budgeting, and in<strong>for</strong>mal practices the analysis conducted <strong>for</strong> this study suggests<br />
that in<strong>for</strong>mal practices are often a compromise between what is legally<br />
required and what actors can realise in the respective situation. These practices<br />
are in<strong>for</strong>mal in the sense that they are not legally or institutionally provided<br />
<strong>for</strong>. However, this does not automatically imply that all of these in<strong>for</strong>mal<br />
practices are necessarily strictly illegal or actually bad. As matter of fact,<br />
in many cases they represent rational second best solutions to PFM problems<br />
by good willing actors facing the described constraints.<br />
Although commitment seems absolutely essential as a precondition <strong>for</strong> re<strong>for</strong>ming<br />
and improving PFM per<strong>for</strong>mance, it seems that by itself it cannot<br />
solve the more systemic problems that consist in a severe lack of resources<br />
and capacity as well as poor coordination and bad donor behaviour. Given<br />
these constraints, even with improved political commitment the following<br />
conclusions are likely to remain valid:<br />
— En<strong>for</strong>cing accountability is extremely difficult in a PFM system such as<br />
Malawi’s.<br />
— The relevance of <strong>for</strong>mal rules and procedures <strong>for</strong> PFM in Malawi is<br />
limited and is being undermined in the process.<br />
— The effectiveness of Malawi’s PFM system is limited and there<strong>for</strong>e the<br />
implementation of strategic policies (e.g. the MPRS) through this system<br />
is unlikely.<br />
German Development <strong>Institut</strong>e 7