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Stefan Leiderer et al. never gained too much relevance. It is mainly perceived as a background document that guided the general formulation of policies rather than being considered a binding policy document for different sectors of the government. The first MPRSP expired by the end of 2005. Preparations for a new PRSP had not started by the time the field research was conducted and another strategy document, the “Malawi Economic Growth Strategy” (MEGS) was generally considered the guiding policy document reflecting government priorities. By the end of 2006 a new PRSP had been drafted; however, the finalisation process got delayed when the president presented different priorities from those initially agreed upon in the participatory formulation process to be included. Source: World Bank (2004a); own compilation Most studies conducted on PFM in Malawi thus far refer to the conditions under the Muluzi administration. Their findings are rather similar: the budget itself is considered a “shadow budget” (South African Institute of International Affairs 2004, 2), the budget process is judged to be either extremely weak (IMFb 2004) or even a mere “theatre that masks the real distribution and spending” (Rakner et al. 2004, iv). Political patronage and interference from the top level have been identified as creating informal practices that undermine formal institutions of the budget process. The deliberateness of these political interferences for individual gains under the Muluzi administration is generally not doubted by the cited studies. It was, therefore, particularly interesting to attempt to assess the impact of apparently improved political commitment at the top on the quality of PFM in Malawi. Box 8: Recent Political History of Malawi Malawi’s recent political history is far from unique in the African context. It is a country in transition. In 1994, the first democratic multiparty elections took place after almost 30 years of authoritarian rule under Dr. H. Kamuzu Banda. Poor economic performance and external shocks reduced political elites’ access to resources and thus eroded the support bases for “bureaucratic-authoritarian” regimes (Haggard / Kaufman 1995, 28–30). However, the regime change was primarily induced by heavy donor pressure from World Bank and the IMF instead of evolving elites or revolutions. The aftermath of the changes in 1993/94 has been characterised by a typical setting and the challenge for democratic consolidation. Winner of the first 46 German Development Institute
Public Financial Management for PRSP Implementation in Malawi (1994) and second free elections a (1999) was the conservative United Democratic Front (UDF) b party and its leader Bakili Muluzi was elected president c . In 2004, Muluzi did not succeed in changing the constitution to run for a third term, mainly thanks to the resistance of Members of National Parliament (MP) and Civil Society Organisations (CSO) influence. Bingu wa Mutharika, his successor and winner of the 2004 presidential elections, however, had enjoyed strong support from the former president and seemed to be dependent on his political influence. Nonetheless, the IMF and other donor organisations quickly hailed the new Mutharika government as a great hope for Malawi, following a new policy approach, being serious about fiscal austerity and fighting corruption. This was in part driven by the new president’s decision to appoint Goodall E. Gondwe as Minister of Finance, who had – among other things - previously served as director of the Africa department at the IMF. This appointment was interpreted as a strong signal that Mutharika was indeed committed to sound fiscal policy and to improving Malawi´s relations with international donors (Meinhardt 2004, 21). However, from the beginning many observers considered it problematic that the apparently strong commitment to better and more transparent political leadership depended on very few prominent figures at the top. In 2005, controversial positions between the president and his predecessor became more obvious and finally led into open confrontation. Mutharika withdrew from UDF and formed his own Democratic Progressive Party (DPP). Political conditions in transition countries are often shaped by rapidly changing coalitions and ‘turncoat’ mentalities. This appeared to be the case in this new setting of parties and politicians, who had left UDF to join the new DPP. These new developments created a situation of political uncertainty with the result that local government elections have repeatedly been postponed since May 2005. Calls from voices within society and the political arena for a so-called Government of National Unity (GNU) became stronger. By the end of 2006, local government elections had still not been held, although there were signs that preparations were finally under way. By this time, many observers no longer shared the initial enthusiasm for the new administration. The general impression conveyed that the new president was increasingly turning to an authoritarian style in his decision-making. Although this is not unusual in the African context, recent developments seem to reduce the likelihood of a democratic consolidation to happen soon. The introduction of a multiparty electoral system by itself does not create a liberal democracy overnight. Although the democratic changes have increased the likeliness of legal institutions and procedures to be more predictable, ad hoc decision making and informal procedures still exist. Thus, Malawi’s way to consolidate liberal democracy proves German Development Institute 47
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Public Financial Management for PRS
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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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Annexes
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Publications of the German Developm
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Discussion Paper 16/2007 Schirm, St
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