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Stefan Leiderer et al. its relevance for the PFM in so far as the absence of a dysfunctional system in favour of arbitrary procedures and weak institutions is a precondition for successful and sustainable management of finances for development. a b c Elections are held in five-year terms. The president and the legislative branch are elected at the same time (CIA Factbook, 2004). UDF entered a coalition with AFORD (Alliance for Democracy) and the Malawi Congress Party (MCP). The characteristic of national party politics became clear after the elections. All three parties are not characterised by strong ideological ties but frequent shifts of alliances. Personality matters and people vote along regional patterns: UDF established strong ties in the south with connections to the Chamber of Commerce. AFORD shows affinity to the north and various trade unions, whereas the former Banda party MCP could preserve its connections to the centre region of Malawi (Hussein 2004, 109-112) Muluzi is a former MCP member, who – like many other politicians in Malawi – changed his party affiliation after the end of the Banda era. 4.2 Decentralisation in Malawi Malawi is a unitary state with strong centralistic features. However in recent years, it has begun to devolve functions and responsibilities to local levels of government. This new approach is not least due to donors, who felt that a fresh impetus was needed and hence strongly argued for the need to develop a national decentralisation strategy. Thus, when in 1995 a new constitution was adopted it entailed the requirement to establish local government authorities. In 1998 the National Decentralisation Policy (NDP) was approved, and incorporated into the Local Government Act. The NDP along with the Local Government Act provide the main framework for decentralisation in Malawi. This framework establishes political decentralisation through democratically elected local assemblies and the devolution of central government functions to local government level. The NDP is formulated and reviewed by a Cabinet Committee on Decentralisation and seeks to achieve the following objectives (Decentralisation Secretariat 1998, 2–3): — creating a democratic environment and institutions in Malawi for governance and development; at the local level which will facilitate the participation of the grassroots in decision-making; 48 German Development Institute
Public Financial Management for PRSP Implementation in Malawi — eliminating dual administration (field administration and local government) at the district level with the aim of making public service more efficient, more economical and cost effective; — promoting accountability and good governance at the local level in order to help Government reduce poverty; and — mobilising the masses for socio-economic development at the local level The Local Government Act provides the implementation modalities and details of the local government structure, including key structures, procedures, accountabilities and remedies. It also defines the specific parameters of the intergovernmental fiscal system (GFA 2005, 20). Today Malawi is divided into three regions: the north, the centre, and the south. These regions, however, do not have any relevant administrative functions. Thus, the relevant second administrative tier is formed by 28 rural districts; 8 towns; 1 municipality and 3 major cities of Malawi. Districts are themselves further divided into areas, wards and villages. Areas are headed by Traditional Authorities (TA) such as chiefs and sub-chiefs. In 1998 Malawi counted as many as 380 areas with approximately 26,000 inhabitants in each area, and 850 wards of 10,000 to 12,000 people each, which are the smallest administrative units (DANIDA 1998, 24; NSO 2005). 4.3 The sectors: education and health in Malawi Although this study focuses on PFM in general, it particularly concentrates on PFM in the sectors health and education. There are several reasons for this: First, both sectors are considered highly relevant to reducing poverty in sub-Saharan Africa. This is also reflected in the central role both sectors are attributed in the MPRSP. The second reason is that the MDG-driven debate about new modes of aid delivery such as Sector Wide Approaches (SWAps) or budget support are heavily biased towards these “social” sectors. Thus, they play a role in the closely related debate on PFM reforms. This is also the case in Malawi. 5 Furthermore, decentralisation efforts regularly are most 5 GoM and a group of donors agreed to a health SWAp in 2004. A ‘mini-SWAp’ already exists on HIV/AIDS. At the time the field research was conducted a SWAp in the education sector was also being prepared. German Development Institute 49
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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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Boxes and Tables in the Annexes Box
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Publications of the German Developm
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Discussion Paper 16/2007 Schirm, St
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