ANÁLISIS PESTA

Malawi is divided into 28 administrative districts, with the capital city in Lilongwe. It attained independence from British colonial administration in 1964 with Dr Hastings Ka-

22_{Economic governance includes programmes undertaken to stabilize the economy through efficient} public finance and economic management reforms as well as building public sector capacity.

muzu Banda its President. Following independence from British colonial administration in 1965, Malawi was for nearly three decades a one-party State. This was characterised by a rigid authoritarian regime with all state and government powers concentrated within the Presidency. In 1993 Malawi voted to become a multi-party democracy and since had its President and Parliament elected every 5 years. Figure (4.2.4) shows a timeline of recent events in Malawi politics; as can be seen, elections held regularly have resulted in

change in President and party.23

Figure 4.2.4: Timeline of recent Malawian politics President (ethnicity) Muluzi (Yao) B. Mutharika (Lomwe) Banda (Yao) P. Mutharika (Lomwe) Party UDF DPP PP DPP 1994 election 1999 election 2004 election 2009 election 2014 election

This study covers the period 1999 to 2013, a period that saw 3 presidents at the helm in Malawi. Bakili Muluzi was Malawi’s first democratically elected president; he took over power from Dr. Hastings Kamuzu Banda in 1994, winning the election with 47% of the votes. His party, the United Democratic Front (UDF) also acquired majority seats in Parliament. He was re-elected for a second term of office in 1999, winning by 52% of votes and the UDF consolidating the majority in Parliament. While there was reasonable economic performance, the second term was marred by corruption and gross economic mismanagement characterized by increasing fiscal deficits and inflation.

Bakili Muluzi was replaced in 2004 by Dr. Bingu wa Muntharika, elected as a UDF candidate and won 36% of votes, however the UDF had lost majority in Parliament. In 2005, Dr. wa Muntharika ditched the UDF and formed his own party, the Democratic Progressive Party (DPP). This represented a regime change, albeit without a public poll, as the DPP assumed power from the UDF that won the election in 2004.

Dr. Muntharika gained popular support for leaving the ‘corrupt’ UDF and re-introducing the Farm Input Subsidy Programme (FISP) which provided subsidized farm inputs to smallholder farmers. He was re-elected in 2009, winning with over 67% of the vote, while his DPP won 113 of the 193 Parliamentary seats. After gaining such dominance over

23_{Freedom House rates Malawi as “partly free” while according to International Country Risk Group} (ICRG) the quality of government in Malawi is “typical” of a low or lower-middle income country.

the opposition, Dr. wa Muntharika started centralizing his authority by curtailing civil and press freedoms, harassing and victimizing his critcs (Dionne and Dulani (2013)). The once popular FISP became a tool for rent, favoring his co-ethnic Lomwe areas of Southern Malawi and those in other regions that were loyal to the DPP.

In 2012, following the death of Dr. Muntharika, the vice president, Dr. Joyce Banda,24

ascended into power. Having been sidelined by Dr. wa Muntharika since re-election she had formed her own party, the People’s Party (PP) in 2011, so that upon her ascendancy into presidency, another regime change occurred as the PP became the ruling party while the DPP moved to the opposition.

As in many African countries, presidentialism persists in Malawi characterized by presidential-

money powers (the Big Man syndrome25_{) that undermine effective division of powers with}

other state functions such as Parliamentary oversight and the Judiciary. The big man

syndrome is a political science term strongly associated with neopatrimonialism,26 _and

refers to a system of social hierarchy characterized by the dominance of an individual or a restricted group of elites who strive to exert absolute control by making personalized use of state resources and institutions to secure the loyalty of clients and political legitimacy (Bratton and van de Walle (1997), Engel and Erdmann (2007)).

In Malawi, Booth et al. (2006) identifies two levels at which the highly personalized presidential-money powers operate to undermine separation of powers:

a) Formal Level: At the formal level, this is achieved in two ways: (i) the Executive arm uses its control over government resources and manipulates disbursement of budgeted resources to the Judiciary, Parliament (and its committees) as well as other constitutional bodies (Office of the Ombudsman, Human Rights Commission, Anti- Corruption Bureau) in a way that limits their effectiveness in playing the oversight role (ii) Presidential powers of appointment, into important government positions,

24_{Not related to Dr. H. Kamuzu Banda, the first President of the Republic of Malawi}

25_{Francois et al. (2015) defines the Big Man syndrome as situation where one elite leader becomes a} relatively unconstrained decision maker, a personalist ruler with a strong preference for sharing power and spoils with his trusted co-ethnics through the “politics of ethnic exclusion.”

26_{A system in which one person or a small group of political elites in power strive for total control and} dominate the state and decision making powers. It is often characterized by lack of or weakened demo- cratic decision making mechanisms, lack of transparency , misuse of state resources and a concentrated power structure that depends on the one man in power.

are used to reward those loyal to the president and seen to advance his personal interests. The appointments are to positions in key institutions such as the Judiciary, other oversight bodies and the Civil Service.

b) Informal Level: Informal use of money powers to directly bribe people in key public positions with cash or other personal benefits (in terms of MPs, promise to have their constituencies favored for development initiatives), to influence their ability to act independently in interest of public welfare.

A key feature in democratic Malawi that allows rent seeking to thrive is the existence of weak governance institutions such as Parliament, the Judiciary and civil society in the face of a resource-rich executive. Institutional vulnerability inherent in the political, legal and judicial systems provides incentives for policy-makers to engage in rent seeking behavior in pursuit of personal gains. When democratic institutions are so poor, then peoples’ decisions including electoral choices have little impact (Bhattacharyya and Hodler (2010)).

Neopatrimonialism implies the resources of the state become the ‘patrimony’ of the pow- erful ruler. For a country without any notable natural resources, state resources mean control over bureaucratic positions, powers to allocate rents (including foreign aid), public services and determine policies and their beneficiaries.

Important for the purposes of this study is the nature of the political system as it relates to government expenditure through the national budget. Public spending in Malawi is divided into two categories namely recurrent budget and the development budget. Malawi Government (2009) defines recurrent expenditures simply as operational costs incurred by government ministries and departments (such as schools, hospitals, etc). They include salaries and wages, utilities, generic office supplies, interest on public debt as well as subsidies and transfers. Recurrent spending across districts is governed by the National Local Government Finance Committee (NLGFC) which plans and formulates local authorities’ budget using an approved formula.

As a result of the nature of the recurrent budget, it is subject to significant oversight from public affairs institutions, civil society organizations and development partners. For

instance, payment of salaries, supply of drugs in hospitals or supply of teaching and learning materials to schools, which are all significant components of the recurrent budget, are all subject to intense scrutiny. Hence, the President has limited scope to exert influence on the allocation of the recurrent budget across districts.

Development expenditures relate to public capital investments and are incurred in support of the Public Sector Investment Programme (PSIP); the development budget provides long term public capital goods and services such as infrastructure and other investment programmes. Unlike the recurrent budget, development projects implemented in districts are not determined by the NLGFC; planning and formulation of development projects is still centralised. Allocation of development spending across districts is subject to little oversight leaving a lot of room for the political elite to exert influence.

Additionally, when it comes to public investment programmes attention is often on the national level outcomes ignoring their internal allocation. For instance when the govern- ment receives aid for construction of primary schools across the country, it is often the case that any oversight on the progress of such a programme focuses on the total number of schools built rather than whether they are being built where schools are needed most. As a result, the President has most control over the allocation of these expenditures across districts.