Poverty reduction efforts in Malawi pivot on the twin strategies of the Poverty Reduction Strategy Paper (PRSP) and decentralisation. Yet researchers argue that the Malawi PRSP represents a mixture of policies and generalities that could equally well have appeared in any strategic document of the past 30 years.

A paper from the University of East Anglia’s Overseas Development Group takes a sceptical view of the PRSP and decentralisation processes in Malawi. Drawing on investigations of livelihoods in eight villages, it argues that the PRSP is not addressing rural realities and warns that introduction of fiscal decentralisation (transfer of expenditure and taxation decisions to lower tiers of government) risks creating additional barriers to trade and enterprise.

PRSPs may be heavily infused with the rhetoric of local ownership, participation and empowerment of the disadvantaged but the reality is more complex. Decentralisation as it is unfolding in sub-Saharan Africa is not responding to spontaneous popular demand for local autonomy in decision making, but is promoted from the top by donors and pursued with varying degrees of enthusiasm, or lack of it, by national governments.

The authors argue that PRSP-generated poverty indicators cannot reveal causes and effects regarding the opportunities and constraints experienced by citizens. They must be complemented by an approach that identifies the multiple constraints confronting rural Malawians –  small and declining farm sizes, lack of livestock as a substitutable asset, deteriorating civil security, constant risk of food deficit from own production, low monetisation of the rural economy, little cash in circulation and institutional blockages to breaking out of established livelihood patterns.

The report shows that:

• creating an enabling environment for people to construct their own routes out of poverty may be prevalent in many PRSPs, but the nature of public sector roles and modes of conduct required to build such an enabling environment are poorly articulated by both donors and governments
• fiscal decentralisation in Malawi as elsewhere has been considered almost entirely from the viewpoint of increasing the potential tax yield on which district assemblies can rely – rather than the viewpoint of the tax burden on the poor.

Africa-wide policy implications from the research show the need to:

• shed idealised notions of decentralised participatory processes leading seamlessly to local good governance and effective service delivery by dedicated public agents
• realise that allowing local government to increase revenue – and income for councillors and functionaries – by imposing punitive burdens on monetised activity runs the risk that decentralisation becomes part of the problem of rural poverty, not part of the solution
• recognise that cash generation is critical if households are ever to secure better living standards, build assets and diversify across farm and non-farm activities
• appreciate that multiple commodity and enterprise taxes levied at the village level suppress cash generation at the very point where it can make the most difference to the livelihoods of the poor
• understand that no amount of school or road building in rural areas will reduce poverty if trade, exchange, enterprise and accumulation are unduly cramped by multiple blockages created by local and central governments

Source(s):
‘Livelihoods and rural poverty reduction in Malawi’ by Frank Ellis, Milton Kutengule,  and Alfred Nyasulu, World Development Vol. 31, No. 9, pp. 1495–1510, 2003
‘Livelihoods and rural poverty reduction in Malawi’ by Frank Ellis, Milton Kutengule, and Alfred Nyasulu, LADDER Working Paper No.17, July 2002 Full document.

id21 Research Highlight: 14 January 2004

Further Information:
Frank Ellis
School of Development Studies
University of East Anglia
Norwich NR4 7TJ
UK

Tel: 44 (0) 1603 592807
Fax: 44 (0) 1603 451999
Contact the contributor: f.ellis@uea.ac.uk

School of Development Studies, University of East Anglia

Milton Kutengule
National Economic Council of Malawi
P. O. Box 30136
Capital City,
Lilongwe 3,
Malawi

Tel: 265 788 390
Fax: 265 788 131
Contact the contributor: mkutengele@hotmail.com

National Economic Council of Malawi

Other related links:
Position Paper on the status of PRSP and Civil Society involvement in Malawi

Malawi Decentralised Governance Programme Document

Malawi Poverty Reduction Strategy Paper, April 2002

IMF staff assessment of the Malawi PRSP