Malawi is a poor country: close to 65 percent of the rural population live on less than US$ 0.60 per day and 48 percent of children are malnourished. The first Malawi Social Action Fund (MASAF) aimed to reduce such high poverty levels. It was introduced at a time when the country was transitioning politically to multi-party system. A review shows that despite the difficulties of this period, the social fund performed well.

Social funds are agencies with some level of autonomy set up by national governments and funded by the World Bank. They usually implement small projects that directly reach poor people by allowing them to become involved in their development. In 1996 the Malawi government launched its first one, with a remit to spend US$ 56 million on community projects and public works. Within two years the funds were fully committed and MASAF-II and MASAF-III followed.

An independent review of MASAF-I was commissioned by the Malawi government and the World Bank in 2001, to find out whether the original US$ 56 million helped to reduce poverty and promote institutional development. A multidisciplinary team from the UK Institute of Development Studies, the Malawi Centre for Social Research and the Norwegian Institute for Urban and Regional Research carried out the review. The research explored whether poor people benefited from the MASAF-I sub-projects.

The impact of MASAF-I on sustainable poverty reduction was difficult to assess. Malawi suffered from the HIV/AIDS epidemic, periodic crop failures, food scarcity, price rises and reduced aid flows during the project period. These events had a much greater impact than MASAF-I. So the review focused on direct effects on poverty, observing that:

• in most cases the funds did not leak to better-off people but neither were the poorest households targeted
• new school buildings provided 150,000 more school places and boreholes brought drinking water to 200,000 people
• some empowerment was achieved, with 60 percent of households reporting involvement in project selection and 71 percent of project participants reporting improved quality of life
• MASAF-I had little influence on government decentralisation
• the Social Fund achieved high popular awareness and political support: it benefited from the President’s endorsement of the programme, careful financial auditing, performance-related salaries and punishment of corruption
• systematic approaches to project monitoring and appraisal were lacking
• traditional leaders greatly influenced the allocation of community sub-projects.

The influence of traditional leaders upon project selection was the most unexpected finding. Chiefs mobilised communities into action and lobbied for proposals to be appraised. Sometimes they generated resentment and feelings of exclusion amongst the community members. The research suggests that greater understanding of the relationship between communities, traditional leaders and the formal political and administrative structures could facilitate both democratic decision-making and the transformation of chiefs into development agents in Malawi.

The review also revealed three competing approaches to poverty reduction amongst politicians and bureaucrats in Malawi: geographical equity (based on needs and population); funding competitions (encouraging community self-help); and resource allocation between sectors according to national funding priorities.

The challenge for the future of poverty reduction in Malawi will be to reconcile such competing demand-led and planning-led approaches. Policy suggestions include:

• Communities should rank options for meeting their own needs, in order of priority.
• Sector ministries have to define finance and staffing procedures for local investments in their sector.
• Funding allocations by donors should be based partly on geographical equity and partly on competition.
• The social fund institutions should publish all investment decisions and reveal allocation between sectors and localities.
• The social fund institutions should also establish channels to assist communities that have problems with the facilities they finance.

Source(s):
‘Poverty reduction during democratic transition: the Malawi Social Action Fund 1996-2001', Institute of Development Studies (IDS) Research Report 56, by Gerald Bloom, Wycliffe Chilowa, Ephraim Chirwa, Henry Lucas, Peter Mvula, Arild Schou and Maxton Tsoka, January 2005 Full document.

Funded by: Government of Malawi and the World Bank

id21 Research Highlight: 17 August 2005

Further Information:
Gerald Bloom
Research Fellow
Institute of Development Studies
University of Sussex
Brighton BN1 9RE, UK

Tel: +44 (0)1273 678733
Fax: +44 (0)1273 621202
Contact the contributor: G.Bloom@ids.ac.uk

Institute of Development Studies

Other related links:
'Fighting hunger with free agricultural inputs: the experience of Starter Packs in Malawi'

'The Malawi Poverty Reduction Strategy Paper: the right approach?'

'PRSPs and decentralisation in Malawi: can they offer any progress?'

'The Role of Information, Education and Communication in the Malawi Social Action Fund'

'Social Funds in Africa: Supporting Community-Managed Projects in Rural Water Supply (pdf)'