Resource Corner
From the Executive Summary:
"Malawi has benefited from substantial donor support and it has implemented liberalisation and structural adjustment programmes, yet it still has high levels of poverty. A number of previous studies have focused on how Malawi has not been fully committed to these programmes or how it has misused or misappropriated aid. The effectiveness of aid depends on both donor and recipient country policies and practices. This study intends to expose the difficulties related to these issues in the context of Malawi and propose ways on how to resolve them.
While a high level of dependence on aid at this stage of Malawi's development is inevitable, the high level of dependence has created a number of problems for the country's budget process. These problems include unpredictability of aid, inflexibility of aid as most of it is project support, creation of parallel implementation units, high transactions costs and neglect of priority sectors in the allocation of the aid by donors. Despite these problems, the country has not formulated a plan for reducing dependence on aid or an aid exit strategy."