I doubt it's a huge contributing factor, but one interesting thing is that under Banda they co-operated with apartheid South Africa, the only Black African country to do. From what some of my Malawian colleagues have told me, there is still much lingering resentment about this which makes deals with neighbours sometimes politically difficult, which is a huge factor for a mountainous and landlocked country.
That said my own perception is that Malawi has fallen into a weird democracy trap where it's just democratic enough that short-term solutions win elections - there's currently a massive road building project in Lilongwe and there's the agricultural policies you mentioned - but there's no ability to invest in longer-term projects, AND simultaneously the short-term fixes don't really work and either balloon in cost or don't get maintained.
One question for me, having been to many African countries, is that Malawi just doesn't _feel_ as poor as some others, despite being statistically richer. Maybe it's the stability and safety but Malawi is sandiwched between Eritrea and Somalia, and having been to both Malawi feels like it's in a league above! It feels better than Burkina Faso, which ostensibly has double the GDP. But that's just anecdote.
Interesting comment! I work in rural Uganda which is pretty darn poor, and Malawi felt poorer than that in my couple of visits. In the villages most people were subsistance farming for barely enough food with very little furniture in their houses and very little to get by on. There were few shops that didn't have much in them. Motorcycles and vehicles were few and far between. I haven't visited Eritrea, Somalia and Burkina Faso but how did they feel poorer than this?
One exception was the cities (especially Blantyre) which did actually feel richer than Uganda's cities, but the village felt far poorer.
So I would say generally that nearby countries such as Zambia and Uganda do feel richer, for me Kampala and Lusaka definitely feel more developed than Lilongwe or Blantyre and the countryside does too. It's more that Malawi is listed even below the Sahel countries and places that have been plagued by war like Congo in a way that feels off.
It's an interesting question, one that should occupy more of more people's mindshare. Here are a number of thoughts that could be useful for you to consider:
1. I don't think Malawi is a special puzzle and other poor countries are not. Very few poor countries have monocausal development stories. War and state collapse explain short-term shocks, but many countries have overcome those to grow--as a result of many other factors.
The article itself lists multiple candidate explanations for Malawi, so I was confused as to why you tried to frame Malawi as a mystery. The fact that no single factor fully explains Malawi's outcome does not mean we lack explanations. Multicausal accounts are still explanations--just more complex ones that people far too often claim are "unsatisfying". (The development process isn't intended to "satisfy" anyone.)
A better framing could be around the residual--many of the factors listed in the article do go some ways in explaining Malawi's economic development level, but perhaps not all of it. It almost seemed like that "unexplained portion" is what you were after in the article, but you never said it explicitly.
2. I'm not a fan of the "tautology" critique. Development is fundamentally a complex process characterized by deep endogeneity and all manner of feedback loops that are hard to pin down. The factors you mention--ag productivity, lack of structural transformation, low human capital, etc.--are simultaneously outcomes of and inputs to economic development. This is the case in Malawi just like anywhere else.
Yes, one can and should dig deeper, but articulating these factors is itself useful because many of these things are both causes AND levers...the latter of which is important for policy.
3. The article frames institutions, geography, and colonial history as "proximate" — but the standard development literature treats these as deep causes of long-run income differences. See the diagram here from Rodrik and Subramanian's famous paper:
Geography is hard to change, and institutions move slowly. The article's claim that these factors "don't predict outcomes nor satisfyingly capture much of the reason for variation" conflates two distinct questions: explaining levels of development and explaining changes in growth rates. Much of the institutions literature is explicitly trying to explain long-run income levels, not short-to-medium-run growth accelerations.
This matters because post-WWII growth in developing countries has been episodic — punctuated accelerations and decelerations — whereas growth in Western economies over the preceding century was more steady despite major disruptions. Slow-moving structural factors like institutions and geography are unlikely to explain these episodes on their own.
The interaction between slow and fast-moving factors (e.g., political dynamics, policy) probably matters a lot, and the article misses this.
4. The article states that Malawi's institutions are "broadly better than Rwanda's, Vietnam's, and China's." This is a claim that few if any development professionals would make, and it is almost certainly wrong. (I'd be surprised if this were true in the relatively poor quant measures we have of political institutions, and knowing friends who have worked in these places and having worked on some and been in all of them myself, I don't know anyone who would make such a claim.)
The institutions literature focuses as much on economic institutions as political ones--which you don't mention. We shouldn't necessarily equate formal democratic procedures — competitive elections, peaceful transfers — with institutional quality writ large (or even with genuinely inclusive political institutions, for that matter). Malawi may score reasonably on electoral competition while having weak economic institutions, which aligns with the political economy points around agriculture and land.
5. I'm not an ag or agronomy expert, but I do know through my own work that Malawi does in fact have some meaningful ag opportunities--in soya, sorghum, mangoes, and macadamia nuts, among others. The failure to capitalize on these opportunities points back to policy choices, political economy constraints, and the other structural factors listed elsewhere in the article
6. I've come to believe in the power of political economy explanations, which the article rightfully emphasizes. There is more literature out there that would help to unpack the emergence of the political settlement you mention.
More broadly, you mention political economy in the end as an important takeaway, after having framed it as describing an equilibrium rather explaining why it exists. Well, that sounds like a call to dig deeper on the political and economic history...not a reason to brush it off.
7. The claim that "development economics specifically exists to tell countries what to do" is not an accurate or widely shared definition of the field. Many development economists would not describe their work this way, and the field has a substantial body of work oriented toward understanding causes rather than prescribing action. This is why people like me and my colleagues, and people like Ken Opalo, make the distinction between academic research and policy research.
I think this points to a fundamental confusion between causes and levers. The causes of a country's development level and the available levers for changing it are separate problems. Geography may be a deep cause but is largely not a directly actionable lever — though transport infrastructure and trade integration offer partial handles. Trade and industrial policy are more tractable levers but may not be root causes.
The article opens by asking about causes and closes by criticizing development economics for failing to generate prescriptions. Those are different concerns, and conflating them doesn't actually get us much closer to answering the relevant policy questions.
Thanks for the substantive engagement, Kartik. A few points:
- You're right that the institutions phrasing was too loose. I was referring to political institutions narrowly understood (electoral competition, peaceful transfers), and on that narrow measure Malawi does score above the comparators. But "broadly better" was perhaps the wrong frame — economic institutions and state capacity are a different story.
- On framing: I don't actually necessarily think Malawi is uniquely puzzling, but it's easiest to demonstrate this point in a specific case, and Malawi is a relatively good one because it doesn't have major exogenous issues, as noted. This is a broader issue in development.
- The "tautology" critique was specifically about proximate descriptions ("low ag productivity") being treated as explanations, not about multi-causal accounts being insufficient — I definitely agree development is multi-causal.
- I'd push back on the causes/levers distinction. I agree they're distinct in principle. But the test of an explanatory framework isn't whether it post-hoc rationalizes outcomes — it's whether it would have flagged ex ante which countries would be more/less likely to grow. Development economics has been bad at this, which matters both for assessing the explanatory power of these frameworks and for making forward-looking predictions.
- On ag opportunities — agreed, and the interesting question is exactly the one you point to: why hasn't Malawi capitalized? Which brings us back to political economy.
Appreciate you taking the time to engage so thoroughly.
-So if indeed Malawi does better in international indices of political institutions than Rwanda, Vietnam, and China, I suspect that reflects a particular normative notion of what good political institutions are (which may or may not matter all that much for economic development) + the difficulty of measuring these sorts of institutions--as much as it reflects a reality wherein Malawi is in fact better on these margins.
-I'm not sure I get your point about tautology...what you point to are *both* descriptions and explanations. Again, I'm not sure of any country whose level of development can be fully explained by deep roots. The residual is large, and likely accounted for in part by a range of proximate factors as well as other factors that are hard to pinpoint (e.g., political dynamics and relationships, critical junctures, etc.)
-I think you didn't quite get my point about causes and levers. One aspect is that levels and growth are different. There are various attempts to identify factors that make some countries likely to grow faster than others going forward--e.g., a country's current economic complexity. One would need to explore empirically whether these hypotheses hold up. Only then can we say that we're bad at it.
Then there's the issue of levels. I think it may be trickier to predict levels of development precisely because a country's level of development is a long-term outcome and the result of a process that is highly contingent. In 1955, it was probably not at all obvious (or maybe not even on many people's radar) that Korea would get a leader that did all the things Park did to enable Korea's economic development. So I'm not sure we should expect development economists to be able to make predictions about long-term development when it seems to be dependent on such unforeseeable events.
So as not to defend development economists *too much*, the reason why these distinctions matter is because the causes vs. levers framing is precisely about practice, not solely about principle. It may be quite hard for development economists to do the type of prediction that you're referring to. But because economic development outcomes are multicausal and contingent, that doesn't mean there aren't still many levers to pull to try to achieve those outcomes. In other words, us practitioners aren't reliant development economists to tell us where to focus and what to do. We're essentially playing two different games.
James Robinson recently made similar points--perhaps the first time I'm hearing a development economist openly question the use of development economists for the practice of development. See 18:20, 1:24:00, 1:35:00, and 1:49:00:
Political econ the key, especially the political 'chiefly alliance' with the thin urban elite whose political base/legitimacy depends on the chiefs. So agric modernization next to impossible. Unholy combo but dug in.
It sounds like a simple enough answer, stable politics means that settlements can remain settled; and Malawi has settled on some of the worst policies for growth. The populace is content to do maize farming and receive international aid. Until that equilibrium changes (likely due to shrinking plots) then they will have upheaval.
You mention this tangentially but my impression is that climate is huge for Malawi: basically every year they have a "lean season" due to drought or flooding. Is that in the models, or are my impressions overblown?
You're right that climate exposure is a meaningful factor given Malawi grows rain-fed maize, has recurring drought, and has had recent cyclones (Idai, Ana, Freddy). The comparative case for it being the binding constraint is a bit weak, though. Other SSA countries face similar or worse climate stress and have higher yields, e.g., Ethiopia, or haven't but have grown faster anyway e.g., Mozambique. I also mentioned above that the empirical literature on landlocked + tropical penalties puts the combined drag at about 1-1.5% of annual growth, which I think is a useful datapoint here.
The interesting version of the climate point is that the political settlement amplifies Malawi's climate vulnerability. Customary land tenure blocks consolidation, which would enable irrigation investment at scale (<5% the arable land is irrigated), for example, and the maize self-sufficiency policy and FISP keep farmers growing a climate-vulnerable staple rather than drought-resistant alternatives like sorghum, or higher-value crops with different risk profiles.
So I'd say climate is a factor, but not binding in and of itself and its effects are largely downstream of the political settlement rather than a substitute for it.
I would not frame it as Malawi's coalition is failing to develop. It's succeeding at what it's actually organised to achieve. And that's the explanation the political settlements section arrives at.
The FISP subsidy, which consumes up to three-quarters of the agriculture budget, the maize self-sufficiency policy that caps farmers' returns, and the customary tenure that protects chiefs' power aren't policy failures or short-termism. They're the predictable output of a coalition that purchases compliance through distributed benefits — and the MIP record confirms it: resources went to maintaining the existing agricultural setup, not reforming the economy.
Every developmental programme eventually reaches the point where vested interests within the coalition have to yield some privilege to make what comes next possible. That moment arrives regardless of intent. The question is whether the coalition can bear it.
Malawi reform efforts have repeatedly failed: FISP reform, maize export policy, land tenure — each diluted or blocked when the costs reached insiders. When compliance is purchased rather than demonstrated, there is no foundation to draw on when harder demands arrive.
What distinguishes this from Rwanda isn't democracy versus authoritarianism. Formal democratic procedures aren't the same as institutional quality, and Rwanda's formal institutions score poorly on most measures. The difference is that the RPF expected real costs to be absorbed on its own side before any growth record existed to justify them, which made external discipline credible when it arrived. The question for Malawi is whether its governing coalition could ever be asked to do the same.
Shared exposure to failure is what makes insider sacrifice politically survivable, and it almost always involves a reset moment, a crisis deep enough or an existential threat visible enough to suspend the normal defection calculus. The question for Malawi is what would constitute that reset, and whether demographic pressure, fiscal crisis, or climate exposure might be forcing it.
Thanks Stephen, this is maybe a more pointed version of the argument than I made. The FISP/maize/tenure complex is certainly not an accident or pure dysfunction, but the political system working as designed.
On the RPF comparison, you're right that the relevant contrast isn't democracy vs. authoritarianism but rather whether the governing coalition can credibly absorb costs of new programs before the growth payoff materializes. Malawi's problem appears to be that no faction within the coalition has ever had to accept short-term pain, so there is not much driving that.
On the reset question, I think demographic pressure is the most likely forcing function, but it'll take a while. Plot sizes are already subdividing toward unviability, and at some point the smallholder-maize equilibrium stops being stable. Fiscal crisis could accelerate this (e.g., FISP becoming entirely unaffordable, a reallocation in donor spending) but Malawi has muddled through fiscal stress before without that changing much. Climate I'd put third, in large part because previously cyclones don't seem to have created appetite for reform.
Very interesting analysis! I think you have an unstated assumption here though that once we understand it, we should be able to fix it, and any understanding that doesn't yield solutions is not "true understanding".
It seems like the main story is that Malawi is stuck in a bad but quite stable equilibrium, and has almost any exogenous factor you can name working against it. I don't like arguments for revolution or breaking down established systems but this might be the case where some kind of destabilizing factor is necessary to get out of the bad equilibrium. I guess a pending Malthusian crisis would provide this on the default path?
Malawi doesn't sell much to the rest of the world. I think this is the main problem. Exports of goods & services are 30.8% of GDP in Rwanda and 11.2% in Malawi. You did mention trade, but you didn't push the point enough I think. This is partly due to geography. Landlocked Lesotho escaped that fate by leveraving neighboring South Africa infrastructure while having significantly lower wages. Rwanda did it by having a government highly focused structural transformation. Malawi is the proof that being relatively stable and not especially corrupt but without any structural transformation obsession (Rwanda) or geographical luck (like Lesotho) won't take you that far.
Thanks Carl-Henri. You're right that trade is important. The export/GDP gap is striking. I mention that growing maize and tobacco are probably suboptimal choices that are both locked in by existing incentive systems, and I think that's at the core of this gap. Many other countries have successfully diversified into more climate-stable staple or more lucrative export crops over time.
Your Lesotho and Rwanda contrasts are useful and I'd say they make the same point from different angles. Lesotho got AGOA preferences plus proximity to South African infrastructure, and Rwanda had a coalition willing to absorb upfront costs in pursuit of structural transformation. So I'd frame low export share less as a cause of poverty than a symptom of a coalition that hasn't been organized to pursue export-led growth.
Thanks for this immersive and provocative piece. Out of curiosity, where do you situate Joe Studwell’s submission of three developmental impediments, one of which I think you’ve tackled, namely the low budget colonialism. Would you care to comment on his positing of the most important impediment as being chronically low population density, which I told him I found rather surprising?
Thanks Sean! Studwell's How Africa Works is a useful framework. The low-budget colonialism leg fits Malawi well; I touch on the point that the labor-reserve administration left little infrastructure or human capital behind.
On density, I share your skepticism. Studwell's argument is really historical: that tsetse fly and the slave trade kept African population density low for centuries, which discouraged urbanization and the kind of dense market economies that drive growth. Could be a plausible description of why Africa diverged from Eurasia over the long run, but not so useful for this context.
Malawi is among the more densely populated countries in sub-Saharan Africa (~224/km² in 2023, well above the regional average). If anything, density is high enough that customary plots are subdividing into increasingly small pieces across generations, which compounds the problem.
The deeper question is why Malawi hasn't executed on the prescriptions Studwell endorses, like smallholder agriculture with state support, export-oriented manufacturing, financial repression in service of industry. That cannot be answered via population density and points us back to the political settlement.
Thanks. Could part of it also be that high levels of aid in Malawi are stabilizing an unproductive equilibrium? Or is that just describing "Dutch Disease" in a different way?
There is no “Aid Dividends” if am allowed to call it that. So yes, high levels of Aid in Malawi are stabilizing (or worsening) an unproductive equilibrium.
Rwanda takes a lot of Congolese minerals (as does Uganda), also pre-kagame the hutu leaders were pretty terrible. They depended entirely in exporting coffee and when coffee crashed, rwanda was in a balance of payments crisis.
I always thought the answer was Kamuzu Banda's political economy. He deliberately organized it around smallholder maize agriculture and chiefly land authority, and that structure locked out industrialization before democracy even arrived. 30 years later, the fertilizer subsidy program, the customary land tenure system, and the political power of the rural maize farmer are all direct inheritances from that era. Reading this though, I'm realizing I need to think about it more carefully
SSAs perform worse than any peers even at similar GDP per Capita levels,and poor democracies struggle to grow,and Malawi is both a SSA country and a poor democracy
I do not know much about Malawi, but I don’t understand how you can possibly say that low-productivity agriculture and geography are merely descriptions or tautologies and not potential causes. Both came long before the modern era and are difficult for humans to change.
Low-productivity food systems have been the most important constraint on the development of human societies all throughout history, so why would it suddenly vanish as a possible cause in the modern era?
If one focuses on why Sub-Saharan Africa is significantly poorer than most other regions, then I think you must include agricultural productivity and geography as very significant causes. Maybe it does not explain why Malawi ranks lower than other African nations, but that is far from the claim that “we do not know why Malawi is poor.”
As an example of the explanatory power of both, see articles that I have written:
Seems like you didn't address the tropical part of the geography claim. Rwanda is at a much higher elevation than Malawi and that almost certainly contributes a disproportionate amount to the outcomes
Lovely article. Thank you. Analytical and measured. Is the primary conclusion that social structure has exacerbated the impact of the other disadvantages, eg which crops are suitable, and not enabled Malawi to take advantage of positive factors such as democratic stability? Do you have a recommendation about the policies Malawi should adopt? Is a shake up of rural land tenure needed? Would urbanisation help?
I doubt it's a huge contributing factor, but one interesting thing is that under Banda they co-operated with apartheid South Africa, the only Black African country to do. From what some of my Malawian colleagues have told me, there is still much lingering resentment about this which makes deals with neighbours sometimes politically difficult, which is a huge factor for a mountainous and landlocked country.
That said my own perception is that Malawi has fallen into a weird democracy trap where it's just democratic enough that short-term solutions win elections - there's currently a massive road building project in Lilongwe and there's the agricultural policies you mentioned - but there's no ability to invest in longer-term projects, AND simultaneously the short-term fixes don't really work and either balloon in cost or don't get maintained.
One question for me, having been to many African countries, is that Malawi just doesn't _feel_ as poor as some others, despite being statistically richer. Maybe it's the stability and safety but Malawi is sandiwched between Eritrea and Somalia, and having been to both Malawi feels like it's in a league above! It feels better than Burkina Faso, which ostensibly has double the GDP. But that's just anecdote.
Interesting comment! I work in rural Uganda which is pretty darn poor, and Malawi felt poorer than that in my couple of visits. In the villages most people were subsistance farming for barely enough food with very little furniture in their houses and very little to get by on. There were few shops that didn't have much in them. Motorcycles and vehicles were few and far between. I haven't visited Eritrea, Somalia and Burkina Faso but how did they feel poorer than this?
One exception was the cities (especially Blantyre) which did actually feel richer than Uganda's cities, but the village felt far poorer.
So I would say generally that nearby countries such as Zambia and Uganda do feel richer, for me Kampala and Lusaka definitely feel more developed than Lilongwe or Blantyre and the countryside does too. It's more that Malawi is listed even below the Sahel countries and places that have been plagued by war like Congo in a way that feels off.
Nice one completely agree. Apart from some sections of Blantyre which were bizzarely affluent looking...
It's an interesting question, one that should occupy more of more people's mindshare. Here are a number of thoughts that could be useful for you to consider:
1. I don't think Malawi is a special puzzle and other poor countries are not. Very few poor countries have monocausal development stories. War and state collapse explain short-term shocks, but many countries have overcome those to grow--as a result of many other factors.
The article itself lists multiple candidate explanations for Malawi, so I was confused as to why you tried to frame Malawi as a mystery. The fact that no single factor fully explains Malawi's outcome does not mean we lack explanations. Multicausal accounts are still explanations--just more complex ones that people far too often claim are "unsatisfying". (The development process isn't intended to "satisfy" anyone.)
A better framing could be around the residual--many of the factors listed in the article do go some ways in explaining Malawi's economic development level, but perhaps not all of it. It almost seemed like that "unexplained portion" is what you were after in the article, but you never said it explicitly.
2. I'm not a fan of the "tautology" critique. Development is fundamentally a complex process characterized by deep endogeneity and all manner of feedback loops that are hard to pin down. The factors you mention--ag productivity, lack of structural transformation, low human capital, etc.--are simultaneously outcomes of and inputs to economic development. This is the case in Malawi just like anywhere else.
Yes, one can and should dig deeper, but articulating these factors is itself useful because many of these things are both causes AND levers...the latter of which is important for policy.
3. The article frames institutions, geography, and colonial history as "proximate" — but the standard development literature treats these as deep causes of long-run income differences. See the diagram here from Rodrik and Subramanian's famous paper:
https://www.researchgate.net/figure/The-three-deep-determinants-of-income-by-Rodrik_fig1_325342409
Geography is hard to change, and institutions move slowly. The article's claim that these factors "don't predict outcomes nor satisfyingly capture much of the reason for variation" conflates two distinct questions: explaining levels of development and explaining changes in growth rates. Much of the institutions literature is explicitly trying to explain long-run income levels, not short-to-medium-run growth accelerations.
This matters because post-WWII growth in developing countries has been episodic — punctuated accelerations and decelerations — whereas growth in Western economies over the preceding century was more steady despite major disruptions. Slow-moving structural factors like institutions and geography are unlikely to explain these episodes on their own.
The interaction between slow and fast-moving factors (e.g., political dynamics, policy) probably matters a lot, and the article misses this.
4. The article states that Malawi's institutions are "broadly better than Rwanda's, Vietnam's, and China's." This is a claim that few if any development professionals would make, and it is almost certainly wrong. (I'd be surprised if this were true in the relatively poor quant measures we have of political institutions, and knowing friends who have worked in these places and having worked on some and been in all of them myself, I don't know anyone who would make such a claim.)
The institutions literature focuses as much on economic institutions as political ones--which you don't mention. We shouldn't necessarily equate formal democratic procedures — competitive elections, peaceful transfers — with institutional quality writ large (or even with genuinely inclusive political institutions, for that matter). Malawi may score reasonably on electoral competition while having weak economic institutions, which aligns with the political economy points around agriculture and land.
5. I'm not an ag or agronomy expert, but I do know through my own work that Malawi does in fact have some meaningful ag opportunities--in soya, sorghum, mangoes, and macadamia nuts, among others. The failure to capitalize on these opportunities points back to policy choices, political economy constraints, and the other structural factors listed elsewhere in the article
6. I've come to believe in the power of political economy explanations, which the article rightfully emphasizes. There is more literature out there that would help to unpack the emergence of the political settlement you mention.
More broadly, you mention political economy in the end as an important takeaway, after having framed it as describing an equilibrium rather explaining why it exists. Well, that sounds like a call to dig deeper on the political and economic history...not a reason to brush it off.
7. The claim that "development economics specifically exists to tell countries what to do" is not an accurate or widely shared definition of the field. Many development economists would not describe their work this way, and the field has a substantial body of work oriented toward understanding causes rather than prescribing action. This is why people like me and my colleagues, and people like Ken Opalo, make the distinction between academic research and policy research.
I think this points to a fundamental confusion between causes and levers. The causes of a country's development level and the available levers for changing it are separate problems. Geography may be a deep cause but is largely not a directly actionable lever — though transport infrastructure and trade integration offer partial handles. Trade and industrial policy are more tractable levers but may not be root causes.
The article opens by asking about causes and closes by criticizing development economics for failing to generate prescriptions. Those are different concerns, and conflating them doesn't actually get us much closer to answering the relevant policy questions.
Thanks for the substantive engagement, Kartik. A few points:
- You're right that the institutions phrasing was too loose. I was referring to political institutions narrowly understood (electoral competition, peaceful transfers), and on that narrow measure Malawi does score above the comparators. But "broadly better" was perhaps the wrong frame — economic institutions and state capacity are a different story.
- On framing: I don't actually necessarily think Malawi is uniquely puzzling, but it's easiest to demonstrate this point in a specific case, and Malawi is a relatively good one because it doesn't have major exogenous issues, as noted. This is a broader issue in development.
- The "tautology" critique was specifically about proximate descriptions ("low ag productivity") being treated as explanations, not about multi-causal accounts being insufficient — I definitely agree development is multi-causal.
- I'd push back on the causes/levers distinction. I agree they're distinct in principle. But the test of an explanatory framework isn't whether it post-hoc rationalizes outcomes — it's whether it would have flagged ex ante which countries would be more/less likely to grow. Development economics has been bad at this, which matters both for assessing the explanatory power of these frameworks and for making forward-looking predictions.
- On ag opportunities — agreed, and the interesting question is exactly the one you point to: why hasn't Malawi capitalized? Which brings us back to political economy.
Appreciate you taking the time to engage so thoroughly.
-So if indeed Malawi does better in international indices of political institutions than Rwanda, Vietnam, and China, I suspect that reflects a particular normative notion of what good political institutions are (which may or may not matter all that much for economic development) + the difficulty of measuring these sorts of institutions--as much as it reflects a reality wherein Malawi is in fact better on these margins.
-I'm not sure I get your point about tautology...what you point to are *both* descriptions and explanations. Again, I'm not sure of any country whose level of development can be fully explained by deep roots. The residual is large, and likely accounted for in part by a range of proximate factors as well as other factors that are hard to pinpoint (e.g., political dynamics and relationships, critical junctures, etc.)
-I think you didn't quite get my point about causes and levers. One aspect is that levels and growth are different. There are various attempts to identify factors that make some countries likely to grow faster than others going forward--e.g., a country's current economic complexity. One would need to explore empirically whether these hypotheses hold up. Only then can we say that we're bad at it.
Then there's the issue of levels. I think it may be trickier to predict levels of development precisely because a country's level of development is a long-term outcome and the result of a process that is highly contingent. In 1955, it was probably not at all obvious (or maybe not even on many people's radar) that Korea would get a leader that did all the things Park did to enable Korea's economic development. So I'm not sure we should expect development economists to be able to make predictions about long-term development when it seems to be dependent on such unforeseeable events.
So as not to defend development economists *too much*, the reason why these distinctions matter is because the causes vs. levers framing is precisely about practice, not solely about principle. It may be quite hard for development economists to do the type of prediction that you're referring to. But because economic development outcomes are multicausal and contingent, that doesn't mean there aren't still many levers to pull to try to achieve those outcomes. In other words, us practitioners aren't reliant development economists to tell us where to focus and what to do. We're essentially playing two different games.
James Robinson recently made similar points--perhaps the first time I'm hearing a development economist openly question the use of development economists for the practice of development. See 18:20, 1:24:00, 1:35:00, and 1:49:00:
https://youtu.be/lkn_IytQlJw?si=H4vg8c4Q99fcHbKg
good response. appreciate the effort involved.
Political econ the key, especially the political 'chiefly alliance' with the thin urban elite whose political base/legitimacy depends on the chiefs. So agric modernization next to impossible. Unholy combo but dug in.
It sounds like a simple enough answer, stable politics means that settlements can remain settled; and Malawi has settled on some of the worst policies for growth. The populace is content to do maize farming and receive international aid. Until that equilibrium changes (likely due to shrinking plots) then they will have upheaval.
You mention this tangentially but my impression is that climate is huge for Malawi: basically every year they have a "lean season" due to drought or flooding. Is that in the models, or are my impressions overblown?
You're right that climate exposure is a meaningful factor given Malawi grows rain-fed maize, has recurring drought, and has had recent cyclones (Idai, Ana, Freddy). The comparative case for it being the binding constraint is a bit weak, though. Other SSA countries face similar or worse climate stress and have higher yields, e.g., Ethiopia, or haven't but have grown faster anyway e.g., Mozambique. I also mentioned above that the empirical literature on landlocked + tropical penalties puts the combined drag at about 1-1.5% of annual growth, which I think is a useful datapoint here.
The interesting version of the climate point is that the political settlement amplifies Malawi's climate vulnerability. Customary land tenure blocks consolidation, which would enable irrigation investment at scale (<5% the arable land is irrigated), for example, and the maize self-sufficiency policy and FISP keep farmers growing a climate-vulnerable staple rather than drought-resistant alternatives like sorghum, or higher-value crops with different risk profiles.
So I'd say climate is a factor, but not binding in and of itself and its effects are largely downstream of the political settlement rather than a substitute for it.
I would not frame it as Malawi's coalition is failing to develop. It's succeeding at what it's actually organised to achieve. And that's the explanation the political settlements section arrives at.
The FISP subsidy, which consumes up to three-quarters of the agriculture budget, the maize self-sufficiency policy that caps farmers' returns, and the customary tenure that protects chiefs' power aren't policy failures or short-termism. They're the predictable output of a coalition that purchases compliance through distributed benefits — and the MIP record confirms it: resources went to maintaining the existing agricultural setup, not reforming the economy.
Every developmental programme eventually reaches the point where vested interests within the coalition have to yield some privilege to make what comes next possible. That moment arrives regardless of intent. The question is whether the coalition can bear it.
Malawi reform efforts have repeatedly failed: FISP reform, maize export policy, land tenure — each diluted or blocked when the costs reached insiders. When compliance is purchased rather than demonstrated, there is no foundation to draw on when harder demands arrive.
What distinguishes this from Rwanda isn't democracy versus authoritarianism. Formal democratic procedures aren't the same as institutional quality, and Rwanda's formal institutions score poorly on most measures. The difference is that the RPF expected real costs to be absorbed on its own side before any growth record existed to justify them, which made external discipline credible when it arrived. The question for Malawi is whether its governing coalition could ever be asked to do the same.
Shared exposure to failure is what makes insider sacrifice politically survivable, and it almost always involves a reset moment, a crisis deep enough or an existential threat visible enough to suspend the normal defection calculus. The question for Malawi is what would constitute that reset, and whether demographic pressure, fiscal crisis, or climate exposure might be forcing it.
Thanks Stephen, this is maybe a more pointed version of the argument than I made. The FISP/maize/tenure complex is certainly not an accident or pure dysfunction, but the political system working as designed.
On the RPF comparison, you're right that the relevant contrast isn't democracy vs. authoritarianism but rather whether the governing coalition can credibly absorb costs of new programs before the growth payoff materializes. Malawi's problem appears to be that no faction within the coalition has ever had to accept short-term pain, so there is not much driving that.
On the reset question, I think demographic pressure is the most likely forcing function, but it'll take a while. Plot sizes are already subdividing toward unviability, and at some point the smallholder-maize equilibrium stops being stable. Fiscal crisis could accelerate this (e.g., FISP becoming entirely unaffordable, a reallocation in donor spending) but Malawi has muddled through fiscal stress before without that changing much. Climate I'd put third, in large part because previously cyclones don't seem to have created appetite for reform.
Very interesting analysis! I think you have an unstated assumption here though that once we understand it, we should be able to fix it, and any understanding that doesn't yield solutions is not "true understanding".
It seems like the main story is that Malawi is stuck in a bad but quite stable equilibrium, and has almost any exogenous factor you can name working against it. I don't like arguments for revolution or breaking down established systems but this might be the case where some kind of destabilizing factor is necessary to get out of the bad equilibrium. I guess a pending Malthusian crisis would provide this on the default path?
Malawi doesn't sell much to the rest of the world. I think this is the main problem. Exports of goods & services are 30.8% of GDP in Rwanda and 11.2% in Malawi. You did mention trade, but you didn't push the point enough I think. This is partly due to geography. Landlocked Lesotho escaped that fate by leveraving neighboring South Africa infrastructure while having significantly lower wages. Rwanda did it by having a government highly focused structural transformation. Malawi is the proof that being relatively stable and not especially corrupt but without any structural transformation obsession (Rwanda) or geographical luck (like Lesotho) won't take you that far.
Thanks Carl-Henri. You're right that trade is important. The export/GDP gap is striking. I mention that growing maize and tobacco are probably suboptimal choices that are both locked in by existing incentive systems, and I think that's at the core of this gap. Many other countries have successfully diversified into more climate-stable staple or more lucrative export crops over time.
Your Lesotho and Rwanda contrasts are useful and I'd say they make the same point from different angles. Lesotho got AGOA preferences plus proximity to South African infrastructure, and Rwanda had a coalition willing to absorb upfront costs in pursuit of structural transformation. So I'd frame low export share less as a cause of poverty than a symptom of a coalition that hasn't been organized to pursue export-led growth.
Thanks for this immersive and provocative piece. Out of curiosity, where do you situate Joe Studwell’s submission of three developmental impediments, one of which I think you’ve tackled, namely the low budget colonialism. Would you care to comment on his positing of the most important impediment as being chronically low population density, which I told him I found rather surprising?
Thanks Sean! Studwell's How Africa Works is a useful framework. The low-budget colonialism leg fits Malawi well; I touch on the point that the labor-reserve administration left little infrastructure or human capital behind.
On density, I share your skepticism. Studwell's argument is really historical: that tsetse fly and the slave trade kept African population density low for centuries, which discouraged urbanization and the kind of dense market economies that drive growth. Could be a plausible description of why Africa diverged from Eurasia over the long run, but not so useful for this context.
Malawi is among the more densely populated countries in sub-Saharan Africa (~224/km² in 2023, well above the regional average). If anything, density is high enough that customary plots are subdividing into increasingly small pieces across generations, which compounds the problem.
The deeper question is why Malawi hasn't executed on the prescriptions Studwell endorses, like smallholder agriculture with state support, export-oriented manufacturing, financial repression in service of industry. That cannot be answered via population density and points us back to the political settlement.
Can too much foreign aid harm growth?
Yes, Dutch Disease effect. In Malawi aid finances consumption rather than productive investment.
Thanks. Could part of it also be that high levels of aid in Malawi are stabilizing an unproductive equilibrium? Or is that just describing "Dutch Disease" in a different way?
There is no “Aid Dividends” if am allowed to call it that. So yes, high levels of Aid in Malawi are stabilizing (or worsening) an unproductive equilibrium.
You could probably learn a lot by reading about how terrible Hastings Banda was and his successors.
But when it comes to rwanda I wrote a series here:
https://yawboadu.substack.com/p/the-economic-and-geopolitical-history-4cf?utm_source=share&utm_medium=android&r=garki
https://yawboadu.substack.com/p/the-economic-and-geopolitical-history-fce?utm_source=share&utm_medium=android&r=garki
Rwanda takes a lot of Congolese minerals (as does Uganda), also pre-kagame the hutu leaders were pretty terrible. They depended entirely in exporting coffee and when coffee crashed, rwanda was in a balance of payments crisis.
I think that you answered your own question:
“Malawi has also long been a darling of donors.”
I always thought the answer was Kamuzu Banda's political economy. He deliberately organized it around smallholder maize agriculture and chiefly land authority, and that structure locked out industrialization before democracy even arrived. 30 years later, the fertilizer subsidy program, the customary land tenure system, and the political power of the rural maize farmer are all direct inheritances from that era. Reading this though, I'm realizing I need to think about it more carefully
SSAs perform worse than any peers even at similar GDP per Capita levels,and poor democracies struggle to grow,and Malawi is both a SSA country and a poor democracy
I do not know much about Malawi, but I don’t understand how you can possibly say that low-productivity agriculture and geography are merely descriptions or tautologies and not potential causes. Both came long before the modern era and are difficult for humans to change.
Low-productivity food systems have been the most important constraint on the development of human societies all throughout history, so why would it suddenly vanish as a possible cause in the modern era?
If one focuses on why Sub-Saharan Africa is significantly poorer than most other regions, then I think you must include agricultural productivity and geography as very significant causes. Maybe it does not explain why Malawi ranks lower than other African nations, but that is far from the claim that “we do not know why Malawi is poor.”
As an example of the explanatory power of both, see articles that I have written:
https://frompovertytoprogress.substack.com/p/how-geography-constrained-development
https://frompovertytoprogress.substack.com/p/the-deep-roots-of-african-diversity
Seems like you didn't address the tropical part of the geography claim. Rwanda is at a much higher elevation than Malawi and that almost certainly contributes a disproportionate amount to the outcomes
Lovely article. Thank you. Analytical and measured. Is the primary conclusion that social structure has exacerbated the impact of the other disadvantages, eg which crops are suitable, and not enabled Malawi to take advantage of positive factors such as democratic stability? Do you have a recommendation about the policies Malawi should adopt? Is a shake up of rural land tenure needed? Would urbanisation help?