Analysis of the political economy of agricultural policies in Malawi: a case study of maize policies

Producer Support Estimate (PSE) for the staple food crop maize were calculated in this study to add to knowledge on the incentives and disincentives that created by public policy in agriculture. All the PSE were negative implying that producers are implicitly taxed through policies that transfer income from producers to consumers. Using a Newey –West regression analysis political economy explanations to agricultural protection were tested. It was observed that; PSE increased with increasing levels of social accountability, international donor pressure and declining production. Neopatrimonialism was also found to negatively affect producer support.Autoregressive Distributed Lag model results show that the PSE granger causes production and that one percent change in PSE results in a 0.24% change in national maize output. Evidence from the ARIMA model showed that the political power varies with changes in maize prices and income. In general, the results obtained in this study show that the policy making process in Malawi is not driven by efficiency motives alone but rather a political economy framework with its own demands that have to be understood. The following recommendations are therefore put forward; policy stakeholders should have an understanding of political preferences and incorporate them in their policy options if their advice is to be relevant in the policy processes; interest groups have shown to have strong influence on policy outcomes therefore policy reforms should be designed in a way that ensures that affected groups accept reform to avoid political pressure induced reversals.