We don't know why Malawi is poor

3 hours ago

Malawi's GDP per capita has stagnated and is now lower than Rwanda's and much of East Africa, despite starting from a higher base in 1994.
The country exhibits extreme poverty indicators: 70-75% live below poverty lines, it has a high share of the world's extreme poor, and most work in low-productivity agriculture.
Malawi lacks obvious single-cause explanations for its poverty, as it has been peaceful, democratic, and a major aid recipient without severe conflict or resource curses.
Common development theories like institutions, geography, colonial history, trade policy, and agroecology offer partial explanations but fail to fully account for Malawi's unique stagnation compared to peers.
A political settlements perspective highlights a stable equilibrium favoring smallholder maize farmers as median voters, leading to policies like fertilizer subsidies, maize self-sufficiency, and customary land tenure that inhibit structural transformation.
Development economics struggles to predict growth outcomes, as proximate factors often restate outcomes rather than explain variation, and the field's explanatory toolkit has limited predictive power.
Key insights include focusing on political coalitions as the unit of analysis, distinguishing causes from policy levers, and being skeptical of growth forecasts that ignore political settlements.

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