ABSTRACT
This chapter focuses on the Liberian political economy. It discusses governance, decentralisation and County Development Funds (CDFs) as a form of budgetary decentralisation. The chapter outlines the role of the International Financial Institutions (IFIs), using the Public Financial Management Act (PFMA), Governance and Economic Management Assistance Programme (GEMAP) and Liberia Extractive Industries Transparency Initiative (LEITI) as examples. It explores how IFI conditionality and reforms have been instrumentalised to provide the elites with new opportunities to appropriate state-building practices to further modify institutional de facto power arrangements, as demonstrated in the case of the PFMA. Local elections relate to both democracy support and the decentralisation agenda. Strong Gross Domestic Product (GDP) growth in Liberia does not translate into social development or sustainable domestic economic development. Instead, growth is sustained by concessionary economic policies. State-level corruption in Liberia is systemic, predatory and extractive. It is deeply imbedded with the extractive economy and the predatory nature of the state.
