SUMMARY Malawi is perceived by many donors as a ‘virtuous case’ and a relatively effective user of aid. Although many of these perceptions date from the economic boom of the 1970s, performance in recovery from balance of payment difficulties has also been impressive as aid has shifted towards programme lending with linked policy reforms and away from new projects. This article considers these claims and reviews the effectiveness of donors' sectoral interventions, particularly in transport, agriculture and in technical assistance, scrutinises the ‘institutional destruction’ argument relating to donor proliferation; and analyses how conflicts over policy are resolved. It concludes by identifying the key factors from Malawi's experience with ...