The primary objective of this PublicExpenditure Review is to analyze the macro-economicunderpinnings of the Madagascar Action Plan (MAP), to reviewif the existing procedural and institutional framework forthe generation and the use of public resources facilitatesMAP implementation, and to provide guidance andrecommendations for effective and successful implementationof the new development strategy. This report, which followsthe one published in 2005 for the 1997-2005 periods, is partof a series of programmatic reviews agreed upon with theGovernment of Madagascar. It differs from typicalexpenditure reviews as it was prepared in closecollaboration and partnership with the Malagasyadministration and represents the joint efforts of amultidisciplinary team. This Public Expenditure Reviewconsists of five volumes: the first volume being theexecutive summary and the second provides a global analysisof the environment within which the MAP will be implemented.Three other volumes deal with the health, nutrition andwater and sanitation sectors.