The paper starts by providing a brief overview of CDF practices in other countries. From this overview, the paper draws three main lessons. Firstly, CDF has the potential to address urgent development needs and gaps between constituencies. But its effectiveness can be marred by a lack of transparency and accountability mechanisms. Secondly, CDF violates the separation of power between executives and the legislature and risks diluting the democratic process with patronage politics. Thirdly, CDF distorts political competition because it provides the elected representatives of the ruling party with better tools to influence voters’ choices.

With an understanding of the global practice, the paper examines how Malaysia manages its CDF. With the limited publicly available information, the paper attempts to outline the source of financing for CDF allocation to lawmakers at the state and federal levels, the purpose and distribution, the rules and process of disbursement, and the monitoring and oversight mechanisms.