The PRSP Initiative:<=
span
style=3D'mso-spacerun:yes'> Multilateral Policy Change and the=
Role
of Research
ODI working paper 216=
(August
2003)
Karin Christiansen wi=
th Ingie
Hovland.
Main questions:
How did the idea of P=
RSP come
to be adopted?
What was the role of =
research
in this process?
Policy decision ̵=
1;
adoption in September 1999 by the Executive boards of the World Bank and the
IMF of the Poverty Reduction Strategy Paper.
What is a PRSP?
A document that sets =
out an
analysis of poverty in a country and defines a national strategy for reduci=
ng
it. (p. 3).
General pattern: An interim PRSP (IPRSP) is drafted=
by
the national government. This=
is a
‘road map’ to drafting the final PRSP. Consultation and data analysis are
supposed to come between these two as a way to refine the plan. There is supposed to be evidence
“…of the participatory process undertaken, a ‘comprehensi=
ve
poverty diagnostic’, clear and costed priorities and targets, indicat=
ors
and a system of monitoring and evaluating progress.” (p.3)
The IMF and World Ban=
k review
it, and make a Joint Staff Assessment (JSA) [reneamed the Joint Staff Advis=
ory
Note following a review in 2004]
http://www.imf.org/ex=
ternal/np/jsa/index.asp
Then make annual prog=
ress
reports. For a big list of all
kinds of PRSP related stuff see:
http://www.imf.org=
/external/np/prsp/prsp.asp#cp
Five core principles:=
=
1)&n=
bsp; Country driven
a.&n=
bsp;
Participato=
ry
approach to definition
b.&n=
bsp;
Assurance of
‘buy-in’
=
2)&n=
bsp; Medium to long term in perspective
=
3)&n=
bsp; Comprehensive in recognizing the multidimensional
nature of poverty
=
4)&n=
bsp; Results-oriented – focus on outcomes that =
will
benefit the poor.
=
5)&n=
bsp; Partnership oriented – involving coordinat=
ed
participation of bilateral, multilateral, NGO, government, and civil societ=
y.
[sometimes 3 and 4 ar=
e put
together]
IMF website states the
following (as of today)
&=
#8220;The
PRSP approach is by now well established in a substantial number of countri=
es
and has been associated with major advances in country ownership, making
poverty reduction more prominent in policy debates, and facilitating more o=
pen
dialogue. As of end-August 2005, 49 full PRSPs have been circulated to the =
Fund
Executive Board, and an additional 11 countries have completed preliminary,=
or
“interim”, PRSPs.”
Christiansen also not=
es that
embarking on the PRSP is an entry criteria for accessing debt relief under =
HIPC
and for accessing low income country concessional lending from the IFIs.
Policy context based =
on page
9:
|
1960s |
With donor support,
developing governments displace private sector: nationalization, government led
industrialization |
|
1970s |
Donors displace
government: donor driven pr=
ojects
with management structures outside government |
|
1980s |
Donors ask governme=
nts to
change policy by responding to ‘conditionality’, return of the
private sector. |
|
1990s |
By late 90s, move t=
oward donor
partnership with government, attempts to ensure government buy in, direct
budget support, sector programs. |
|
2000s |
Increased emphasis =
on
participation, governance, accountability, decentralization both in terms=
of
donor –government and also within nations. |
They suggest “t=
he
underlying event that allowed the aid agenda to shift in operational terms =
was
the end of the Cold War in 1989”&nbs=
p;
(p. 9).
Other factors:
Growing research and
broadening definition of poverty though the 90s.
Growing emphasis on
participation in both research and development practice (discourse?) One argument – leads to bett=
er
development. Second, improves=
quality
of governance.
Growing sense that st=
ructural
adjustment did not work as planned.
Growing frustration t=
hat the
“project” strategy (associated with the 70s theme above) did not
seem to be all that successful. End
run around government had problems of its own that were becoming apparent. =
By the late ‘90=
s, a set
of issues came together.
=
1)&n=
bsp; IMF being criticized for the role played in the =
1997
Asia Crisis, internal and external reviews of the ‘Enhanced Structural
Adjustment Facility’ (ESAF).
Camdessus since 1987. =
‘social
dimension of structural adjustment’ approach is not seen as sufficien=
t.
=
2)&n=
bsp; World Bank being criticized for the growing sens=
e that
their Structural Adjustment Programs, particularly in SSA, were not
working. Things seemed to be =
getting
worse if anything. Wolfensohn=
’s
arrival in 1995.
=
3)&n=
bsp; IMF and World Bank falling out of coordination a=
round
the previously used Policy Framework Paper / introduction by WolfensohnR=
17;s
Comprehensive Development Framework (WB arguably started moving first, IMF =
came
along after). Both sensing a =
need
for more country ‘buy-in’ of policy.
=
4)&n=
bsp; Heavily Indebted Poor Countries Initiative (HIPC)
launched in 1996/7 but encountering some problems.
=
5)&n=
bsp; DFID with a focus on poverty reduction following=
1997
election, with DFID being elevated to separate ministry. DFID had been developing a focus on
poverty reduction, sustainable livelihoods, participatory methods…Str=
ong
research component. Also brou=
ght
about a focus on indicators and targets.
=
6)&n=
bsp; US with ‘Cold War guilt’ and role in=
/
concern over economic crises in Mexico, Argentina, Russia, Asian financial
crisis, Turkey,….Politics of aid, want to help deserving poor, not
undeserving poor. Surveys find
people think 15% of
=
7)&n=
bsp; Jubilee 2000 focus on debt relief, NGO critiques,
anti-globalization protests….Wolfensohn and Camdessus getting a lot of
heat.
=
8)&n=
bsp; G7 getting a bit impatient with WB / IMF squabbl=
ing.
The
It appeared to be rel=
atively
effective in improving things in
This had a plan in pl=
ace that
seemed relatively successful. There
was a sense that something that merited wider expansion had been identified=
.
The ESAF reviews of 1=
998 (one
internal one external). These=
had
an impact because: they were =
IMF
commissioned; they were pretty consistent; they did not question the basic
policy content; they were written by mainstream economists. (p. 25)
Growth of concern abo=
ut debt
relief: both moral and effici=
ency
arguments are made. Debt reli=
ef
more palatable if linked to poverty reduction strategy.
The World Bank funds =
come as
part of the country assistance strategy (CAS).
The IMF funds through
accounts which are in the Poverty Reduction and Growth Facility (PRGF). http://www.imf.o=
rg/external/np/exr/facts/prgf.htm
Cutoff is $895 GNI pe=
r head
(2003 dollars).
Loans carry annual in=
terest
rate of 0.5%, repay semi-annually, begin repaying 5 years after disbursemen=
t,
end 10 years. 78 countries on=
the
eligible list, not all have used this access.
HIPC went through a r=
eview in
1999 that led to the explicit linking of external assistance, debt relief, =
and
poverty reduction (sometimes see HIPC1 and HIPC2).
http://www.imf.o=
rg/external/np/exr/facts/hipc.htm
Eligibility for HIPC:=
·
PRGF eligib=
le
(and WB eligible).
·
Heavily
indebted: NPV of debt above 1=
50% of
exports or above 250% of government revenues.
·
Good track =
record
of reform.
(42 countries meet th=
ese
conditions)
29 countries are in t=
he HIPC
program, 11 more are working on it
For those who went th=
orough
the process:
·
Debt stocks
reduced by 2/3rds in NPV terms.
·
Debt servic=
e over
2001 to 2006 reduced by about half.
Trying to get the inc=
entives
right on multiple levels:
·
Moral hazar=
d of
debt relief.
·
Commitment
problem in structural adjustment.
·
Ex post
monitoring, enforcement, accountability.
·
Desire for a
particular type of growth – poverty reducing growth.
·
Potential n=
eed
for policy coordination where coordination enhances all efforts.