Poverty Reduction Strategy Papers (PRSPs) - Are they making a difference? Carol Healy, Development Education and Research Network (DERN)

Synopsis Background Principles and Goals of PRSPs Positive Elements Critique of PRSPs in their current form –Goals and principles in practice –Political Issues –Implementation

Poverty Reduction Strategy Papers (PRSPs) What are they? –Introduced in 1999 –National Programme for Poverty Reduction –Established to ensure the proper use of debt relief under the Enhanced Highly Indebted Poor Countries Facility (HIPC2). HIPC countries are entitled to debt relief after 1 year of successful implementation of the full PRSP

Background to PRSPs 2000: World Bank “Voices of the Poor” Survey. World Development Report 2000 – 2001 Now the new “pro-poor” development plan –Promoting opportunities –Facilitating empowerment –Enhancing security

PRSPs Interim PRSPs (I-PRSPs) –Outline the causes of poverty as well as the consultation process for the drafting of the final PRSP Full PRSPs –Established once countries submit an interim PRSP and consult with the World Bank and IMF (in a “Joint Staff Assessment”)

PRSP Core Principals 1. Country- driven 2. Results Orientated 3. Comprehensive 4. Partnership-orientated 5. Based on a long term perspective of poverty reduction 6. Participatory

PRSP Goals 1. Promote Pro-poor growth 2. Promote empowerment by encouraging good governance (includes fiscal management and decentralised government) 3. Enhance human capital through improvements in health and education

Positive elements of PRSP Poverty reduction now at the core of the PRSP agenda Better coordination between states, donor agencies and beneficiaries as poverty reduction now the responsibility of finance ministers Improved dialogue: policy makers consult with the population on the limitations caused by poverty. (Helped to prioritise the needs of the poor)

Positive elements of PRSP Better accountability? –Governments obliged to discuss poverty and what they are doing about it with their citizens, they may take poverty reduction more seriously, and be held to account more effectively –Increased trend towards scrutiny of local and national government officials by citizens on budget expenditure issues Civil society has a deepened knowledge of budgeting / financial issues

Problems with the PRSP PRSPs and Goal 1: Promoting Pro-poor growth Pro-poor growth reduces inequality, so that the poor benefit proportionally more than the rich BUT: Redistribution issues BUT: Macro-economic policies similar to Washington Consensus policies

Polarization AND deprivation – the poor ARE falling further behind and the incomes of 40% are too low UNDP HDR1992,

Problems with the PRSP The PRSP and the Poverty Reduction and Growth Facility (PRGF) Participation in the PRGF Aligning the PRGF to the PRSP??? (EG Mozambique)

Mozambique PRGF and PRSP PRGF 2004 June nd PRSP March 2006 Issue of: Ownership?

Problems with the PRSP Goal 2: Promote empowerment by encouraging good governance - Empowerment and good governance can be achieved through decentralisation - Empowerment achieved by greater participation BUT: meaning of participation?

2005 IMF and World Bank PRSP Review: ‘Participation does not imply final consensus or that views garnered through participatory processes will necessarily be reflected in final programmes. Instead, participation should enable policy choices to be better informed’

Problems with the PRSP EGs of Uganda, Honduras, Nicaragua, Zambia, Tanzania Role of Parliaments? Format of consultations Language Dissemination (Mozambique)

Problems with the PRSP Issue of capacity to participate in the process? -‘Supply-driven’ civil society? (getting involved in what is currently fashionable) PRSP has been criticised for not openly discussing: –Industrial policy –Trade protection –Subsidy support to domestic markets Invited versus Created spaces

Problems with the PRSP Goal 3: Enhancing human capital by improving health and education Increased funds for health and education Focus on AIDS, TB and malaria: donor priorities or national priorities?

Politics and the PRSP Mandate of the IMF and World Bank prevents them from being involved in politics. This has meant the PRS process has been highly technocratic Line ministries beyond Education and Health are often only very loosely involved PRSP and decentralisation (EG Ethiopia) New governments (Honduras and Nicaragua)

Implementing the PRSP Discrepancies in terms of policy documents and their implementation (EG Zambia) Annual Progress Reports

Case Study – Tanzania Tanzania: 60% of Tanzania’s population lives below the poverty line. BUT: Genuine government commitment to reform, Donors have galvanised around the PRSP, Important shifts in policy; eg free primary school education. Success: Poverty reduction has been on Tanzania’s policy agenda since PRSP is based on the country’s Vision 2025 document, and it’s National Poverty Eradication Strategy, both of which were adopted in Government commitment to poverty reduction before the implementation of the PRSP.

Case Study - Malawi Malawi Prior to the PRSP, Malawi had no real poverty reduction policy 1994: launched a poverty alleviation programme, BUT: no real plans on how, how much, or when poverty would be reduced it published Vision 2020, but this was not followed by fundable action. Malawi has not had the fiscal management that Tanzania has: expenditure ceilings are frequently ignored by line ministries and other government agencies. Countries with a prior commitment to poverty reduction have greater ability to implement the PRSP? Why? –higher degree of national ownership

Conclusion Legacy of Participation but… –No radical change (neo-lib with a friendly face?) –Civil Society weak/ ignored –A political technocratic debate –Other drivers (donors/politics) Invited versus Created spaces

Recommended Reading D. Booth (2003) Are PRSPs making a difference? The African Experience. Development Policy Review, Vol 21, No. 2 D. Booth (2005) “Missing Links in the Politics of Development: Learning from the PRSP Experiment” ODI Working Paper 256 D. Craig and D. Porter (2003) ‘Poverty Reduction Strategy Papers: a New Convergence’ World Development Vol 31, No 1 J. Gould (ed) (2005) The New Conditionality. The Politics of Poverty Reduction Strategies. Zed Books IIED (2005) Participatory Learning and Action. Civil Society and Poverty Reduction. IIED Oxfam (2004) ‘From Donorship to Ownership? Moving Towards PRSP Round 2. Oxfam Briefing Paper 51 F. Stewart and M. Wang (2003) ’Do PRSPs empower poor countries and disempower the World Bank, or is it the other way round?’ QEH Working Paper Series. Working Paper No. 108