The review process set out to gather the views of low income countries, development partners and other stakeholders and culminated in an international conference on the PRSP approach in January 2002.
10.1 A broad consensus
The review confirmed ‘broad agreement among low-income countries, civil society organisations and their development partners’ on the value of the PRSP approach for poverty reduction. Participants agreed that process and content had improved with experience.
There was a growing sense of ownership of poverty reduction strategies by governments and many civil society organisations, more open dialogue between them, and greater attention to poverty reduction in policy debates. Major donors and UN agencies have accepted the PRSP approach.
Main themes underlying this consensus are:
To improve the preparatory process and content of strategies countries should:
- The importance of country ownership
- Shifting from process to content and implementation, and understanding the links between policies and poverty outcomes
- The importance of using and building local capacity
- The need for realism in setting targets and goals and managing expectations
- The importance of openness within countries and in international development partnerships
- The importance of flexibility to allow for different country starting points
- The desirability of debate about alternative policy choices
- The importance of patience and perseverance in implementation.
The review looks at key findings on a range of issues and suggests good practices to address them.
- Improve public expenditure management (PEM) systems
- Emphasise and build capacity for monitoring and evaluation
- Strengthen and institutionalise participatory processes with a broad range of domestic stakeholders and development partners.
10.2 Participatory processes
Here the review notes the importance of the open and participatory nature of the PRSP approach, and the need to improve participation by parliaments and other groups that have not been fully involved. These include civil society organisations out of favour with government, local government officials, private sector representatives, women’s groups and direct representatives of the poor.
Sustaining and building stakeholder involvement, making information available and easier to understand, improving feedback mechanisms and involving donor round tables in the drafting process.
For donors, the Bank and the Fund the need to give timely and constructive feedback and support civil society capacity building, and for the Bank and Fund to link the whole country team to the PRSP, inform stakeholders about activities and indicate the extent of participation in JSAs.
10.3 Conflict affected countries
The review notes problems confronting these countries in preparing PRSPs including weak administrative capacity, poor data, weak security and a fractured social and political environment. The consensus is that the existing framework is flexible enough to meet their special needs.
Donors, the Bank and the Fund should improve coordination and timeliness of support and support conflict analysis, prevention and peace building. The Bank and Fund should sensitise country teams and be flexible in applying JSA guidelines especially around participation, quality of analysis and detailed articulation of policies.
10.4 Monitoring and evaluation
The review notes that the PRSP process has generally improved performance in these areas but has also highlighted weaknesses. PRSPs have not included poverty and social impact analysis of major policies and programmes, largely because of capacity constraints and technical difficulties. While measurement of final poverty outcomes/impacts is improving PRSPs often lack good intermediate indicators to help track the implementation of public programmes.
Developing the necessary institutions, analysing the social and poverty impact of major policies and programmes, setting realistic targets and developing appropriate intermediate indicators. For development partners, the Bank and the Fund, good practices include supporting and assisting this work. The Bank should lead in assisting governments with poverty and social impact analysis.
10.5 Clarifying priority public actions
The review notes the lack of prioritisation and specificity in PRSPs to date. While recognising macro economic stability as essential to growth and poverty reduction there was little discussion of the links between macro economic and structural policies and poverty reduction. Analysis of likely sources of growth did not back ambitious growth targets.
Allocation of public spending to poverty reducing activities including health and education was not backed up, except in the case of Mozambique, with a discussion of revenue measures. Gender issues were generally weakly represented outside the health and education sectors, HIV/AIDS coverage was weak, and while most PRSPs featured governance and corruption, they generally failed to identify major challenges or indicators to monitor progress.
Rural development features as a cross cutting theme with the focus on increasing access to, and productivity of, natural resources and improving rural health and education. The discussion of rural issues tends to be brief and vague on implementation, making it difficult to assess the likely impact.
Social protection programmes receive little coverage in African PRSP programmes in contrast to those from Latin America and the European Community and Asian countries.
PRSPs generally acknowledge the importance of the private sector for growth, and poverty reduction but coverage of related structural issues varies. They also recognise the importance of small and medium enterprise for income generation. Several PRSPs include measures to improve the environment for small and medium enterprises and some also focus on better credit and savings opportunities for the poor including rural credit. Infrastructure is an important element in growth strategies with the focus generally on rural areas.
While all full PRSPs support open trade, they are limited on underlying issues and do not deal specifically with the experience of past trade reforms. Some including Mozambique have specific measures to support trade liberalisation but do not clarify the link between these reforms and growth and poverty reduction.
These include: detailed discussion of macro economic frameworks and pro poor growth strategies; developing alternative macro economic scenarios including contingency spending plans and alternative revenue paths, policies to reduce risks from external shocks and/or ensure debt sustainability; improving the efficiency of services to the poor, improving prioritisation and specificity with consideration of cross cutting and sectoral issues; reviewing governance and institutional development problems to build consensus on the main governance challenges to poverty reduction; developing core skills including PEM, poverty diagnostics, monitoring and indicators in sectoral ministries.
For development partners, the Bank and the Fund good practices include: fostering civil society capacities for prioritising, benchmarking and monitoring progress on governance; investing in tools about sectoral and governance-poverty links and supporting adaptation for different countries; supporting line agencies to produce sectoral strategies based on the PRSP approach; deepening efforts to understand the links between policy action and pro poor growth. The Bank and Fund to devote sufficient resources to support training, economic sector works and technical assistance.
10.6 Managing public expenditure
In many countries public expenditure management (PEM) systems are too weak to present the overall public expenditure programmes in the PRSP and to monitor implementation. Domestic stakeholders and donors have highlighted the importance of improving PEM systems.
Outlining the current state of the PEM and plans for improving it in the PRSP, and outlining plans for developing a medium term expenditure framework where this does not exist. For development partners, the Bank and the Fund good practices involve providing resources and technical assistance for this purpose.
10.7 Improving the integration of PRSPs into other decision making processes
Generally governments are committed to preparing PRSPs at the highest levels. In some countries however the PRSP is not clearly linked to established government planning and strategy processes and is primarily driven by HIPC and Poverty Reduction and Growth Facility (PRGF) schedules. The PRGF is a parallel process to the PRSP. (See next paragraph)
Integrating the PRSP with other government decision making processes, including the budget.
10.8 Improving donor alignment and harmonisation
Harmonising and aligning donor processes with PRSPs is crucial for their success and the Bank and Fund have a special responsibility to do this. The Purpose of the IMF’s review of the PRGF is to secure this alignment and clarify links between the processes.
Involving donors in PRSP preparation and actively coordinating the alignment of the local donor community and disclosing lending and granting PRSP documents. For development partners, the Bank and the Fund aligning their business plans with PRSPs, identifying alignment issues and encouraging openness and transparency on funding issues, simplifying access to donor aid, expanding programmatic lending and improving the predictability and timeliness of aid flows.
For the Bank and Fund, align the Fund’s PRGF and the Banks country specific business plans with PRSPs, publish country documents in the language of origin, enhance transparency by allowing authorities to voluntarily disclose documentation submitted in support of lending, strengthen internal review of lending programs to align them with PRSPs and streamline conditionality.
10.9 Balance between speed and quality for HIPCs
A common criticism is that governments, especially of HIPCs are induced to sacrifice quality in order to access debt relief quickly. The review notes that in many cases the interim relief available between decision and completion points for the PRSP is a substantial share of the relief available after the completion point is reached. The need for flexibility this will be assessed case by case.
10.10 Future Monitoring
Effective implementation is more likely with regular monitoring, evaluation and revision of strategy, but there are concerns about the burden this will place on government capacity.
Preparing and publishing annual progress reports with forward looking policy matrices, deciding on appropriate periods for revision (up to five years) in line with existing planning cycles, publicly announcing a new governments intentions for the PRSP after a change of government.
For the Bank and Fund, maintain the annual reporting requirement and develop guidelines for reports and give greater attention to risk evaluation including projected growth rates and vulnerability to external shocks and financial flows.
The review notes that the international community should continue to monitor the experience of low income countries in implementing the PRSP approach and should support the development of their capacity to learn, disseminate good practice and enhance the knowledge base and understanding of growth and poverty reduction.
PRSP focus based on
IMF, 2002, Poverty Reduction Strategy Papers, www.imf.org/external/prsp/prsp.asp
_____, 2002, Factsheet – Debt Relief under the Heavily Indebted Poor Countries (HIPC) Initiative www.imf.org/external/np/exr/facts/hipc.htm
World Bank, 2002, Review of the Poverty Reduction Strategy Paper (PRSP) Approach:
_______, 2001, PRSP Sourcebook Overview;www.worldbank.org/poverty/
Save the Children UK, 2001, Save the Children UK submission to the IMF/WB review of PRSPs www.sarpn.org.za"