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Reducing poverty or repeating mistakes?: a civil society critique of Poverty Reduction Strategy Papers

Katherine Cash

December 2003

Posted with acknowledgements to Church of Sweden Aid, Diakonia, Save the Children Sweden and the Swedish Jubilee Network
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Reducing poverty or repeating mistakes?: a civil society critique of Poverty Reduction Strategy Papers
Executive Summary

In the last decade poverty reduction has become the buzzword of international development circles. In 1999, after growing public critique, the World Bank and the International Monetary Fund moved away from Structural Adjustment Programmes, and adopted a new approach - Poverty Reduction Strategy Papers (PRSPs). Under this new approach national governments are to develop their own national poverty reduction strategy as the basis for accessing lending and aid grants from international donors. One of the key elements of PRSP is 'national ownership'. For a PRSP to be nationally owned strategies are to be developed with broad-based participation from civil society.

This paper aims to summarise partner experiences, perspectives and positions on PRSPs. Partner organisations to the Church of Sweden Aid, Diakonia and Save the Children Sweden have extensive experience of participating in the PRSP approach. The paper is based on documentation provided by partner organisations from nine countries: Bolivia, Honduras, Nicaragua, Burkina Faso, Mozambique, Zambia, Vietnam, Cambodia and Bangladesh.

Partner critique of PRSPs is extensive and focuses on the roles played by and the capacities and commitment of governments, donors and civil society itself in relation to three different aspects of the PRSP: the process of developing PRSPs, their contents and the implementation and monitoring. A wide range of constructive recommendations are made by partner organisations to government, donors and civil society.

The paper will serve as a resource to the Swedish organisations in the development of their positions and advocacy work on PRSP in Sweden, as well as serving as a basis for further dialogue with partners and other relevant stakeholders.

PRSP Process

Partners have been deeply involved in working with the PRSP. The participation processes they have engaged in have been varied in scope and nature. Nonetheless many common issues are raised.

Lack of appropriate participatory frameworks

Partners express concern that the lack of appropriate institutional frameworks for participation has led to a widespread failure to facilitate broad based participation and poor quality participatory processes for those who can participate. This has negatively affected the quality of PRSP contents and national ownership and given undue power to IFIs and donors. Examples of the failure to facilitate broad based participation are:

  • Lack of frameworks for the participation of women, children, young people, indigenous groups and rural communities and their conse- quent exclusion.
  • The language used for the process has often excluded important government decision-makers, limited civil society participation, excluded rural and minority populations and given foreign donors an inordinate in?uence over the ?nal outcome.
  • Parliaments have been barely involved in the process undermining their role in national policy making. Some governments have been unwilling to hold meetings in opposition party areas. In other cases governments excluded critical voices from civil society.
Examples of poor quality participation processes for those who do participate:
  • Most governments equated participation with consultation.
  • Governments set consultation agendas often excluded civil society from discussions of economic policy.
  • Rushed time frames prevented adequate preparation and hindered the identi?cation of policy alternatives and the effective analysis of poverty effects of policy choices.
  • Lack of access to information hindered effective participation.
Partner experience reveals a critical need to establish a clear framework for participation that de?nes guidelines and benchmarks for determining who is involved, at what stage, with what 'level' of participation and the methodology by which the process will take place.

Governments and civil society capacity and will

The quality of participatory processes has been constrained by limited governments and civil society capacity. Governments lack of?cials to focus on the PRSP and lack skills to run processes. They also suffer from poor communication and coordination systems and from dif?culties in controlling and coordinating donors. Civil society lacks macro-eco-nomic analysis and policy making skills, personnel and ?nancial resources and in some cases connections with grassroots. Capacity is however not the chief determinant of the quality of participatory process. Governments will to engage civil society in the PRSP has a crucial bearing on both process and outcomes. Likewise civil society's perception of governments affects its commitment to the process.

Country driven or donor driven?

The PRSP is an externally imposed requirement that governments must produce to access ? nancing and which the World Bank has to approve. Partners consider it paradoxical to call this country-driven and feel that governments have chosen policies the IFIs will approve rather than making policy choices based on the views put forward by citizens and parliaments. IFIs have sometimes played extremely inappropriate roles and have relied too heavily on visiting missions. There have been improvements in donor co-ordination and donors have encouraged participation but dominant and often poorly conducted donor roles have negatively affected the process and contents.

Civil society strategies and gains

Partners have been wary of being co-opted to legitimise pre-de?ned policy choices. Many feel their views were ignored or that the of? cial participation process was deeply ?awed. Civil society groups have developed strategies to counteract this including using parallel civil society processes to ensure an independent civil society input, true to their views and covering the full agenda of their concerns. Despite the many problems experienced and the capacity constraints still existing, participation in of?cial and/or parallel civil society process has created some new political space for civil society and enabled civil society to strengthen skills and capabilities for future engagement in national policy making processes.

The above critique leads partners to make a wide variety of recommendations for governments, donors and civil society. Key recommendations include:

Recommendations for governments
  • Involve civil society in designing participatory frameworks and agendas, and in developing benchmarks by which the quality of participation can be judged.
  • Institutionalise participation through the establishment of a permanent framework for effective participation in each stage of the PRSP process.
  • Fully involve parliaments and political parties.
  • Use local languages and involve vulnerable and excluded groups such as children.
Recommendations for civil society
  • Build relevant capacities in economic literacy, advocacy, education and research.
  • Increase the connectedness of national, provincial and local level civil society and develop democratic practice within constituencies.
  • Strengthen networking for effective participation
  • Keep society well informed, build consciousness and involve the media.
Recommendations for donors
  • Encourage governments to use participatory exercises at all levels and every stage.
  • Encourage discussion of policy alternatives
  • Provide adequate funding for participatory processes in ways which ensure civil society's continued independence.
  • Reduce reliance on visiting missions and co-ordi-nate with other development partners.
PRSP Contents

Partner organisations are heavily critical of the policy contents of PRSPs for the following reasons.

World Bank/IMF infuenced contents

Partners consider that PRSP contents re?ect the dominance of IFI policy prescriptions instead of the priorities of the poor. Policies opposed by the poor (such as user fees for healthcare) are common, whilst policies the poor want are not included. The World Bank/IMF guidelines for writing the PRSP are considered to have strong neo-liberal assumptions resulting in neo-liberal policy recommendations. This, coupled with the need for IFI approval, gives the IFIs inordinate power over the contents of national PRSPs. Hence the policy matrices attached to the many national PRSPs differ little from one another.

Similarly the quality of poverty analysis in PRSPs is considered to be poor and to be heavily in? uenced by the IFIs (which established the guidelines for the poverty evaluation). This weakness leads to sectoral and geographical shortcomings in the strategies and policies to reduce poverty.

Growth, not poverty reduction is the primary PRSP goal

Economic growth is the mainstay of PRSP strategies, whilst attending to poverty problems is subsidiary. They include little to no analysis of what kind of growth will reduce poverty. Potential negative social impacts of growth strategies are often not identi?ed or addressed, redistribution strategies are absent and the trade-offs between issues are not analysed.

PRSP and PRGF: a reformulation of SAP policies

PRSP was introduced amidst growing critique of Structural Adjustment Programmes (SAPs) and the conditionalities attached to ?nancing. Despite this the macro policy contents of PRSPs and Poverty Reduction and Growth Facilities (PRGFs) are in essence these same discredited structural adjustment policies, and the poverty impact of these policy choices is not discussed in PRSP documents. IFIs continue to be unwilling to seek or consider policy alternatives and continue to assume that structural adjustment policies automatically contribute to poverty reduction without thorough analysis of the likely poverty effect at country level. The promised reduction in conditionalities has not been forthcoming.

PRSPs, privatization and trade

Privatization is being promoted by the IFIs and implemented through many PRSPs despite strong opposition from the poor. Partners' past experience of privatization involves transfers from state to private monopolies, lower quality service delivery, higher prices increasing costs for the poor, widening gaps between rich and poor and job losses. Partners want further privatizations to be placed on hold until full ?nancial and social audits of previous privatizations are carried out and made public.

Likewise trade liberalization is included in many PRSP policy matrixes. However the PRSPs often fail to underscore the two-way character of trade, to outline policies to deal with the in?ux of imports caused by liberalization or to analyse what countries would lose by liberalizing trade and how vulnerable populations would be affected.

Avoidance of equity issues, lack of special measures for vulnerable groups

Partners consider that their national PRSPs have avoided equity issues. Land reform and its potential to contribute to poverty reduction is almost completely ignored despite extreme land inequality. Instead PRSPs push for land markets and the formalization of land ownership, which has the potential to worsen access to land for the poor. Corruption is likewise ignored. Women, children, indigenous groups and those infected or affected by HIV/AIDS are often disproportionately hit by the negative social impacts of economic policies. Despite this their situations are not considered neither are special measures targeted at them.

Flowing from above critique partners make many recommendations for governments, donors and civil society including the following:

Recommendations for governments
  • Seek an alternative analytical framework to structural adjustment.
  • Examine the expected effects of a range of policy options to help identify the policies likely to have the greatest impact on poverty.
  • Ensure consistency between economic and social policies to deal with poverty.
Recommendations for civil society
  • Advocate for an alternative development framework.
  • Identify and promote good practices for poverty reduction.
Recommendations for donors
  • Rethink structural adjustment policies and consider policy alternatives.
  • Ensure the poverty effects of PRGF strategies are analysed and made consistent with the achievement of poverty objectives outlined in the PRSP.
  • Assist in resolving external problems such as market access for developing countries.
  • Specify the additional funds available so plans can be matched to resources.
PRSP Implementation and Monitoring

Many countries are now in the implementation phase of the PRSP. The implementation phase holds its own set of challenges. Some challenges have their roots in weak PRSP content, whilst others relate to the ?nancing and yet others to practical problems in implementation systems or political will. Some partners consider the PRSP to be being poorly implemented or implemented to only a limited extent.

PRSP: A weak basis for implementation

It is the view of partners that in situations of limited resources, and where there is a conflict between economic growth, environmental protection and social development, it is vital that clear prioritisation is made on the basis of which policies will contribute most to poverty reduction. Partners consider that PRSP documents fail to provide this prioritisation of policy and actions or to identify poverty effects of many policies. PRSP documents should also provide clear frameworks for implementation. PRSPs are however inadequately linked to other national planning tools such as the budget and do not identify the mechanisms for co-ordi-nation of the strategy between central and local levels of government. PRSPs also fail to identify constraints for implementation (such as the capacity of decentralized authorities to implement) and how these will be overcome. Likewise, PRSPs do not provide a clear framework for monitoring and evaluation of the implementation. These weaknesses in content of the PRSP document hamper effective implementation and risk the failure of the strategies.

The financing gap

External fnancing is critical if PRSPs are to be anything more than words on paper. The insuffciency of debt relief coupled with inadequate development assistance and the unreliability of both debt relief and aid vows renders the planning and implementation of PRSPs extremely difficult.

The debt relief currently being supplied through HIPC is insuf?cient to enable the required levels of growth and reduce poverty. After receiving debt relief most HIPC countries will continue to have unsustainable external debt whilst increasing their internal debt. Yet donors continue to use the debt sustainability approach rather than working for debt cancellation.

Unpredictable aid transfers also lead to programmes not being implemented or damaging domestic borrowing. Uncertainty over and ?uctuations in donor ful?llment of pledges renders planning extremely dif?cult, yet there are no sanctions on donors who default or delay payment.

Implementation in practice

There are many obstacles to effective implementation in practice. In the absence of clearly pre-de? ned priorities, the effective priority for implementation seem to be the macro reforms demanded by conditionalities, whilst pro-poor social and structural reforms are left behind. This is an effective de-prioritisation of pro-poor policy. Implementation levels of poverty-oriented aspects of the PRSP are considered by partners to be low, as a consequence of this deprioritisation and of government capacity constraints in service delivery and a lack of ?nancing. Implementation is also hampered by poor information ?ows between levels of government, whilst monitoring is hampered by the poor availability of information on implementation. Methodological problems, a lack of follow up and political will provide further constraints.

Given the weaknesses in prioritization and implementation frameworks, public sector constraints, the lack of a clear monitoring system or appropriate indicicators, and the ?nancing gap, the successful implementation of PRSP strategies is in grave doubt.

Despite these many dif?culties, partners ?nd that engagement in the implementation/monitoring phase of the PRSP opens up new space to work together in new ways, an experience that will strengthen future contributions to policy formation processes.

Stemming from the above critique partners make a wide variety of recommendations for governments, civil society and donors. Key recommendations include the following:

Recommendations for governments
  • Enable improved implementation by including clear prioritisation, time-frames and divisions of responsibility and an analysis of public sector constraints and how these will be overcome in the PRSP.
  • Relate effective prioritisation to budgetary constraints and scenarios.
  • Involve civil society in the prioritisation of actions
  • Work more closely with municipalities in developing and implementing strategies.
Recommendations for civil society
  • Promote adequate and better organised local planning.
  • Monitor implementation using methodologies such as expenditure tracking.
  • Design rapid assessment tools to enable local organisations to conduct local poverty monitoring.
Recommendations for donors
  • De-link PRSPs from the HIPC initiative and promote and provide debt cancellation.
  • Move forward in building an integrated donor approach with budget support.
  • Put pressure on governments to prioritise actions to be taken to avoid poorly prioritised resource dispersion.

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