Is there evidence that the Poverty Reduction Strategy (PRS) of the World Bank and International Monetary Fund (IMF) is working? Can the PRS lead the least developed countries out of poverty? Are the Poverty Reduction Strategy Papers (PRSPs) nationally owned and participatory – or are they becoming just another hoop through which poor countries must jump to access funds?

A booklet from the Panos Institute analyses the changes, challenges and dilemmas highlighted by the PRS process and its underlying philosophy. Drawing on evidence from many of the 60 countries which now have PRSPs, it concludes that while it may be too early – only three years after their launch – to say whether PRSPs will reduce poverty, much can be done now to enhance local participation and ownership.

The study explains stages in the PRSP process and linkages to the enhanced HIPC (heavily-indebted poor countries) initiative. Producing a PRSP is a condition for getting debt relief, receiving concessional loans and accessing certain aid budgets. PRSPs have been heralded as the first serious attempt by the international community to put poverty reduction at the centre of development planning and to encourage poor countries to own their own development strategies.

There is good news to report. Panos notes that PRSPs have generated a new focus on poverty by governments and a greater understanding of its causes. In many countries, relations between governments and civil society have improved as both sides respond to the challenge of participation. Some governments are opening up their budgeting processes to civil and parliamentary scrutiny. The media is beginning to help the public understand, and get involved in, the development and monitoring of PRSPs and the setting of priorities for government spending – but in most countries there is scope for much more effort by governments, civil society organisations (CSOs) and the media themselves to develop the potentially important role of the media.

Looking for evidence in three case study countries that PRSPs have boosted progress towards accountable and democratic governance and sharpened the focus on poverty-reducing initiatives in education, health and rural infrastructure, the report notes:

• In Uganda, civil society consultation has been restricted: some local NGOs feel they have been used to give their blessing to policies they do not believe in.
• In Lesotho, state engagement is limited to one ministry: the overuse of external consultants and a high turnover of civil servants involved has reduced a local sense of ownership.
• In Ethiopia, there is a suspicion that the Government started a PRSP to get debt relief rather than out of genuine anti-poverty commitment: the interim PRSP had no gender analysis and overlooked urban poverty and conflict-prone pastoral areas.

The report contains many suggestions of ways that international financial institutions, governments and civil society could improve the PRSP process by:

• ensuring all donors are involved
• developing greater space for debate and participation which allows for the presentation of alternative views on macroeconomic policy
• working with the media to encourage a stronger sense of commitment and popular ownership of PRSPs: long-term awareness creation may depend on the ability of community radio to reach people unable to access visual or print media
• agreeing indicators of success
• developing clearer policies to allow NGOs to organise and pursue advocacy without government restrictions
• boosting the capacity of local stakeholders to engage in policy discussions.

Source(s):
‘Reducing poverty: is the World Bank’s strategy working?’ Panos Institute, by Kitty Warnock and edited by Nikki van der Gaag, August 2002 Full document.

Funded by: DFID Civil Society Challenge Fund, Ireland Aid and World Vision

id21 Research Highlight: 24 January 2003

Further Information:
Kitty Warnock
Environment & Globalisation Programme
The Panos Institute
9 White Lion Street
London N1 9PD
UK

Tel: +44 (0)20 7239 7603
Fax: +44 (0)20 7278 0345
Contact the contributor: kittyw@panoslondon.org.uk

or Mark Covey
The Panos Institute

Contact the contributor: markc@panoslondon.org.uk

The Panos Institute, UK

Other related links:
'The IMF and World Bank: undermining democracy and rolling back the state?'

'PRSPs investigated: structural adjustment in another guise?'

'Structural adjustment - pro or anti-poor?'

'Conditionality-driven privatisation of utilities: in the interests of the poor?'

See the World Bank site on poverty reduction strategies and PRSPs

More from the PRSP Document Library

The Bretton Woods Project acts as the critical voice on the World Bank and IMF