Poverty Reduction Strategy Papers (PRSPs) are instruments used by the World Bank and the International Monetary Fund (IMF) to enable developing countries to qualify for debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. First introduced in 1999, there are over 30 approved PRSPs in operation and many more being planned. The international financial institutions (IFIs) claim that developing countries and their national governments are primarily responsible for the design and implementation of the PRSPs, but evidence suggests this is largely superficial.

Research from the University of Oxford’s Queen Elizabeth House finds that local people, communities or organisations (i.e. civil society) often have only minimal input into PRSP design and that governments continue to face similar external constraints on their economic independence as experienced under previous structural adjustment packages. The PRSP process has not reduced the powerful position of donors significantly. On the contrary their position may have been strengthened by the image they portray now. Notions of participation (i.e. including all parties in the process), legitimacy (i.e. giving real authority to national governments) or ownership (i.e. emphasis on locals having complete responsibility) that are used in the PRSP process, project the donors in a positive light.

The civil society participants that are involved in the consultative process mostly consist of a mix of NGOs (including foreign ones), which are not necessarily representative either of society as a whole or of the poor in particular. In a few instances broad sections of civil society have been represented, but this has not made much difference to decisions or to genuine empowerment as participation has been limited to consultation rather than joint decision-making.

While the IFIs argue that PRSPs can contribute to democratisation in countries emerging from dictatorship, there is a risk that existing institutions are excluded from the process, thus weakening elected governments and principles of democratic accountability. The authors note that:

• Participation has been limited by rushed timeframes, lack of information, poor dissemination in appropriate languages and failure to consult rural communities.
• The final acceptance of PRSPs still lies with the non-representative boards of the World Bank and IMF, which effects the dynamics of the process from the outset.
• Many multilateral programmes that continue to be implemented outside the PRSP process unaffected by it.
• The poverty analysis and the macroeconomic sections of PRSPs are often inconsistent – some acknowledge the failure of previous adjustment programmes but then go on to advocate the very same policies.

Changes in the process to help PRSPs improve genuine ‘ownership’ of programmes include the following:

• The operations of the Poverty Reduction Strategy Credits that take place without the knowledge of local people, allow the World Bank to modify components of countries’ PRSPs: this needs to end as it undermines the principle of ownership that PRSPs are meant to help put into practice.
• The IMF-administered Poverty Reduction Growth Facility (PRGF) is currently negotiated by a small number of policy makers and is often linked with harsh conditionalities: this has to be linked to the PRSP process and everyone should be made aware of it.

Several groups and individuals such as women, religious organisations, trade unions, rural groups, line ministries and national parliaments, are insufficiently represented in PRSP formulation: they need to be included more effectively in the process

Important World Bank and IMF documents and draft PRSPs need to be made available more widely and earlier in the process.

PRSPs may have helped to empower the World Bank by increasing the effectiveness of programmes through raising national enthusiasm for them and increasing the perception that they are locally designed. However, this effect is likely to be short-lived unless there is genuine change in control over such programmes.

Source(s):
‘Do PRSPs empower poor countries and disempower the World Bank, or is it the other way round?’ Queen Elizabeth House Working Paper, no 108 by Frances Stewart and Michael Wang, October 2003 Full document.

id21 Research Highlight: 5 November 2004

Further Information:
Frances Stewart
Centre for Research on Inequality, Human Security and Ethnicity (CRISE)
Queen Elizabeth House
University of Oxford
21 St Giles
Oxford OX1 3LA

Tel: +44 (0) 1865 283075
Fax: +44 (0) 1865 273607
Contact the contributor: frances.stewart@qeh.ox.ac.uk

Centre for Research on Inequality, Human Security and Ethnicity (CRISE), Queen Elizabeth House, University of Oxford

Other related links:
'The Malawi Poverty Reduction Strategy Paper: the right approach?'

'IMF/World Bank Poverty Reduction Strategy: effective, participatory and locally owned?'

'PRSPs investigated: structural adjustment in another guise?'

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

'Annual review of country experiences with PRSPs' from ELDIS

See the World Bank site on PSRPs

See also the PRSP Documentary Library