Commonwealth Secretariat

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Commonwealth Secretariat

• PRSP Learning Event
• 9 July 2003

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Impetus behind the PRSP initiative

• Mixed record on poverty reduction in 1990s
• International Development Targets/MDGs
• Multilateral funding for debt relief (HIPC II)
• Findings on aid effectiveness
• Pro-poor policy reforms have been failing for
  lack of real country commitment (ownership)
• When country authorities really dont want to do
  something, conditionality does not make them do
  it (properly)
• Projects get around the immediate problem but
  further weaken commitment and capacity
  (disincentives transaction costs)

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What are PRSPs?

• They replace the old Policy Framework Papers as a
  basic condition for IMF and World Bank (IDA)
  concessional lending
• They play a similar role in Enhanced HIPC debt
  relief, for eligible countries
• They are increasingly the focus for bilateral
  donors (DAC, SPA, etc.) for improving the quality
  of aid

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Core PRSP Principles

• Country-led/owned, based on broad-based
  participation
• Comprehensive macro, structural, social,
  environmental
• Long term perspective
• Results-oriented
• Costed prioritised
• Partnership-oriented

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Whats new?

• Costed poverty reduction strategy linked to
  macro budget framework (encouraging the tough
  choices!)
• Outcome/monitoring focused making the links
  between policy results
• Opening-up the policy process to participation
• New incentives, new partnership possibilities
  new forms of aid delivery

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PRSPs are

• NOT a sophisticated new technical device - a
  magic bullet that will solve fundamental
  problems of development and cooperation
• offering important opportunities
• for poverty to be mainstreamed in national
  systems, providing priorities for both aid and
  the national budget
• for poverty reduction efforts to be more country
  owned and thus more successful
• But these are not certainties - the success of
  the PRS initiative depends on three gambles ...

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Gamble 1

• If governments are obliged to discuss poverty,
  and what they are doing about it, with citizens,
  then they are likely to take it more seriously
  and be held to account more effectively

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Gamble 2

• If partners have a national PRSP to coordinate
  around, then donor behaviour and aid management
  will improve - leading to lower transaction
  costs, and less damage to national institutions

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Gamble 3

• If the PRS is taken seriously by all parties,
  then relations between partners and governments
  will change more fundamentally - with increased
  domestic accountability, more effective aid and
  better poverty outcomes

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PRS Schedule
Preparation Status Report
1st Annual Progress Report
2nd APR
IMPLEMENTATION MONITORING
PREPARATION
I-PRSP
PRSP (I)
PRSP (II)
9-24 months
2-5 years
HIPC(II) Completion Point
HIPC(II) Decision Point
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How many PRSPs?

• The PRSP initiative is now 3.5 years old
• 65 countries are engaged in the PRSP process in
  some way
• Currently 28 countries have full PRSPs 9 of
  these are Commonwealth countries
• 37 more are in the process of producing a PRSP
  (or I-PRSP) 8 of these are Commonwealth
  countries
• 17 (of 54) Commonwealth countries involved in the
  PRSP process

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Examples from the Cwealth

• Tanzania completed its full PRSP October 2000
  and it went to the Boards in November 2000. Has
  completed two Annual Progress Reports since then
  most recently April 2003
• Mozambique completed its full PRSP in April
  2001 and it went to the Boards in September 2001
• Sri Lanka Full PRSP went to the Boards in April
  2003
• Guyana completed its full PRSP Feb 2002 (macro
  addition April 2002) - went to the Boards in
  September 2002

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PRS Process
Policy formulation
Financing
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Shared analytical work TA defined by govt
support civil society inputs
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
TA on policy (govt led) engaging civil society
country strategies linked to goals, targets and
macro framework in PRSP
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Financing on-budget in line with budget/MTEF
cycle conditions benchmarks streamlined with
PRSP matrix
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Consultative and transparent process supporting
others communication efforts
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Projects/programmes support PRS implementation
managed by govt agencies
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Engaging with the PRS process
Policy formulation
Financing
Monitoring, review audit drawing on govt.
systems annual PRSP review support creation of
ME strategy support involvement of CS
Communication
Like projects, PRSs are supposed to involve a
series of steps, so that design is based on
evidence and is then improved by learning (ME)
Poverty analysis
Policy implementation
Monitoring and evaluation
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Reminder Gamble 1

• If governments are obliged to discuss poverty,
  and what they are doing about it, with citizens,
  then they are likely to take it more seriously
  and be held to account more effectively

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Progress on Gamble 1

• PRSs are beginning to provide focus for
  allocation and use of domestic and external
  resources they are being taken seriously
• They show improved analysis of poverty, and this
  is used to justify PRS priorities
• But policy detail often has limited poverty
  focus, and lacks a critical review of past
  failures
• Implementation is seriously limited by enduring
  weaknesses in budget and public-sector management

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More on Gamble 1

• Some opening of policy debate to broader
  participation by domestic constituencies
• consultations, PPAs, civil society involvement in
  policy working groups, and monitoring (tho
  involvement of formal political institutions weak
  so far)
• But domestic accountability structures remain
  (very) weak, so not clear how much increase in
  real commitment
• Difficulties sustaining gains from participatory
  processes - disappointment following
  (unreasonably) high initial expectations

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Reminder Gamble 2

• If partners have a national PRSP to coordinate
  around, then donor behaviour and aid management
  will improve - leading to lower transaction
  costs, and less damage to national institutions

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Progress on Gamble 2

• A wide range of experience in respect of partner
  behaviour with some significant changes by some
  agencies
• In general, partners are coordinating their PRSP
  work but this is not the same as realigning
  agency programmes to PRSP priorities
• Realigning priorities requires strong national
  strategy with clear priorities (and good
  sector/local policies) many PRSPs fall short of
  this

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Reminder Gamble 3

• If the PRS is taken seriously by all parties,
  then relations between donors and governments
  will change more fundamentally - with increased
  domestic accountability, more effective aid and
  better poverty outcomes

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Progress on Gamble 3

• Not clear that domestic accountability
  institutions will soon be able to take over
  from donor accountability
• There is little evidence of streamlined
  conditionality - possibly an increase
• Some tentative moves towards mutual
  accountability - e.g. the Independent Monitoring
  Group in Tanzania, and SPA
• Partners supporting PRSs will continue to face a
  dilemma on strengthening the poverty impact of
  policy versus encouraging a good country-specific
  process