Poverty Reduction Strategy Papers Origins, experience and challenges ahead

1. Poverty Reduction Strategy PapersOrigins, experience and challenges ahead Jeni KlugmanWorld Bank February 10, 2003

2. Outline 1. Origins and the PRSP concept 2. The Joint Reviews: experience and good practice to date 3. Future challenges

3. PRSPs: Origins • Little progress in reducing poverty and inequality in the 1980s and 1990s, especially in Africa • Criticism that development decisions are made by a few, with little consultation • Pressure to heighten poverty impact of development resources and to show results • Intellectual underpinnings: WDR 2000/1 on empowerment, vulnerability, security

4. What is the PRSP concept? 1. Core elements of PRSps: • A participatory process: openness and transparency (of all actors) key • Poverty diagnostics: monetary and non-monetary • Indicators and targets, monitoring & evaluation systems • Priority public actions, including public expenditures and policy reforms to tackle poverty 2. There is no blueprint for a PRSP • Country ownership is the guiding principle • National design of the process and content 3. Alignment & harmonization of external assistance to support PRS implementation

5. Countries Engaged in the PRSP Approach

6. PRSP Reviews: Main messages • Country ownership valued as the guiding principle – growing but still fragile • Openness and transparency of the PRSP process is important – improvements relative to baseline • Poverty reduction has gained a more prominent place in policy discussions – engagement of MoFs • Need for realism- in goals and targets, and in expectations and for better prioritization within strategies • Donor community has come to strongly embrace PRSP principles and approach

7. The participatory process Government Parliament Consultation groups Intermediary organizations Citizens

8. Key good practice: participation • “Institutionalisation” of participatory processes – linked to regular government decision making • However, what is manageable and realistic varies substantially across countries depending on: • Nature of existing development dialogue • Nature and capacity of parliament, civil society and local governments • Is there systematic exclusion of certain groups? • Capacity to expand these processes in the short term

9. Key good practice: poverty diagnostics and policy actions • Poverty diagnostics and past performance linked to public actions • Policies and programs costed and prioritised, & implementation linked to the budget • Malawi • Clear articulation of proposed policies and expected timing • Education in Cambodia • Full investigation of projected sources of growth and distribution

10. Key good practice: targets and indicators Setting realistic targets and indicators – realistic in terms of expected rate of change, and institutional capacity to monitor • Subject to debate and discourse, informed by realistic projections of economic growth and likely financing • Grounded in country reality and priorities -- include the MDGs when relevant -- customizing targets to country circumstances : e.g. Viet Nam • Selectivity of targets and indicators – multi-dimensional, but limited in number • Appropriate annual indicators of performance in order to monitor implementation: • intermediate indicators which focus on inputs and outputs, that are likely linked to long-term outcome targets

11. PRSP Reviews: Key challenges • For PRSP countries • Improve public expenditure management systems • Greater emphasis on monitoring and evaluation • Strengthen & institutionalize the participatory process • For development partners – including the Bank & Fund • Make alignment real: align assistance programs with country priorities, reduce transaction costs etc • Support utilization and development of national capacities, including for poverty and social impact analysis

12. Concluding Notes • Patience and Perseverance are key to success • Preparing and implementing PRSPs is a very challenging task for every government • The first PRSP cannot achieve good practice in every dimension: each country should focus on improving relative to its starting point • Significant implications for the process and content of Bank operations – beginning with the Country Assistance Strategy, and extending to policy conditionalities, selecting areas for support, etc