Poverty Reduction Strategy Papers (PRSPs) Overview and Next Steps

1. Poverty Reduction Strategy Papers (PRSPs) Overview and Next Steps Expert Group Meeting on MDGs and PRSPs Egypt, December 2004

2. Presentation outline • PRSP Fundamentals • Evaluating and Assessing the PRSP Process • The Way Ahead

3. 1. PRSP Fundamentals Some milestones… OECD/DAC Shaping the 21st Century IDGs May 1996 The WB and the IMF launch the HIPC Initiative Sept. 1996 The WB introduces the CDF, piloted in 13 countries Jan. 1999 The WB and the IMF enhance the HIPC initiative to strengthen focus on poverty reduction Sept. 1999 The WB and the IMF introduce the PRSP Sept. 1999 UN Millennium Summit adopts MDGs Sept. 2000

4. The principles underpinning the PRSP-The Comprehensive Development Framework • Long-term Vision -short-term and medium-term policies integrated into a national development strategy linked to a long-term vision • Country Ownership -national institutions and stakeholders identify priorities and objectives of the strategy with technical support of development assistance agencies • Country-led Partnership -coordination, alignment and harmonization of development assistance under government leadership • Focus on Results -continuous evaluation of performance to review and update policies and programs

5. WB and IMF Joint Staff Assessments The mechanics of the PRSP Review Formulation Implementation Annual Progress Reports Full PRSP I-PRSP 1 year 3 years

6. As of December 2004 56 countries are participating in the PRSP process • 13 countries with an I-PRSP only • 43 countries with a full PRSP - 3 countries (Burkina Faso, Uganda, Tanzania) have completed three progress reports - 4 countries (Mauritania, Mozambique, Nicaragua, Albania) have completed two progress reports - 14 countries (Azerbaijan, Ghana, Honduras, Ethiopia, Guyana, Malawi, Rwanda, Vietnam, Zambia, Kyrgyz Republic, Mali, Tajikistan, Guinea, Niger) have completed a progress report …beyond the 42 HIPC eligible countries!

7. The World Bank supports the PRSP through Poverty Reduction Support Credits (PRSCs) in 22 countries • First PRSC launched in 2001 (Uganda) and replacing Structural Adjustment Operations • Addressing not only macroeconomic framework but also social agenda • PRSC supporting a comprehensive reform program linked to the PRSP • Multi-partner budget initiatives encourage external partners to coalesce around a common policy matrix, including the World Bank, other MDBs and multilaterals, and bilaterals (e.g. Uganda, Tanzania, Mozambique)

8. 2. Evaluating and Assessing the PRSP Process • 2004 OED independent evaluation of the World Bank’s support to the PRSP process - 10 country case studies – 4 jointly with IMF IEO - (Albania, Cambodia, Ethiopia, Guinea, Mauritania, Mozambique, Nicaragua, Tajikistan, Tanzania, Vietnam) with stakeholder surveys • 2004 World Bank and IMF Staffs assessment of progress in implementation of PRSPs - building on 2000, 2001, 2002 and 2003 reviews and assessments • 2003 World Bank CDF Progress Report - building on 2001 assessment of CDF principles’ implementation - 48 countries with I-PRSP and PRSP …and many others undertaken outside the World Bank and IMF (e.g. SPA/ODI, UNDP Evaluation Office, Oxfam)

9. OED WB/IMF WB/CDF Main Findings Long-term vision • Integration of sector programs in an overall strategy helped policymakers to link sector strategies with poverty reduction • Progress in setting policy priorities for reducing poverty • PRSP helping countries to focus on a medium-term prospective • Insufficient links between long-term and medium-term

10. OED WB/IMF WB-CDF Main Findings (cont.) Country ownership • WB/IMF conditionality • Limited stakeholders involvement in implementation • No mechanism to adapt PRSPs to differing country conditions • Deeper involvement of central and local governments • PRSP not yet aligned with country processes • Mechanisms for sustained dialogue between government and country stakeholders rarely in place • Political cycles often affecting PRSPs

11. Main Findings (cont.) OED WB/IMF WB-CDF Country-led partnership • External partners have not yet defined how program content will change (but new instruments* in place) • Limited prioritization of PRSPs makes alignment difficult to monitor • PRSP not yet become a common framework for aligning development assistance • New instruments* better supporting country structures • Alignment made difficult by limited prioritization • Capacity building not yet fully coherent *SWAps, multi-partner budget support, joint analytical work

12. Main Findings (cont.) OED WB/IMF WB-CDF Focus on results • M&E systems at an early stage • Information not generally linked to decision-making • M&E systems relying on poor data and indicators • Limited institutional arrangements for monitoring • Insufficient alignment of external and internal M&E • External partners often supporting disparate initiatives for M&E • Excessive number of indicators • Limited role of Parliaments in monitoring and reviewing progress

13. 3. The Way Ahead • Aligning the PRSP with country decision-making processes -PRSP strengthening rather than replacing existing national planning instruments (e.g. Uganda, Vietnam, Mozambique, Yemen) -Putting the PRSP more on the agenda of established or emerging mechanisms for sustainable dialogue -Annual Progress Report to be aligned with country processes (e.g. Mozambique) -JSA becoming an advisory tool

14. The Way Ahead (cont.) • Enhancing the role of the PRSP as a partnership framework guiding alignment and harmonization of external assistance -National authorities use the PRSP as the instrument to lead development assistance coordination (budget support, investment projects through SWAps) -External partners support capacity building in line with the PRSP

15. The Way Ahead (cont.) • M&E systems respond to country needs -Internal and external M&E systems are streamlined and inform the country’s decision-making process -External partners align support around one country system