Selected Issues in PRSP Implementation

1. Selected Issues in PRSP Implementation The World Bank and The IMF Thessaloniki May 28, 2005

2. Context • PRS approach now in place five years • Country-owned; designed in participatory fashion • Comprehensive in approach • Based on medium- to long-term perspective • Results oriented (indicators and monitoring) • Framework to define policies, programs and resources needed to achieve the MDGs at the country level • Several progress reports and independent evaluations

3. PRS Initiative has begun to orient stakeholders toward: - Focus on poverty reduction - Attention to results - Overarching framework for aid management But, weaknesses remain in: - Foster better customization - Assist in exploring wider range of policy options - Pay more attention to growth - Define clearer partnership frameworks with accountabilities Independent Evaluations of PRS Initiative

4. Significant potential: strategic road map for policy To realize this potential: Encourage greater flexibility in implementation Enhance results orientation to allow countries to define—in a manner open to public scrutiny—their own benchmarks and objectives Provide clear, candid assessment of progress Clarify framework to elaborate macro frameworks and catalyze donor support Independent Evaluations of PRS Initiative

5. Key Issues for 2005 Review Five themes central to effectiveness of PRS approach • Strengthening the medium-term orientation of PRS • Using the PRS as mutual accountability framework • Sustaining meaningful participation • Enhancing links between PRS and Plans/MTEFs/Budgets • Adapting PRS approach to conflict-affected and fragile states

6. Strengthening medium-term orientation • Customizing MDGs/[EU accession requirements] • Setting stage for increased aid • Balancing realism and aspiration • Implications of more aid • Encouraging evidence-based policy decisions • Relevant PRS targets and indicators • Monitoring and evaluation systems • Underlying analysis (PSIA, pro-poor growth)

7. Using the PRS as a mutual accountability framework • Using the PRS approach to prioritize and sequence: • capacity building • analytic input • Improving aid alignment and harmonization, types of aid, conditionality, volume • Using the PRS as framework for donor coordination

8. Sustaining meaningfulparticipation • Involving key stakeholders • local governments, line ministries, parliaments • Sustaining participation • formulation, implementation and monitoring • Opening up space for policy dialogue • Considering influence on PRS content and implementation

9. Linking the PRS with plans, MTEFs,and budgets • Integrating PRS with existing strategies and plans and with medium-term expenditure framework and budget • Using PRS to define, cost and prioritize public actions for poverty reduction • Defining financing plans, including contingency planning • Building capacity for fiscal management

10. Tailoring approach to conflict-affected and fragile states • How to apply PRS principles in fragile states? • Are there ways for donor assistance to be provided in ways that reinforce underlying principles of PRS approach?

11. Expected Findings from 2005 Review • What are the key lessons and good practices for enhancing effectiveness of the approach? • What needs to happen to strengthen specific aspects of the country-driven development model? • Are specific changes to the approach needed? • How should results from the PRS approach be measured?

12. Outputs • Paper for consideration at the World Bank and IMF fall annual meeting • Going forward • Intensive follow-up on key recommendations • Dissemination of good practices and lessons

13. Some EarlyFeedback From some PRS countries: • Pay more attention to growth and productive sectors • Political economy key; still often treated as technocratic • Need to better treat capacity issues and institutional reforms • Too many different strategies/initiatives • Value of countries sharing experiences with each other From others: • Don’t forget the “middle-group” of countries • Better to have a few key recommendations that are actively pursued • Need to focus on results

14. Return to original intent Reduce “paper” culture Focus on underlying process in the country Embed in domestic processes/prevent parallel processes Encourage country specificity Reduce perception: Washington “signs-off” Annual Progress Reports Joint Staff Advisory Note Changes to PRS“Architecture”

15. PRS documents and WB/IMF-operations • The Executive Boards of the World Bank and the IMF no longer formally endorse the PRS documents as a satisfactory basis for Fund and Bank concessional financial assistance. • JSANs for APRs will be normally be issued to the Boards for information rather than for discussion by the Boards. • For PRGF and HIPC Initiative operations, PRS documents must have been issued to the Board of the IMF within 18 months.

16. APR #1 Process and Procedures Prepared by member countries in years between full PRSPs; updates the PRSP and discusses its implementation; is distributed to the Boards of the Bank and the Fund for information There is room to improve... • integration of APRs with existing processes (annual budget, poverty and/or development reports) • synchronization of APR-process with national reporting and decision making processes • discussion of progress in PRS implementation in member countries

17. APR #2 Content and Focus • Nature and focus of APR can vary from year to year • New analysis on growth, poverty, PSIA? • Institutional developments (improved PEM, TA needs) • Key features should be: • Performance against targets, budget implementation • Highlight PRSP measures implemented/not-implemented • Reasons for successes and failures and measures to improve effectiveness • Priorities for coming year • Status of monitoring and evaluation systems

18. APR #3Changes to the PRS In case of important changes to PRS, APR should explain changes based on: • Implementation experience to date • Weaknesses and gaps in original strategy • Changes in exogenous factors (e.g. oil prices) • New data and analysis on determinants of growth and poverty

19. APR #4A communication device APRs can be used to inform and/or involve domestic stakeholders and donors regarding implementation and to build support for the PRS: • Parliament and civil society can be engaged in monitoring and reporting • APR can be disseminated to the public and to donor fora • Underlying data can be made publicly available • APR as a vehicle to harmonize donor assistance

20. Content of a JSAN for an APR • Fund and Bank staff assess, based on APR and other sources: • Performance relative to benchmarks (for monitoring and evaluation) • Priorities for the next year as reflected, for example, in the budget • Progress made in addressing short-comings identified in past JSANs • Extent to which progress reporting is being used to provide transparent information on implementation progress to key domestic and external stakeholders

21. Content of a JSAN for a PRSP • Advice rather than overall assessment • Priorities for strengthening over coming year • Process and content • Consistent with starting point, capacity and support • Serious weaknesses • Inconsistencies between PRS and its policy framework and existing analytic work • Analytic work insufficient to support policy framework • Attention to links to domestic processes

22. Thank You dwww.worldbank.org/prspreview Concept note for 2005 PRS review References Country documents Bibliography of evaluations, progress reports, case studies Links to other events