Ownership and Policy Space in Poverty reduction strategy papers (PRSP)

1. Ownership and Policy Space in Poverty reduction strategy papers (PRSP) Meg Elkins Simon Feeny, RMIT University DSA/EADI Conference 2011, York Rethinking Development in an Age of Scarcity and Uncertainty

2. Outline of the presentation • Background • Purpose and scope • Previous literature and contribution • Methodology • Results • Conclusion • Limitations and further research

3. Background PRSPs • PRSPs Guiding principles • Country-driven and owned; results orientated; comprehensive in scope; partnership orientated; medium and long-term in focus. Ownership • Ownership and partnership are co-dependent principles • An evolving discourse should have a degree of policy diversity with a country-specific focus. Policy Space • Contentious in PRSP literature • Claims of limited policy space in the macroeconomic policies

4. Purpose and Scope • This study represents a systematic and comprehensive evaluation of 81 PRSPs 2000-2008 in terms of macroeconomic content. • This research develops three development paradigm indices : Washington Consensus(WC); Post-Washington Consensus (PWC) and New York Consensus (NYC). Indices capture the degree of alignment of PRSPs to these paradigms • Contribution: • Systematic and comprehensive review of PRSP content 81 PRSPs 58 countries 2000-2008 • Greater number of PRSPs and countries than previously undertaken • Scorecard analysis: alignment indices created for three development paradigms

5. Literature Review • Previous studies find that the Washington Consensus is the dominant paradigm in PRSPs • FDIderegulation, trade and capital account liberalisation represent missing content in PRSPs. Strict monetary and fiscal policy and privatisation are ‘rarely absent (Sumner 2006) • Few mechanisms to counteract macroeconomic volatility (Gottschalk, 2005) • The similarity of the programmes to those that form part of the normal international agenda suggests PRSPs are just window dressing (Stewart & Wang, 2003) • PRSPs demonstrate commitment MDGS via social investment in health, education and water. Empowerment, vulnerability and gender issues are given lower levels of attention (Fukuda-Parr, 2010)

6. Methodology • Collated data from 81 PRSP documents • 72 policy options examined across three contemporary paradigms • Created a scorecard system demonstrating a degree of PRSP alignment of each policy. • Policies given a score of 0,1,2,3 • Scorecard systems created the index • The normalised index measures the degree that a PRSP is aligned to the three different paradigm • Cross-tabulation analysis to determine characteristics with higher degree of alignment

7. Washington Consensus – Williamson (1990) • Fiscal discipline • Re-orientation of fiscal expenditures • Tax reform • Financial liberalisation/interest rate liberalisation • Unified and competitive exchange rate • Trade liberalisation • Openness to foreign direct investment • Privatisation • Deregulation • Secure property rights

8. Post-Washington Consensus – Rodrik (2006) • Corporate governance • Anti-corruption measures • Flexible labour markets • WTO agreements • Financial codes and standards • Prudent capital account opening • Non-intermediate exchange rate • Independent central banks • Social safety nets • Targeted poverty reduction

9. New York Consensus: UNDPs Millennium Development Project and Fukuda-Parr (2010) • Infrastructure capacity – capital expenditure • Rural development- agricultural productivity and management • Education – provisions • Health – child and maternal mortality, control for diseases • Governance – rule of law and anti-corruption measures • Employment – public works, decent work programmes • Water and sanitation – infrastructure and management • Gender equality and empowerment – representation and land entitlement • Environment – biodiversity, urban dwellings, resource protection • Science and Technology – research and development, higher education

10. Paradigm Index Averages WC: 0.638 NYC: 0.644 PWC: 0. 510

11. WC policy Adoption scores

12. PWC Policy Adoption Scores

13. NYC Policy Adoption Scores

14. Cross-Tabulations for WC Index Scores and Region Pearson chi2(5) = 14.2211 Pr = 0.014

15. Cross-Tabulations for WC Index Scores and Income Pearson chi2(1) = 13.3519 Pr = 0.000 *GDP per capita, with purchasing power parity in constant international dollars in 2005

16. Cross-Tabulations for PWC Index Scores and Region Pearson chi2(5) = 19.1814 Pr = 0.002

17. Cross-Tabulations for PWC Index Scores and Income Pearson chi (2) = 5.5315 Pr = 0.019 *GDP per capita, with purchasing power parity in constant international dollars in 2005

18. Cross-Tabulations for NYC Index Score and Timing Pearson chi2(1) = 14.3690 Pr = 0.000

19. Conclusion • Dominance of WC content is not consistent with the findings of this study • There is a rise of NYC as a more influential paradigm • Regional and income levels influence WC and PWC alignment • Timing is an influence in NYC alignment • Scope for policy space in PRSPs

20. Limitations and Future Research • Current investigation is only into content analysis. • Future investigations would need to: • 1) Indicate whether a strong index ranking translates into tangible impact on poverty and human development. • 2)Undertake regression analysis to explains policy adoption in PRSP across countries and identify common patterns.

21. PRSP Investigated: Regions, Countries and Years