New report queries World Bank influence over PRSP analysis

A new report examines the powerful roles of the World Bank in determining the policies chosen by PRSP countries. It extends the arguments about what is going wrong with PRSPs, arguing that the Bank most of the time no longer has to rely on its financial clout alone, as it is winning arguments upstream through its global and national-level studies.

The report, Blinding with Science or Encouraging Debate? How World Bank analysis determines PRSP policies was written by the Bretton Woods Project and published in association with World Vision. It sets out how the Bank is analysing client country policies in an ever-expanding range of areas: from overall economic performance and public expenditure management, to trade integration, good governance and gender. The Bank’s data and recommendations are a key building block of its country strategies and those of other donors.

The Poverty Reduction Strategy process, introduced by the World Bank and IMF in 1999, is supposed to ensure that governments and civil society groups take the lead in defining policies that the Bank and Fund should support. But many commentators have complained that macroeconomic policy choices have not been adequately debated and that few countries have deviated from standard approaches.

The Bank constantly talks about capacity-building and listening, but seems reluctant to cede control of policy formulation processes or to recognise perspectives that diverge markedly from orthodox Washington thinking. Quoting from many leading academics who are critical of World Bank analytical approaches, the briefing aims to be a resource for organisations considering whether and how to engage with the PRSP process.

It also provides a critical assessment of the current moves to introduce “Poverty and Social Impact Analysis (PSIA)”. PSIA is supposed to involve the use of more diverse analytical approaches in considering possible policies, as well as greater transparency and accountability in the process of decision-making. But it is not yet clear whether this will change Washington policy processes or merely lead to another confusing set of papers and acronyms. The briefing cites finance ministers from Heavily Indebted Poor Countries who recently wrote to the heads of the World Bank and IMF saying that “to avoid conflict of interest [by donors] it is essential to equip countries with the tools to conduct their own PSIAs rather than depending on outside assistance”.

The briefing recommends taking further action to break the Bank’s near monopoly on development analysis. This can only be achieved by diversifying the agencies which commission and produce research and by making the World Bank more receptive to diverse perspectives.

Blinding with Science or Encouraging Debate? How World Bank analysis determines PRSP policies, Bretton Woods Project, World Vision, September 2002