Conditionality

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Bank and Fund evaluation vindicates PRSP critics

26 July 2004


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The World Bank’s Operations Evaluation Department (OED) released end July an evaluation of the Poverty Reduction Strategy Paper (PRSP) process.

While the PRSP initiative is an “improvement” from the policy framework papers of the 90’s, the review notes it has “yet to fulfil its full potential”. Changes are suggested “to reduce or eliminate uniform requirements, encourage PRSPs to explore wider range of policy options and define clearer partnership frameworks for better accountability”.

The review acknowledges the tension between conditionality in Bank programs and the principle of country ownership. Self-censorship means PRSP documents contain standardised strategies. Rushed preparation of documents “to meet BWI deadlines” was cited as a problem in Cambodia, Mozambique, Nicaragua and Tanzania.

"to reduce or eliminate uniform requirements, encourage PRSPs to explore wider range of policy options and define clearer partnership frameworks for better accountability"

The review commends the involvement of new actors in the policy dialogue process. However, this falls short of exerting a significant influence over the content of PRSPs. There is little discourse on possible policy trade-offs and alternative macro-economic frameworks.

Due to weak country monitoring mechanisms, there is a tendency towards donor-focused monitoring. This results in skewed accountability. Efforts for donor coordination around the PRSP remain under-realized.

The review suggests Bank staff should not “impose a particular World Bank view point”. A tall order considering the enormous influence of joint staff assessments(JSAs), Bank economic sector work and the final power of sign-off retained by the IFIs.

The review acknowledges the contradiction of a Washington sign-off: “the Bank management’s process for presenting a PRSP to the board undermines country ownership”. The IFI boards must endorse interim PRSPs, PRSPs, annual progress reports on the basis of JSAs. “The JSAs have shortcomings that undermine achievement of goals” – they tend to be descriptive rather that analytical. The review suggests “a major redesign or discontinuation of the JSA” and proposes interactive means such as stakeholder workshops.

The review highlights other key civil society critiques of the PRS initiative namely persistence of structural adjustment policies, little parliamentary involvement, non-institutionalised participation mechanisms, weak implementation of impact assessments and poor donor coordination. PRSPs are not mainstreamed in national policy-making processes and are disconnected from budgetary and electoral processes.

The review points out that the PRS process has meant different things to various actors – governments see it as added conditionality, civil society as offering scope for leverage and voice in policy-making, while for donors it offers a mechanism for better aid delivery. These varied interpretations have implications for coordination and implementation.

A parallel evaluation by the IMF’s Independent Evaluation Office of the PRGF was released end July. It concludes that the PRSP approach has the potential to encourage country-owned development, but that achievements so far fall considerably short of their potential. This echoes the OED evaluation findings. See EURODAD’s analysis of this.