How successful have the Poverty Reduction Strategy Papers (PRSP) been in transition economies? This paper by the Overseas Development Institute looks at the PRSP process in a number of former communist countries. It argues that, while the basic principles of the PRSP process are likely to be desirable in these countries, the specific context of transition means that these principles operate in different ways.
All the countries covered in this note faced unprecedented shocks in 1990/91 as they made the sudden transition away from centrally planned economies towards more pluralistic political and economic systems. While some former communist countries have managed the transition admirably, the 12 countries of this study have had much more mixed records. Experience of developing PRSPs in these countries suggests a need for more capacity building around participatory methodologies and the drafting of strategies through consultation. Although the first full PRSPs are nearly complete in many of these countries, some of them have not yet produced a draft PRSP. In all cases there remain important issues concerning future versions of PRSPs.
- These countries have been independent for only a decade; political and administrative systems that were formerly sub-national have had to transform into independent national systems.
- They have no history of democracy and, in several states, political power has been concentrated by constraints on civil liberties.
- In several cases there has been intense conflict that impacts on state building efforts, as well as on democratic reform, the economic profile and donor relations.
- Economically the challenges are also significant. The reforms required to make the transition from a command economy to a market economy are considerable.
- Some of the countries have natural resources, but their ability to exploit these resources in support of broad-based economic growth will take some time to develop. Trade and investment are presently disrupted.
- Five of the Low Income Commonwealth of Independent States (LICIS) countries have levels of international debt that are a cause for particular concern (Armenia, Georgia, Kyrgyz Republic, Moldova and Tajikistan).
It may be that the transition countries present special challenges for participation that are not encountered in other regions – further research on this issue would highlight areas of concern and opportunities for innovative support.
- The PRSP process exposes weak links between government bodies. It may be that expectations around ownership and institutional involvement should be tailored to suit the transition environment.
- Countries have pursued different institutional frameworks for PRSP development. The impact of these choices should be analysed.
- Further research on the current experience of integrating Medium Term Expenditure Frameworks and PRSP processes should highlight key constraints and opportunities.
- Donors will need to support processes of accountability to national stakeholders for delivery on the PRSP and find ways to balance this with their own needs for performance assessment.
- Civil society capacity for engaging with the various phases of the PRSP process is extremely low, and should be supported where possible.
- Although PRSPs are national documents, regional issues (especially trade, security, and shared resources such as water) are of vital importance. Research is needed into how the PRSP process can take account of these factors.
