Does the Poverty Reduction Strategy Paper (PRSP) process represent a significant change in approach to lending by international financial institutions (IFIs) and donors? Has it increased national ownership and effectiveness of poverty reduction efforts? This book, based on a study commissioned by the Strategic Partnership for Africa and published by the Overseas Development Institute, examines these questions through case studies of seven Sub-Saharan African countries (Benin, Tanzania, Malawi, Mozambique, Mali, Rwanda and Kenya). It finds that, while there are some grounds for optimism, full national ownership of the process has not yet been achieved.
The study shows that the PRSP process has contributed to bringing national poverty reduction efforts into the mainstream. Ownership of the process is quite strong within technocratic ministries, such as the Ministry of Finance, although this is not often shared by local government or regional agencies. However, political commitment to the PRSP process is highly variable, which poses difficulties where PRSP implementation depends on overcoming political obstacles. The study also shows that:
- PRSPs have greater potential as instruments of change where complementary reforms, such as the introduction of Medium Term Expenditure Frameworks, are already underway.
- The PRSP process has had some qualified successes in creating new spaces for domestic policy dialogue. These successes may be amplified in the second round of PRSPs.
- Most PRSPs have insufficient mechanisms for monitoring progress towards final outcomes. Appropriate progress benchmarks could liberate countries from external accountability and provide feedback into strategic debate.
- Serious concerns remain where even PRSPs with a moderately high degree of national ownership (such as Tanzania’s) may not prove effective instruments for poverty reduction.
The study also argues that PRSPs present an opportunity for a substantial transformation of the aid relationship. While this will depend on improving the quality of the national policy process, donor behaviour can also promote positive change. Donors should:
- Work with greater transparency and openness, to increase public trust and maximise synergies.
- Assist broad-based, consistent, long-term support to participatory policy making.
- Be prepared to take greater fiduciary risks if they are to realise the potential developmental benefits.
- Accelerate the harmonisation of performance frameworks and conditionalities related to PRSPs.
- Benchmark their own performance and agree definite timetables for the next steps in the PRSP process.
