In recent years many development assistance agencies have promoted a multidimensional approach to poverty reduction and governance issues have featured prominently in poverty reduction strategy papers (PRSPs). However from the perspective of most highly indebted poor countries (HIPC) countries such a multidimensional approach to reducing poverty may present an overwhelming agenda. This report from DFID clarifies some of the dimensions of the governance problems facing HIPC countries and suggests activities for assisting governments in addressing them.
The report suggests that the best way to approach the problem of an extensive agenda and limited capacity to address it may be to reduce demand on poor countries in ways that enhance the potential of reform activities that are undertaken.
- Trying to find ways to address governance issues through a minimalist agenda and assistance geared to reform difficulty, may contribute greatly to HIPC country endeavours to put pro-poor reforms in place.
- Improving governance as part of a country strategy to reduce poverty requires creating or strengthening institutions, developing or enhancing the capacity of governments to provide effective service delivery and increasing participation of the poor in policy making and politics.
- The transition from the commitments of a country strategy paper to addressing these issues in the real world is deeply problematic in the context of HIPC.
- Thus the PRSP process presents a dilemma in that poverty reduction requires reforms that the poorest countries are in the weakest position to make. The resulting action agendas may be extensive and lack priorities for reforms.
Three areas are outlined where DFID can use its expertise to assist countries with limited capacity to respond to such agendas: country capacity assessments, priorities for reducing poverty and assessing degrees of difficulty.
- Development agencies can assist by helping to break down the imposing governance agenda facing HIPC governments and considering under what conditions it makes sense to tackle certain kinds of governance deficits.
- Realistic PRSP commitments for governments and expectations of the World Bank which leads in promoting poverty reduction strategies as a condition for debt relief should be established.
- Country progress should be assessed relative to where countries started rather than in terms of objectives achievable in an idealised world.
- Lessons may be learned by drawing on the historical experience of countries with weak governance capacity which managed to reduce poverty.
- The degree of difficulty of governance reforms varies. Assistance programmes should be structured in response to realistic assumptions about the degree of difficulty to be encountered in these reforms.
