PRSP Learning Event

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PRSP Learning Event

• EECAD - Low income countries
• 11 April 10 am

2
Origins of the PRSP Initiative

• Poor record on poverty reduction in the 1990s
• Findings on aid effectiveness and limits of
  traditional conditionality
• Justification for increase in multilateral
  funding through debt relief

3
PRSP Principles

• Key principles
• Country-led and ownership increased through
  participation
• Comprehensive - macro, structural, social
• Medium to long term perspective
• Outcome-oriented, based on analysis of poverty,
  and prioritised
• Donor partnership under government leadership
• What is new about this?
• Linking macro and fiscal framework to PR strategy
  - costed strategy
• Opening up policy process to broad based
  participation
• Opportunities for new ways of delivering aid

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Context matters

• No cookie cutters!
• Low-income transition countries have specific
  features
• Weak history of evidence-based policy making
• Lack of civil society participation
• Lack of familiarity with international aid
  community - but rising levels of debt. Different
  players than other regions.
• Poor governance environment, with several
  countries affected by conflict
• Country-specific politics- elections, parties,
  conflicts

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Expectations - Ownership

• National poverty reduction strategy more likely
  to succeed if supported by broad based ownership
• Broad based ownership more likely if civil
  society and the poor influence policies
• Accountability to citizens strengthened, thereby
  reducing poverty (where related to weak
  governance and poor service delivery record)
• Technical benefits too policies to benefit the
  poor are more readily identified (though danger
  of shopping lists)

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Experience - Ownership

• Ownership of externally driven process?
• MoF involvement key - difficulties with line
  ministry involvement (Tanzania, Rwanda)
• Weak capacity for process across govt. (Albania)
• PRSP ideally builds on existing nat plans -
  augmenting with more participation, linking to
  resource envelope, and results orientation.
  (Nepal)
• Importance of working with existing dynamics -
  including political dynamics (Moldova)

7
Experience - Participation

• Some opening of policy space in country -
  fragile
• Generally limited to consultation with limited
  feedback to CS
• Broadly similar formats local, regional,
  national workshops, plus some PPAs (Ethiopia)
  Parliaments not generally involved
• Strong advocacy of some key themes but not on
  macroeconomic policy (Kenya)
• Very high expectations on the part of civil
  society - some bitter disappointments (Kampala
  declaration, PRSP Review)

8
Country examples

• Kenya - very positive participatory process
  despite lack of high level political commitment
  and poor governance environment
• Bolivia - legal framework for participation
  established in the National Dialogue Law
• Albania - GoA needed convincing of merits of
  participation - achieved through training of
  officials active collaboration of PRSP
  Secretariat across ministries
• Vietnam - High quality PPA underpinned
  consultation linked to ongoing process of
  national policy formulation

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Links with resource envelope

• Budget and MTEF
• Key lesson is to move on these in parallel with
  the PRSP
• Constrained fiscal choices in CIS means spending
  must be limited - but some budget process
  measures can have pro-poor impact
• PEM/PER
• Tanzania - good example of nesting the PER
  process within the overall PRS process
• Watch for over-optimistic growth forecasts
  (Bolivia)
• Is donor financing on budget? (TA in Nepal)

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Results orientation

• Policy making based on analysis of needs - but
  there are serious gaps in data in many cases (and
  data gathering capacity)
• Missing middle - lack of concrete steps from
  analysis to interventions
• Feedback of ME and PSIA into future iterations
  of PRSP (inc Annual Reports) - needs
  institutionalisation
• (Somewhat covert) expectations around
  participation in this area - PPA and civil
  society monitoring of implementation. Need to
  stimulate demand for information

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Results orientation 2

• Vietnam Development Targets - country-specific
  version of the MDGs, established in DFID-financed
  workshop with civil society and donor
  participation. Intermediate benchmarks to measure
  progress. (Also PPA mentioned earlier)
• Uganda - UDN involved in public expenditure
  tracking at local level
• Bolivia - Bilat Coop Network identified need for
  indicators and targets in the area of
  institutional development

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Donor behaviour

• Leading edge DFID thinking in this area
• lower transactions costs - harmonisation
• streamlined conditionality
• predictable aid flows
• transparency of operations
• untied aid
• general budget support
• donor obligations on aid
• external assessment of partnership

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Donor behaviour 2

• Perhaps agenda not realistic where DFID not a big
  player and where big players are unsympathetic
• Coordination can take place without common
  financing mechanisms (Georgia)
• Projects and SWAps - can support the PRSP
• Is direct budget support an option? Risks and
  safeguards
• Are there opportunities to influence the agenda
  in these countries?

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For discussion

• What is relevant for LICs in transition?
• What is already happening?
• How can DFID feasibly and constructively support
  the processes of change implied by the PRSP
  agenda?
• Ownership
• Participation
• Results-orientation
• Other donors

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PRSP Schedule

• Key Events

Preparation Status Report
1st Annual Progress Report
2nd Annual Progress Report etc..
I-PRSP
I-PRSP
PRSP (I)
PRSP (II)
9-24 months
2-5 years

• PRSP elements
• Poverty analysis
• Goals/targets
• Policy actions
• ME plan
• Med-term budget fw
• Financing plan
• External assistance
• Participatory process

HIPC(II) Completion Point
HIPC(II) Decision Point