Download Poverty Reduction Strategy Paper - Basic Facts

POVERTY REDUCTION STRATEGY PAPER (PRSP)
Basic Facts2012
What is aPoverty Reduction Strategy (PRSP)?
A Poverty Reduction Strategy Paper (PRSP) is an assessment of poverty and describes the macroeconomic,
structural, social programs and policies that countriesintend to pursue over a number of years to promote
growth and reduce poverty; it includes external financing needs and guaranteed sources of funding1. The PRSP
is prepared by governments of low-income countries through a participatory process involving domestic and
external development partners and supporters, including the International Monetary Fund (IMF) and the
World Bank. The PRSP, initiated by the IMF and the World Bank in 1999, is a comprehensive country-based
strategy for poverty reduction. PRSPs provide the important link between national public actions, support of
donors, and development outcomes needed to meet the UNMillennium Development Goals (MDGs)2.
Main principles of the PRSP
There are five main principles of the PRSP:
o Country driven - broad-based participation of civil society and privatesector in all operational steps
o Results oriented - focused on results thatwill benefit the poor
o Comprehensive in recognizing the multidimensional (multiple ranges) nature of poverty
o Partnership oriented- coordinated participation of development partners
(E.g. government, national stakeholders, and external donors)
o Based on a long-term perspective for poverty reduction
Key areas for public action in a PRSP
Four priority areas for public action in a PRSP are:
1. Macroeconomic and structural policies forsupporting reasonablegrowth in which the poor take part
2. Governance development, including public sector financial management
3. Effective programs and policies in various sectors
4. Reasonable costs and enough funding for main programs
PRSP process
1
Poverty Reduction Strategy Papers (PRSP) Factsheet, IMF 2011; available at http://www.imf.org/external/np/exr/facts/prsp.htm
Poverty Reduction Strategy Papers (PRSP), Country leadership in setting priorities key to reducing poverty, IMF 2011; available at
http://www.imf.org/external/np/prsp/prsp.aspx
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The PRSP processcanvary from one country to another, depending on governance and the situation in each
country. Broad-based consultations on priority issues (including policy issues with civil society groups and
external partners) may influence the strategy in general. However, the design and implementation of the
processisup to the respectiveauthorities and governments:
o
o
o
o
Participatory process within government bodies and agencies ( e.g. ministries, parliament, local
government)
Other stakeholders (supporters)participation (e.g. civil society groups, women’s groups, Disabled
Peoples’ Organizations (DPOs), academic institutions, private sector, etc.)
Bilateral (two-sided) and multilateral (many-sided) external development partners’ participation
Mechanisms to include the poor and their representative organizations
However, some aspects in the process can be similar across countries, particularly the following three areas 3:
o
o
o
Priority public actions: PRSPs should provide a detailed public sector budget that show money has
been allocated for costs and expenses. Each government can also decide on priorities regarding policy
reforms, recognizing that the actual steps of implementation may be affected by political and
institutional limitations
Public expenditure management system: The PRSPs need to clearly decide on programs to
ensureefficiency,transparency, and accountability in public expenditure management. Such
improvementsareimportant toshow externaldonors thatdevelopmentalsupport, including budget
supportlending, will be appropriately used
Monitoring and evaluation systems: Without significant results in monitoring and evaluation,
nations and external donors will not be able to determine the importance and effectiveness of
theirpolicies and support programs. It should be also recognized that this is a longer-term
commitmentthat will need more capacity building in the country
Content of PRSP
Full PRSPs are expected to summarize the most important public actions over a three-yearperiodby including
the following information:
o Presenting the country’s macroeconomic plan
o Summarizing the overall public expenditure program(both capital expenditure and regular expenditure)
and its allocation among key sectors
o Setting out major policy actions,institutionalreforms and planned dates for implementation
Can civil society participate?
Civil society groups are encouraged to participate in policy dialogues. Their participation ensuresa more
effective realization of programs. Inmost cases, participation of civil society has been limited to consultation and
provision ofinformation only.NGOsare interested in ensuring that civil society is able to participate as effectively
as possible in policy dialogues as well as various program realization. This also includes participation in the
design of the macroeconomic (large economic)plans as well as open negotiations of IMF loans and the relevant
macroeconomicconditions.
What steps are taken as follow up to the PRSP?
3
A Sourcebook for Poverty Reduction Strategies, JeniKlugman; available at
http://siteresources.worldbank.org/INTPRS1/Resources/383606-1205334112622/5301_overview.pdf
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Countries should submit Annual Progress Reports to the Boards of the IMF and the World Bank. NGOs and
civil society partners can also monitor implementation independently. Initially it was expected that PRSPs
wouldbe revised every three years4. However, following the IMF and World Bank Comprehensive Review of
the PRSPs Approach in 2001-20025, there is someflexibility (up to five years6).
The Role of IMF
In order to further improve the effectiveness of the PRSP process, the IMF continues to7:
o Assist countries in the design of realistic, flexible, reasonable, macroeconomic frameworks
(plans)that are linked to national strategies and budgets
o Coordinate theIMF’s country missions and programs towork as closely as possible with domestic
partners on the PRSP and country’s budget
o Strengthen public expenditure management in order to maximize the impact of public spending
on poverty reduction
o Work with other donors for better-coordinated assistance that will strengthentheeffectiveness of
aid and rationalize support for PRSP effective implementation
References
____________________________________________________________

A Sourcebook for Poverty Reduction Strategies,
JeniKlugmanhttp://siteresources.worldbank.org/INTPRS1/Resources/3836061205334112622/5301_overview.pdf

IMF and World Bank Comprehensive Review of the PRSPs Approach, 2001-2002
http://www.imf.org/external/NP/prspgen/review/2002/032602a.pdf

Poverty Reduction Strategy Papers (PRSP), IMF 2011
http://www.imf.org/external/np/prsp/prsp.aspx

Poverty Reduction Strategy Papers (PRSP) Factsheet, IMF 2011
http://www.imf.org/external/np/exr/facts/prsp.htm

Poverty Reduction Strategy Papers (PRSPs): A Rough Guide, Bretton Woods Project, April
2003
http://www.brettonwoodsproject.org/topic/adjustment/prsp_roughguide/prsp_roughguide.pdf
4
Poverty Reduction Strategy Papers (PRSP), IMF 2011; available at http://www.imf.org/external/np/prsp/prsp.aspx
IMF and World Bank Comprehensive Review of the PRSPs Approach, 2001-2002; available at
http://www.imf.org/external/NP/prspgen/review/2002/032602a.pdf
6
Ibid, p.95
7
Poverty Reduction Strategy Papers (PRSP), Donors support design of realistic plans and governance reforms, IMF 2011; available at
http://www.imf.org/external/np/exr/facts/prsp.htm
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The Poverty Reduction Strategy Paper (PRSP) Basic Facts 2012 is prepared by Disabled Peoples’
International, Human Rights Defenders Project, with the financial support of the Government of Canada
through theCanadian International Development Agency (CIDA). It can be circulated and used for research,
education or advocacy purposes, provided that DPI is acknowledged. Use for commercial purposes is strictly
prohibited. Any comments, please contact [email protected]
The views expressed in this document are those of DPI and may not in any circumstances be regarded as the
official position of the Canadian International Development Agency (CIDA).
Disabled Peoples' International
214 Montreal Road, Suite 402
Ottawa, Ontario
K1L 8L8 CANADA
www.dpi.org
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