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The Poverty Reduction Strategy Initiative

The Poverty Reduction Strategy Initiative. Independent Assessments of World Bank and IMF Support by Operations Evaluation Department & Independent Evaluation Office. Presented to the DAC Evaluation Network November 9, 2004 Gregory K. Ingram. Two evaluations with joint background work.

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The Poverty Reduction Strategy Initiative

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  1. The Poverty Reduction Strategy Initiative Independent Assessments of World Bank and IMF Support by Operations Evaluation Department & Independent Evaluation Office Presented to the DAC Evaluation Network November 9, 2004 Gregory K. Ingram

  2. Two evaluations with joint background work • Ten country case studies with agreed methodology; four produced jointly • Albania, Cambodia, Ethiopia, Guinea, Mauritania, Mozambique, Nicaragua, Tajikistan, Tanzania, Vietnam • Joint workshop to vet the preliminary country findings • Stakeholder survey developed jointly, and administered in all ten countries

  3. Significant net benefits to collaboration • Lower transactions costs to country evaluees (e.g., joint mission, single reports) • No significant cost change for evaluators • Working together took more time • Broader base of evaluative material for each evaluation (e.g., ten case studies) • Recommendations carried more weight, as both Boards heard some common messages

  4. PRS Process: Achievements • Better than Policy Framework Papers • Increased attention to poverty diagnosis • More stakeholders involved • Strategies often provided a framework for policy dialogue with governments • Relevant and should be supported….but has not yet reached potential

  5. Initiative’s design inhibits country ownership • PRSP is a condition for access to IDA/PRGF • Washington review process inhibits ownership • More focus on producing documents than on improving domestic processes • Little guidance on adaptation to country conditions

  6. Donor alignment on processes, not yet on programs • Donors’ processes improved… where governments already manage aid well • Donors - including Bank - haven’t defined how program content will change • Lack of prioritization in PRSPs makes alignment difficult to demonstrate

  7. Strategies do not feature poverty impact and growth • Weak analytical base • Narrow public expenditure focus • Inordinate attention to the social sectors

  8. Aid to both PRSP and non-PRSP countries is increasing Average Net ODA Flows Per Country 2000 - 2002

  9. Poverty impact still largely unknown Progress on MDGs Between 1999 and 2003 (12 PRSP Countries)

  10. To improve the PRS process, both OED and IEO recommend • Allow greater country-driven flexibility in implementation of the PRS approach • Focus on improving domestic processes, not on submitting documents • Clarify the purpose and role of the JSA to ensure that BWI assessments are transparent, candid, and helpful as a basis for the selectivity judgments underlying financing decisions

  11. World Bank: alignment has not entailed major changes CASs Before And After PRSPs

  12. World Bank: country-specific analytical work declined 140 120 100 80 Number of Analytical Tasks 60 40 20 0 96-99 00-04 Country-Specific Analytical Work Required Analytical Work

  13. OED also recommends • Change Board review processes to more transparently support country ownership and more effectively link to decision about the Bank’s program • Help identify actions with the most poverty pay-off • Use PRSP to define a partnership framework with mutual accountability

  14. IMF: Main Findings on PRGF • Limited alignment: PRGF programs draw on and fit with PRSPs only to a limited extent • Compared to ESAF, programs have more fiscal flexibility and support increases in social spending • There is no evidence of generalized aid pessimism or disinflation bias in programs • IMF structural conditionality has been streamlined, but judging change in Bank-Fund aggregate conditionality is difficult

  15. IMF: Main Findings on Role of IMF • Some broadening of policy space where macro-stability is not a pressing concern • Little involvement in broadening participation in macroeconomic policy debate • Little contribution to filling country-specific knowledge gaps about micro-macro linkages • Increased attention to protecting key social objectives and more accommodation of higher aid flows in program design • However, institutional framework for determining appropriate medium-term resource envelope is vague and IMF “catalytic” role is unclear

  16. IEO also recommends Clarify what the PRS approach implies for the IMF’s own operations • in terms of IMF engagement in the PRS process • regarding PRGF program design and formulation Strengthen prioritization and accountability on what the IMF itself is supposed to deliver • Expectations on IMF’s contribution need to be matched by appropriate staff resources • But even a “smaller” role for the IMF will require more fundamental changes in its way of doing business • Use country-driven PRS process to set priorities Strengthen framework for establishing the external resource envelope

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