AGHD PRSP Learning Event

Africa Great Lakes and Horn DepartmentJanuary 2002

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PRSPs in PracticePRSPs in Practice

Origins of the PRSP ideaOrigins of the PRSP idea Core principlesCore principles Phasing & key elements of a PRSPPhasing & key elements of a PRSP What’s newWhat’s new Links with other instruments/processesLinks with other instruments/processes Emerging ExperienceEmerging Experience Relevance in conflict & post-conflict Relevance in conflict & post-conflict countriescountries

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Origins of the PRSP IdeaOrigins of the PRSP Idea Poor record on poverty reduction in 1990sPoor record on poverty reduction in 1990s

Findings on aid effectiveness (limits of projects, Findings on aid effectiveness (limits of projects, undermining of govt. systems & capacity…)undermining of govt. systems & capacity…)

Limits of conventional conditionality Limits of conventional conditionality

Justification for big increase in multilateral Justification for big increase in multilateral funding for debt relief (HIPC II)funding for debt relief (HIPC II)

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Country-led/owned based on participationCountry-led/owned based on participation Outcome orientedOutcome oriented Comprehensive – analysis of povertyComprehensive – analysis of poverty Medium to long term perspectiveMedium to long term perspective Donor partnership under government Donor partnership under government leadershipleadership

Core PRSP PrinciplesCore PRSP Principles

Sept. 1999 the PRSP replaced the PFP (Sept. 1999 the PRSP replaced the PFP (Policy Policy Framework PaperFramework Paper) as the governing contract ) as the governing contract between the IMF/World Bank & client countries.between the IMF/World Bank & client countries. Central to it are five principles:Central to it are five principles:

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I-PRSPI-PRSP PRSP (I)PRSP (I) PRSP (II)PRSP (II)9-24 months9-24 months 3 years3 years

HIPC(II)HIPC(II)DecisionDecision

PointPoint

HIPC(II) HIPC(II) CompletionCompletion

PointPoint

11stst Annual AnnualProgress Progress

ReportReport

PreparatiPreparationon

Status Status ReportReport

22ndnd Annual Annual Progress Progress

Report etc..Report etc..

PRSP Schedule & Key ElementsPRSP Schedule & Key Elements

I-PRSPI-PRSP PRSP (I) PRSP (II)PRSP (II)9-24 months 3 years

HIPC(II)HIPC(II)DecisionDecision

PointPoint

11stst Annual AnnualProgress Progress

ReportReport

PreparationPreparationStatus Status ReportReport

22ndnd Annual Annual Progress Progress

Report etc….Report etc….

PRSP elements:PRSP elements: Poverty analysis Poverty analysis Goals/targetsGoals/targets Prioritised policy actionsPrioritised policy actions Med-term budget fwMed-term budget fw Financing plan Financing plan External assistanceExternal assistance Participatory processParticipatory process

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What’s New?What’s New?

Linking strategy to the fiscal & macro Linking strategy to the fiscal & macro frameworkframework

Reducing the disconnect between policy & Reducing the disconnect between policy & results (structuring actions viz. impact on results (structuring actions viz. impact on poverty)poverty)

Opening up strategy process to broad-Opening up strategy process to broad-basedparticipationbasedparticipation

Opportunities for new ways of delivering Opportunities for new ways of delivering aid(pooled funding of general budget, joint aid(pooled funding of general budget, joint appraisal, common performance assessment)appraisal, common performance assessment)

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Links with other instruments Links with other instruments

I-PRSPI-PRSP PRSP (I)PRSP (I) PRSP (II)PRSP (II)

HIPC(II)HIPC(II)DecisionDecision

PointPoint

HIPC(II) HIPC(II) CompletionCompletion

PointPoint

PRGF PRGF (replaces (replaces

ESAF)ESAF)PRGF perf.criteria/benchmarks (3 years)

HIPC triggers

Goals & targets (5-10 years)

I-PRSPI-PRSP PRSP (I) PRSP (II)PRSP (II)

HIPC(II)HIPC(II)DecisionDecision

PointPoint

PRSP elements: Goals/targets Prioritised policy actions Med-term budget fw

MTEF

Sector strategies &priorities

Inter-sectoral prioritiesResource constraints

Expenditure monitoring

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Cont...Cont...

Link with PRSC more complex. Designed to Link with PRSC more complex. Designed to support PRSP implementationsupport PRSP implementation

PRSC structured as a series of annual single-PRSC structured as a series of annual single- tranche programmatic adjustment credits withtranche programmatic adjustment credits with clear performance benchmarks linked to the clear performance benchmarks linked to the PRSP (initially a replacement for SACs)PRSP (initially a replacement for SACs)

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Bank has put in place 5 ‘due diligence’ tests.Bank has put in place 5 ‘due diligence’ tests. Full PRSPFull PRSP Social/structural diagnostic or review (SSR)Social/structural diagnostic or review (SSR) PER, CFAAPER, CFAA Poverty & social impact analysisPoverty & social impact analysis Environmental assessment Environmental assessment

Only 3 PRSCs in place so far – Uganda, Vietnam (DFID co-financing both) & Burkina Faso, 2 or 3 in the pipeline

Cont...Cont...

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Emerging ExperienceEmerging Experience

‘ ‘Upgrading’ of poverty policy – MoFs engagedUpgrading’ of poverty policy – MoFs engaged

Achieved at some cost to senitments to nationalAchieved at some cost to senitments to national ownership but IFIs getting better at stepping backownership but IFIs getting better at stepping back

PRSP process & document heavily influenced byPRSP process & document heavily influenced by density of previous reform effort(s)density of previous reform effort(s)

Synergy with MTEFs especially importantSynergy with MTEFs especially important

Value-added: clear policy vision linked to results, Value-added: clear policy vision linked to results, increased policy space for CSOs/private sector etc.increased policy space for CSOs/private sector etc.

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Participatory processes generally limited to Participatory processes generally limited to consultation, depth of understanding limitedconsultation, depth of understanding limited

Ambitious targets, weak prioritisation & costingAmbitious targets, weak prioritisation & costing of policy actionsof policy actions

Disconnect/lags between related reform efforts –Disconnect/lags between related reform efforts – civil service reform, local govt. reforms - & PRSPcivil service reform, local govt. reforms - & PRSP

M&E still the poor relativeM&E still the poor relative

Cont...Cont...

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Relevance in Conflict SettingsRelevance in Conflict Settings

No straightforward pictureNo straightforward picture

Rwanda – opportunity of the PRSP has been Rwanda – opportunity of the PRSP has been seized upon as an input to wider national seized upon as an input to wider national reconciliationreconciliation

Sierra Leone – IFIs have re-engaged and an Sierra Leone – IFIs have re-engaged and an I-PRSP produced, but major concerns about the I-PRSP produced, but major concerns about the Govt. ownership, capability & CSOs capacity to Govt. ownership, capability & CSOs capacity to respond to the PRSP timetablerespond to the PRSP timetable

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How & on what basis is govt’s commitment to How & on what basis is govt’s commitment to poverty reduction being judged?poverty reduction being judged?

Are decisions about when IFIs/donors re-engageAre decisions about when IFIs/donors re-engage based on an analysis of the political economy ofbased on an analysis of the political economy of conflict?conflict?

What are the minimum requirements in terms of What are the minimum requirements in terms of a functioning budget/administrative system for a a functioning budget/administrative system for a PRSP process to be viable?PRSP process to be viable?

Key QuestionsKey Questions

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How does any proposed consultation processHow does any proposed consultation process take account of the dynamics of conflict?take account of the dynamics of conflict?

How do other processes of peace & reconciliationHow do other processes of peace & reconciliation relate to the PRSP?relate to the PRSP?

To what extent are the analysis of poverty andTo what extent are the analysis of poverty and proposed policy actions informed by conflict/securityproposed policy actions informed by conflict/security issues? Does this imply different assessmentissues? Does this imply different assessment criteria?criteria?

Cont...Cont...