At the threshold of the new millennium the World Bank decided to make poverty eradication its number one priority. The most immediate and concrete outcome of, what at the time was heralded as a ‘sea change’ in international development policy, was the announcement of the new Poverty Reduction Strategy Papers (PRSPs). Making developing countries the principal drivers of their own development strategies, the launch of the PRSP was marketed by the Bank as a final departure from top-down, Washington-led development.

What led to this transformation of what was previously seen as an organization inherently resistant to change and how well does Bank rhetoric match practice two years into the new millennium?

Change – how did it happen?

In ActionAid’s experience, the Bank’s introduction of the PRSP process was a response to a number of critical accelerating pressures, both internal and external. Internally, the introduction of poverty reduction as the major thrust of Bank policies through the Comprehensive Development Framework (CDF) put ownership and participation on the agenda. While the CDF was initially seen by many as too ‘Banky’ and lacking in ownership outside the Bank itself, the introduction of the PRSPs secured the backing of several Bank members, including the Scandinavians and the UK. Internal demands for Bank decentralization to country offices and a willingness by a critical mass of Bank staff and board members to initiate wide-ranging reforms were also important.

Civil society organizations (CSOs), such as ActionAid, were able to challenge the Bank’s development thinking through many different processes and fora, including through membership of the NGO–World Bank Committee, throughout the 1990s. Apart from such internal pressures for change, popular demands for an end to the economic and social damage of structural adjustment programmes, the global movement for an end to the debt burden, and CSOs’ continuous pressure on the Bank to improve the participation of developing countries in the development of Country Assistance Strategies were also important in bringing about the PRSPs.

While most CSOs welcomed the launch of the PRSP process, seeing it is an important opportunity to move away from the one-size-fits-all approaches to economic development previously being promoted by the World Bank, the jury is still out with respect to the impact of the process on the ground. The following assessment is based on the experiences that we in ActionAid have gathered directly and in partnership with local CSOs in PRSP processes in several countries.

Public participation – myth or reality?

It is assumed that public participation in the formulation of a PRSP will enhance local ownership. However, this raises a question about the type and quality of participation. In some countries, the dominant perception is that the PRSP process has enlarged the space for public participation in policy formulation (Kenya, Nepal, Malawi, Rwanda, Uganda, Vietnam). In Kenya, the establishment of a Civil Society Desk in the government PRSP Secretariat was found to be extremely useful in facilitating civil society engagement. In other countries, however, serious concerns have been expressed about the lack of time allowed for meaningful participation (Bangladesh, Pakistan). In these cases, local ownership of a PRSP is clearly constrained by deadlines imposed by the international financial institutions (IFIs).

In many instances, public participation is limited to consultation and the public is defined as government, business and capital city-based NGOs; poor people and civic associations working in marginalized areas are left out. Hardly any women are part of the consultation. When it comes to the point of making decisions and determining priorities between potentially conflicting needs, CSOs usually find themselves excluded. Moreover, there is little to no feedback from the government or IFIs about the tradeoffs and on what basis they have been made. In fact, experience in developing countries shows that the closer the PRSP gets to finalization, the more secretive and exclusive the process becomes.

This leads to another issue of concern: the dominant role of IFIs (and occasionally northern states) in the process. PRSPs are a prerequisite to qualify for concessional lending and IFIs ultimately hold the power of approval. Because of this dependency, governments will often disregard local demands or interests in order to adhere to IFI conditionalities.

How real is the poverty focus?

Here, too, the assessment shows mixed results. In some countries (Kenya, Vietnam), a stronger poverty focus is evident, in particular in relation to education and health, which can to a large extent be attributed to the involvement of CSOs in the PRSP process. In other countries, most notably Malawi, the understanding of poverty seems not to have shifted beyond the over-simplistic notion of generalized economic growth trickling down to reduce poverty.

Of particular concern is the fact that there have been no changes in macroeconomic and structural adjustment policies. In fact, IFIs and many governments seem to hold that ‘hard’ economic issues (related to macroeconomic adjustment, liberalization and privatization) are exempt from a poverty analysis – despite their direct impact on poverty and the poor.

In spite of all the real risks and difficulties associated with our involvement in the PRSP process, ActionAid believes that the benefits of engagement outweigh the disadvantages and potential pitfalls. At the end of the day, it is the only show in town.

Salil Shetty is CEO of ActionAid. He can be contacted at salils@actionaid.org.uk

This article draws heavily on work done by colleagues in ActionAid’s Washington office and by the UK Advocacy team, not to mention our country teams in the South.

The next step: participatory monitoring and evaluation of PRSPs

Broad participation in monitoring and evaluation is critical if PRSPs are to be implemented efficiently and equitably. Now that several countries have completed their final PRSP documents, this is the major area where there is real potential for the various stakeholders, including the poor, to get involved in the PRSP process.

The need for participation in monitoring has been recognized by almost all countries engaged in the PRSP process, but so far few have put this into operation. One of the best cases so far seems to be Uganda, where a joint government-civil society system has been introduced to monitor implementation of their PRSP. Other institutional arrangements include government-led systems with participation through advisory bodies in Nicaragua and Gambia, a parallel civil society system in Bolivia, and a multi-stakeholder system with no clear institutional leader in Tanzania.

In most cases, the constraint on participatory monitoring seems to be the weak capacity of both civil society and the government to undertake such a task, as well as the lack of obvious avenues for citizens to give feedback to service providers and policymakers. In these initial stages, there is also some lack of clarity about implementation of the PRSP, which naturally makes it hard to specify how it should be monitored.

There are two key challenges regarding participatory monitoring for countries that are now in the stage of implementing their PRSP. First, they need to make other existing in-country monitoring systems, which may exist in sector ministries like health, more participatory. This will enable these systems to be integrated with the overall PRSP monitoring in a participatory way, and will also help address the lack of capacity for the latter. Second, where there is no existing monitoring tradition, it is important to tie participatory monitoring in to other relevant processes like decentralization. This will generate accountability and ownership in these processes, as well as enabling monitoring of the PRSP to take place. In future, ensuring that the data and feedback generated by this process are used to guide policy should help to institutionalize participation in PRSP monitoring.

This note was prepared by Janmejay Singh of the Participation & Civic Engagement Group of the World Bank on the basis of a recent study of 21 completed PRSP documents by Sabina Schnell and Reiner Forster of the same group. The full report from the latter study will soon be available at the group’s website at http://www.worldbank.org/participation. The comments made here reflect the views of the author, and not those of the World Bank Group and its Board of Directors.