REDUCTION STRATEGY HUMAN DEVELOPMENTPARTNERSHIPS CIVIL SOCIETY PARTICIPATIONNATIONAL CAPACITY BUILDING PRO-POOR POLICIESMILLENNIUM DEVELOPMENT GOALS NATIONAL OWNERSHIPPOVERTY MONITORING POVERTY REDUCTION STRATEGYHUMAN DEVELOPMENT PARTNERSHIPSCIVIL SOCIETY PARTICIPATION NATIONAL CAPACITY

PRO-POOR POLICIES MILLENNIUM DEVELOPMENT GOALSNATIONAL OWNERSHIP POVERTY MONITORING

OVERTY REDUCTION STRATEGY HUMAN DEVELOPMENTCIVIL SOCIETY PARTICIPATION NATIONAL CAPACITY

O-POOR POLICIES MILLENNIUM DEVELOPMENT GOALSPOVERTY MONITORING POVERTY REDUCTION

STRATEGY HUMAN DEVELOPMENT PARTNERSHIPSCIVIL SOCIETY PARTICIPATION NATIONAL CAPACITY BUILDINGPRO-POOR POLICIES MILLENNIUM DEVELOPMENT GOALSNATIONAL OWNERSHIP POVERTY MONITORINGHUMAN DEVELOPMENT PARTNERSHIPSCIVIL SOCIETY PARTICIPATION NATIONAL CAPACITY

PRO-POOR POLICIES MILLENNIUM DEVELOPMENT GOALSNATIONAL OWNERSHIP POVERTY MONITORING

OVERTY REDUCTION STRATEGY HUMAN DEVELOPMENTPARTNERSHIPS CIVIL SOCIETY PARTICIPATIONNATIONAL CAPACITY BUILDING PRO-POOR POLICIESMILLENNIUM DEVELOPMENT GOALSNATIONAL OWNERSHIP POVERTY MONITORINGPOVERTY REDUCTION STRATEGY HUMAN DEVELOPMENTPARTNERSHIPS CIVIL SOCIETY PARTICIPATIONNATIONAL CAPACITY BUILDING PRO-POOR POLICIESMILLENNIUM DEVELOPMENT GOALS NATIONAL OWNERSHIPPOVERTY MONITORING POVERTY REDUCTION STRATEGYPARTNERSHIPS CIVIL SOCIETY PARTICIPATION

United Nations Development ProgrammeEvaluation Office

EVA LUATION OF UNDP’S ROLE IN THE PRSP PRO C E S S

V O L U M E I : M A I N R E P O R T

EVALUATION OF UNDP’S ROLE IN THE

PRSP PROCESSV O L U M E I : M A I N R E P O R T

September 2003

United Nations Development Programme

Evaluation Office

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The views expressed in this publication do not necessarilyre p resent those of the member countries of the UNDP Exe c u t i veB o a rd or of those institutions of the United Na t i ons system thatare mentioned herein. The designations and terminologyemployed and the presentation of material do not imply anyexpression of opinion whatsoever on the part of the UnitedNa t i ons con c e rning the legal status of any country, t e r ri t o ry, c i ty or area, or of its authorities, or of its frontiers or boundaries.

ALSO IN THIS SERIES: Evaluation of UNDP’s Role in the PRSPProcess, Volume II: Country Reports. New York: UNDP. 2003.

Copyright © 2003United Nations Development ProgrammeEvaluation OfficeOne United Nations PlazaNew York, NY 10017, USAwww.undp.org/eo

Design: Colonial Communications Corp., Staten Island, NYProduction: AK Office Supply, New York,NY

EVALUATION TEAM

Team Leader: Professor John Weeks

Team Members: Michael ReynoldsAlemayehu Geda, Ph.D.(Ms.) Zenebeworke TadesseCarlos Oya, Ph.D.

National Consultants: Emil Aliyev (Azerbaijan)Ghulam Mohammad Arif (Pakistan)Oscar Alejandro Garcia Chacon (Bolivia)Hamidou Magassa (Mali)Getahun Tafesse (Ethiopia)Bedasson Shallanda ( Tanzania)Nguyen Thang (Vietnam)

EO Task Manager: Ruth Abraham

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ACRONYMS 4

FOREWORD 5

EXECUTIVE SUMMARY 6

CHAPTER I INTRODUCTION 10

CHAPTER II MAIN FINDINGS AND LESSONS 18

CHAPTER III CONCLUSIONS AND RECOMMENDATIONS 40

ANNEXES Annex 1: Terms of Reference 48Annex 2: The Evaluation Approach 54Annex 3: List of People Consulted 55Annex 4: Selected List of Documents 57Annex 5: Country Case Study 59Annex 6: Summaries From the Seven Country Reports 60Annex 7: Status of I-PRSPs and PRSPs (as of 23 April 2003) 66Annex 8: Poverty Reduction Strategies:

Areas of Focus and Examples of Progress in 2001 68

FIGURES Figure 1: Number of Country Offices Supporting & BOXES Various Dimensions of Poverty Monitoring 11

Box 1: Estimated Programme Expenditure for Goal 2 – Poverty, 2000-2002 13

Box 2: Pro-poor Policies 16Box 3: UNDP Commitment to PRSP Principles 16Box 4: Critiques of PRSP 19Box 5: An Example of CCA, UNDAF,

and PRSP Integration: Tanzania 21Box 6: Fostering National Ownership: The Case of Pakistan 26Box 7: An Example of Multi-donor Support

to the PRSP Process: Ethiopia 26Box 8: Advocacy for Broad-based Participation:

The Case of Bolivia 29Box 9: Enhancing Partnerships: The Example of Mali 34Box 10: Support to Poverty Monitoring:

The Example of Tanzania 36Box 11: The UNDP’s Comparative Advantages 37

Table of Contents

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BDP Bureau for Development PolicyBWI Bretton Woods InstitutionsCCA Common Country AssessmentCCF Country Cooperation FrameworkCDPR Centre for Development Policy & Research, SOASCO Country Office of the UNDPCPGS Comprehensive Poverty and Growth Strategy (Vietnam PRSP)CSLP Cadre Strategique de Lutte contre la Pauvrete (PRSP in French)HD Human Development HDR Human Development ReportHDRO Human Development Report OfficeHIPC Highly Indebted Poor Countries IBRD International Bank for Reconstruction and DevelopmentIDA International Development AssociationIFI International Financial InstitutionIMF International Monetary FundI-PRSP Interim Poverty Reduction Strategy PaperJSA Joint Staff Assessment of the IMF and World BankMD Millennium DeclarationMDG Millennium Development GoalMDGR Millennium Development Goal ReportNGO Non-governmental OrganisationNHDR National Human Development ReportODA Official Development AssistancePPA Participatory Poverty AssessmentsPRGF Poverty Reduction and Growth FacilityPRSP Poverty Reduction Strategy PaperRC Resident CoordinatorROAR Results-Oriented Annual Report (UNDP)RR Resident RepresentativeSNLP Strategie Nationale de Lutte contre la Pauvrete

(National Strategy for the Fight Against Poverty)SOAS School of Oriental & African Studies, University of LondonSPPRED State Programme on Poverty Reduction and Economic Development

(Azerbaijan PRSP)SURF Sub-Regional FacilityUNCT United Nations Country TeamUNDAF United Nations Development Assistance FrameworkUNDG United Nations Development GroupUNDP United Nations Development ProgrammeUNDP EO UNDP Evaluation OfficeUNFPA United Nations Population FundUNICEF United Nations Children’s FundWB World BankWSSD World Summit for Social Development

Acronyms

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The Po verty Reduction Stra tegy Pap er(PRSP) represents an area of strategicimportance to programme countries

and one of the core priorities for UNDP’sglobal pra c t i c e s — p ove rty re d u c t i on forhuman development. The declared objectiveof the PRSP is to promote poverty reductions t rategies that are country - d ri ve n , result ori e n t e d ,c om p re h e n s i ve, p ri o ri t i ze d ,p a rtnership based,and framed within a long-term perspective.To this end UNDP has become increasinglyengaged in supporting the PRSP process in response to requests from programmecountries. A Poverty Reduction Strategy isbeing planned, prepared or reviewed in morethan 70 of the world’s poorest countries.Indeed, 43 UNDP country offices reportedthat they were engaged in this process in2002, up from 11 in 1999 when the PRSPapproach was first introduced.

The purpose of this evaluation is to assistUNDP in positioning itself for a more effe c t i verole in the PRSP pro c e s s , with a view to learn i n glessons for its future engagement, therebyc on t ributing to the improvement of the pro c e s s .Taking note of the wider context of thePRSP process,the evaluation identifies somestrategic issues that impinge on UNDP’s roleboth at the corporate as well as at countryoffices level. The findings provide evaluativeevidence on UNDP’s role in the achievementof key PRSP outcomes such as national ownership; broad-based participation; multi-dimensional nature of poverty and pro-poorgrowth; coherence with long term strategy;d eve l o pment part n e r s h i p s ; and pove rty m on i t o ring ca p a c i ty. The ev a l u a t i on emph a s i ze dthe need for strengthened country officesupport to national partners—governmentinstitutions, civil society, and the private sector—in formulating and implementingthe PRSP process. This evaluation is theresult of a collective effort of a number ofp e o p l e, beginning with the ev a l u a t i on team ledby Professor John Weeks: Michael Reynolds,A l e m ayehu Geda, Ze n e b ew o rke Ta d e s s e, a n d

Carlos Oya; the National Consultants whocontributed their time and expertise to thecountry studies; and from the EvaluationOffice, Nurul Alam, Deputy Director andRuth Abra h a m , Task Manager for the ev a l u a t i on . I nvaluable advice was provided atdifferent stages of the evaluation by membersof the External Advisory Panel.

I would also like to ack n owledge the expertadvice and valuable contribution provided by Sartaj Aziz, former Minister of Financeand Foreign Affairs of the Government ofPa k i s t a n , who served as Senior Advisor for theevaluation. We owe a great debt of gratitudeto the seven UN Resident Coord i n a t o r s / U N D PResident Representatives and their staff fortheir support and collaboration during thec o u n t ry studies and pre p a ra t i on of the countryre p o rt s . Close con s u l t a t i ons were maintainedwith evaluation and operations colleagues at the World Bank and the InternationalM on e t a ry Fund in Wa s h i n g t on throughout thep ro c e s s , to whom I extend my grateful thanks.

I also extend my appreciation to the crewwho provide tech n i ca l ,e d i t o ri a l ,a d m i n i s t ra t i veand logistic assistance. In particular I wouldlike to mention EO colleagues HajeraAbdullahi, Flora Jimenez,Elvira Larrain andAnish Pradhan, for their untiring support.

Khalid MalikDirectorUNDP Evaluation Office

Foreword

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CONTEXT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Between August 2002 and March 2003,the Evaluation Office of UNDP assessed therole of UNDP in the Po verty Reduction Stra tegyPaper (PRSP) process,taking into account inparticular the diversity of the organization’sp ove rty re d u c t i on activities.The PRSP re p re s e n t san area of strategic importance to UNDPand a core priority for one of its key globalpractices—poverty reduction. The objectiveof the ev a l u a t i on was to assess how UNDP hasp o s i t i oned itself to support the PRSP pro c e s sin various pro g ramme countries including itsrole in part n e ring with the United Na t i on ss ys t e m , the Wo rld Bank and the Intern a t i on a lMonetary Fund (IMF) in the PRSP process.

In December 1999, the Exe c u t i ve Boards ofthe Wo rld Bank and the IMF approved a newp o l i cy instru m e n t , the PRS P, designed to serveas a framework document for concessionallending. (Specifically, PRSPs were intendedas a basis for external debt relief under the DebtI n i t i a t i ve for Heavily Indebted Poor Country,begun in 1996 and enhanced through moreg e n e rous terms in 1999.) The decl a red objectiveof the PRSP is to promote poverty reductions t rategies that are country dri ve n , results ori e n t e d ,c om p re h e n s i ve, p ri o ri t i s e d ,p a rtnership based,and framed within a long-term perspective.

The focus of the evaluation is on UNDP’srole in the PRSP process, but this task couldnot have been achieved without placing it inthe overall context of the PRSP itself and itsobjectives. The interventions by UNDP canon ly be con s i d e red to be a part of the ev o lv i n gd ynamics of the PRSP pro c e s s . Though it wasa difficult balancing job, the ev a l u a t i on look e dat both process and content issues. It com b i n e ddesk rev i ew and field based work , a n di n cluded an analysis of UNDP’s con t ri b u t i on sto key PRSP outcomes in 26 PRSP countri e s ,extensive literature reviews and wide stake-holder consultations. In-depth studies wereconducted in a selected number of countries,which provided a good mix of typology ofcountries and regions, namely Azerbaijan,

Bolivia, Ethiopia, Mali, Pakistan,the UnitedRepublic of Tanzania and Vietnam.

The ev a l u a t i on undertaken by UNDPexamined the organiza t i on’s role in theachievement of six key PRSP outcomes:(a) increased country ownership in the PRSP preparation process; (b) broad-basedparticipation of civil society and the privates e c t o r; (c) mu l t i - d i m e n s i onal nature of pove rtyand pro-poor growth; (d) coherence betweenP RS Ps and other lon g e r - t e rm national planningi n s t ru m e n t s ; (e) deve l o pment part n e r s h i p s ;a n d( f ) pove rty mon i t o ring ca p a c i ty at national andlocal levels.The evaluation also reviewed therole of UNDP as custodian of the residentcoordinator system in the PRSP process,emphasizing the links between the PRSPs,the United Nations Development AssistanceFramework (UNDAF), and the MillenniumDevelopment Goals (MDGs).

The engagement of UNDP in the PRSPprocess has not taken place in a vacuum. Itsfocus on poverty and the role of povertyreduction strategies in addressing povertyissues has been long standing.The publica t i onof the first Human Development Report in1990 played an important role in bringingpoverty and distributional equity back intothe development agenda. The organization’smandate in poverty reduction is mirrored inthe high demand by programme countriesfor UNDP support in this area. Programmec o u n t ries have re c e i ved the organiza t i on’s supportin the PRSP process since the launch of thisi n i t i a t i ve, and continue to seek its active engage-ment in the preparation and implementationof the PRSPs. In 2002, 43 country officesprovided support to and were involved in thep re p a ra t i on and implementation of thePRSPs and Interim-PRSPs, up from 36 in2001, 24 in 2000, and 11 in 1999.

STRATEGIC FINDINGS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation concludes that the PRSPp rocess is a dyn a m i c ,d eveloping ph e n om enon

Executive Summary

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in which UNDP should engage more fully asa partner. The findings from the evaluationraise some issues which are strategic to UNDPengagement—and they also empiri ca llyground many of the outcomes expected fromthe PRSP pro c e s s .These include the link betw e e nMDGs and the PRSP; poverty analysis andPRSP policy links; the relationship betweenUNDP/UN and the Bre t t on Woods Institution s( BW I ) , and the re l a t i onship between UNDPand the UN country team (UNCT).

M i llennium Development Goals (MDG s )and the PRSP: It is observed that only a fewPRSPs have benefited from an analysis ofthe MDGs, which seems to indicate that little relationship exists between the two.Country offices are not always consistent inemphasizing that the MDGs constitute theoverarching framework for the formulationand implementation of the PRSPs. Onlyrecently have national MDG reports begunto appear. While some MDG reports aree xc e ll e n t , most countries have simply ad o p te dthe MDGs as opposed to adapting themthrough a national consultative process tomake them country specific.

Poverty analysis and PRSP policy links:It appears from the country visits that PRSPsdo not directly link poverty and growth.Most PRS Ps provide a coh e rent growt hstrategy; however, this may not always bepro-poor.There is no clear link in the PRSPsb e tween pove rty diagnosis and pove rtyreduction policies. Rather, poverty reductionpolicies tend to be an ‘add-on’ to a generalgrowth strategy. Nevertheless, most PRSPsfocus on poverty issues, which is a step forward from previous national documentson growth strategies. Poverty and growth aretreated separately and links between themare weak. This represents a key entry pointfor UNDP given its emphasis on the multi-dimensional nature of poverty and its focuson capacity building.

UNDP, the UN system and the BWI:The evaluation found that lack of clarity ofthe respective roles of the UN and the BWIhas hampered the development of a coherentapproach by the UNCT in engaging in thePRSP process at the country level. Despitethis lack of partnership clarity, in severalcountries the resident representative/residentc o o rdinator has seized opportunities to create conditions under which country teams

have been able to make critical contributionsto PRSP formulation and implementation.

UNDP and the UN sys t e m : The ev a l u a t i onfound that the lack of coordination betweenUN instruments and the PRSP underminesthe greatest strength that the UN system has,the complementarity among UN agencies.Partnerships were ad hoc with lack of a c onsistent appro a ch . H ow ever some pro g re s shas been made on the UN front. The CCA/UNDAF and PRSP relationship needs to beconsciously thought through and aligned.

FINDINGS ON SELECTEDPRSP OUTCOMES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The main purpose of the evaluation was to provide evaluative evidence on the role of UNDP in the PRSP process, focusingspecifically on its role in achieving the six keyPRSP outcomes mentioned above.

National ownership: Although progresshas been made in fostering gove rn m e n townership of the PRSP process,broad-basedownership of PRSPs is generally lacking.The evaluation found that typically, one partof the government (e.g. Ministry of Finance)has strong ownership of the PRSP at theexpense of others. Progress on involving civilsociety to broaden national ownership hasbeen limited. Fostering national ownershiprequires the full participation of differentp a rts of gove rnment and civil society o r g a n i za t i on s , w h i ch means ove rc om i n gca p a c i ty con s t raints faced by public and private stakeholders. In most cases, however,efforts to ensure a country-driven processhave made less progress.

UNDP has fostered national ownership of theP RSP process by both gove rnments and non -government stakeholders. It has contributedto broadening ownership or advocating it amon gdonor and programme countries. But theo r g a n i za t i on could do more to promote nation a ldebate on development strategies and causesof pove rty. Am ong the organiza t i on’s stre n g t h sare its perceived impartiality and ability toserve as intermediary between governmentsand communities of donors and lenders. Thesuccess stories of the country offices in Ethiopia,the United Republic of Ta n zania and Vi e t n a min facilitating donor coordination are modelsof good practice.

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B road-based parti c i p a ti o n : Fo s t e ring bro a d -based participation is the weakest of the sixoutcomes for UNDP, although it is one ofthe organization’s natural strengths. Broad-based part i c i p a t i on facilitates efforts to t ra n s f o rm gove rnment ownership of the PRS Pprocess into national ownership. UNDP hasconsiderable outreach that could be moree f fe c t i ve ly leve raged in all of the above elements of the part i c i p a t i on pro c e s s . It couldfoster ongoing dialogue between governmentand civil society, support mechanisms toi n s t i t u t i on a l i ze dialogue, and build ca p a c i ty tos u p p o rt ow n e r s h i p, i n cluding the deve l o pm e n tof home-grown pro-poor policies.

In Azerbaijan, Bolivia, Ethiopia and Mali,UNDP has made major contributions to theparticipation and consultation process. Thesubstantial contribution made by UNDP inBolivia can largely be attributed to two factors:(a) that UNDP treated the process as an endin itself, not as a deri v a t i ve of the PRSP pro c e s s ;and (b) that Bolivia has a long history ofpopular mobilization.

Multidimensional nature of poverty andpro-poor growth: Treatment of poverty inPRSPs in some countries is too narrow, over-emphasizing the income dimension, ratherthan encompassing a variety of other aspects,which are country and community specific.It was obser ved in countries visited, that thepro-poor content of PRSPs increased whenUNDP focused on fostering national discussions on the nature of poverty, via itswork on monitoring MDGs and the socialcosts of poverty; e.g. in Bolivia as a result of the influential impact of the last twoNHDRs; and in Vi e t n a m , w h e re mon i t o ri n gM DGs played an important part in raisingawareness of the complexity of poverty.

Coherence with long-term strategy: Thatthe PRS Ps and other policy documents con c u rin emphasizing poverty is not necessarily apositive outcome when the latter have littlep ro-poor con t e n t . This again presents apotentially useful role for UNDP. Further-more, links between the PRSP process ands h o rt and medium-term fiscal instruments areweak. For long-term planning, PRSPs needto be integrated into sectoral and thematicprogrammes. UNDP can assist in assuringthese links, particularly through its role ascustodian of the resident coordinator system,since most United Na t i ons organiza t i on s

h a ve close ties with re l evant sectoral ministri e sand other sectoral partners. A major flaw inmany PRSPs is the absence of an explicitexplanation of how the PRSP fits into theplanning framework.

Pove rty monitoring ca p a c i ty: The ev a l u a t i onfound that institutional arrangements andcapacities for pove rty mon i t o ring re q u i red forPRSPs are inadequate. Although UNDP’ss u p p o rt for pove rty mon i t o ring covers a ra n g eof actions linked to pove rty re d u c t i on stra t e g i e sand PRS Ps ,( e . g. ca p a c i ty deve l o pm e n t ,p ove rtyassessments, participatory monitoring andev a l u a t i on , and work on NHDRs), as ill u s t ra t e din the case studies undertaken by the mission ,m on i t o ring pro g ress tow a rds pove rty re d u c t i onre p resents the greatest unre a l i zed opport u n i tywithin the PRSP process for UNDP. Asc o u n t ries are in the initial stages of mon i t o ri n g,the scope and nature of the process has yet tobe clarified since monitoring is principallyfor the purpose of re p o rting to external agencies.By fostering national ownership of theMDGs, UNDP would be the logical UNorganization to underline this anomaly andpress for PRSP reports aimed at nationalaudiences, which in turn would be used asprogress reports for donors and lenders.

KEY CONCLUSIONS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

First, the evaluation is of the firm viewthat the PRSP has the potential to transformthe policy making and the partner dialogueprocess in positive and unprecedented ways.This of course applies to countri e s ,w h i ch havechosen to conduct PRSPs. The evaluationadvances the view that UNDP needs to playa more substantial and substantive role in thePRSP process. Indeed in PRSP countries,the PRSP process should play a central rolein UNDP’s policy development and supportactivities as well as in its country level opera t i on s .Second, in most of the countries reviewed,the PRSP process has generated positive ch a n g e sin the relationship between the governmentand the gove rn e d , the deve l o pment com mu n i ty,and partner governments. Yet there is a largegap between its potential and current reality.The ev a l u a t i on con cludes that UNDP shouldengage more fully as a partner in the PRSPapproach which is a dynamic, developingphenomenon. Third, UNDP engagement

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needs to be guided by the following:• The PRSP is placed within the

Millennium Declaration.• PRSPs become national documents, not

borrowing instruments and change fromm a c ro e c on omic fra m ew o rks to macro -development strategies, and that macro-e c on omic policy becomes subsumed withina pro-poor framework.

MAJOR IMPLICATIONSFOR UNDP _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation has major implications forUNDP and the way it conducts its business,particularly at the country level. Five keyareas are highlighted below:

P RSP as the action plan for MD: To bri n gadded value to the PRSP pro c e s s ,U N D P canhelp deliver on the PRSP prom i s e, by helpingto transform PRSP into a medium-termplanning instrument in support of theachievement of MDGs, through strategicpartnerships. This of course applies to thosecountries that choose to undertake PRSPs.The UNDP and the UNCT can assume a majorrole in influencing and supporting the PRSPp ro c e s s , to be pro - p o o r, and more part i c i p a t o ry,so that MDGs are national ly owned.

UNDP/UN and the BWI partnership:Delivering on the potential of the PRSPrequires full and joint partner effort of theUNDP, the World Bank and IMF, in thecontext of a UN team effort led by the UNResident Coord i n a t o r. Ac c o rd i n g ly UNDP/UNcan and should become a key partner in providing support for the PRSP.

UN system coord i n a ti o n : While the UNDPhas institutional and local strengths to engagein the PRSP process, UNDP’s core strengthlies in the UN Resident Coordinator system.This needs to be exploited more fully byUNDP and as part of its partnership stra t e gy,it can take the lead in fostering commitmentby other UN agencies to the key outcomes ofthe PRSP process, and in promoting linksb e tween the PRSP and the CCA and UNDA F.

Making the PRSP play a more central ro l ein its country level operations: UNDP hasthe potential to provide critical internationalinput into the PRSP process in many countri e sb e cause of its com p a ra t i ve analyt i cal and policystrengths. It can provide effective support to

the PRSP process in the following key areas:a) broadening and deepening participation;b) providing capacity building support foranalytically sound macroeconomic and otherpolicies that are pro - p o o r, p roviding analyt i ca llysound policy options, and also calling for thepoor to define and seize upon benefits, ratherthan await their arri v a l ; c) pove rty analysis andm on i t o ri n g, f o s t e ring broad-base part i c i p a t i onin identifying pove rty (its mu l t i d i m e n s i on a l i ty ) ,finding appro p riate indicators (its measure m e n t )and monitoring policy impact; d) capacitybuilding for government and civil society toprovide the basis for home-grown, countrydriven policies, i.e. in policy formulation,policy analysis, and budgeting; facilitatingresearch and capacity to formulate pro-poorgrowth strategies in research centers and civil society institution s ; and building up independent evaluation capacities that p romote tra n s p a re n cy and accountability;e) co-ord i n a t i on by the UNCT of UN part n e r s ,d onors and lenders: U N D P’s re l a t i ve ly limitedfinancial contribution can be ‘leveraged’ byexploiting the full potential of the UNCT, inhelping the government in co-ordinating thec on t ri b u t i ons of donors and lenders in ca p a c i tybuilding; and f) cooperation with nationaland international partners, government andcivil society.

Organizational capacity building: Thet ra n s i t i on to the new UNDP focus on pro a c t i ve,‘u p s t re a m’ p o l i cy engagement re q u i res far morei n t e n s i ve and con c e rted work ,e s p e c i a lly in theCOs, but also in Headquarters. Familiarisingstaff in COs with pro-poor policies, e s p e c i a llypro-poor macroeconomic policies, is a pre-condition to the UNDP’s efforts in capacitybuilding to foster hom e - g row n , c o u n t ry -owned development strategies. PRSP workrequires application of particular expertisethat is absent or over-burdened in mostcountries. Proven competence in humand eve l o pment thinking with strong policybackground is a prerequisite for UNDP staffengaged in the PRSP process, in order forstaff to facilitate or contribute to the contentdiscussion of PRSP as an equal partner.Substantive expertise in this area in the COis critical to advocate pro-poor policies andissues of human poverty. To perform thesero l e s , U N D P’s own ca p a c i ty has to be substantially upgraded at both the countrylevel and at headquarters.

CHAPTER IINTRODUCTION

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In December 1999, the Executive Boardsof the Intern a t i onal Mon e t a ry Fund (IMF)and the World Bank approved a new

p o l i cy instru m e n t , the Po verty ReductionStrategy Paper (PRSP), which was designedto serve as a fra m ew o rk document for c on c e s s i onal lending. Sp e c i f i ca lly, P RS Ps wereintended as a basis for external debt reliefunder the Heavily Indebted Poor Country( HIPC) initiative,begun in 1996 and ‘e n h a n c e d’through more generous terms in 1999.

The PRSP is envisaged as a new part n e r s h i p -based approach to the challenge of reducingpoverty in low-income countries. Nationallyowned poverty reduction strategies are to beat the heart of this new approach. Followingits mandate to integrate the objectives ofpoverty reduction and growth more fully intoits opera t i ons in its poorest member countri e s ,the IMF established the Poverty Reductionand Growth Fa c i l i ty (PRGF) in 1999,replacing the Enhanced St ru c t u ral Ad j u s t m e n tFa c i l i ty. Pro g rammes supported by the PRG Fand International Development Association( I DA ) , the Wo rld Bank’s con c e s s i onal window,must be framed around a comprehensive,nationally owned PRSP prepared by the b o r rowing country. The PRSP is thenendorsed by the Boards of the IMF andWorld Bank, in their respective areas ofre s p on s i b i l i ty, as the basis for the institution s ’concessional loans and for relief under the

enhanced HIPC Initiative .The PRSP appro a chalso stresses the underlying principle thatn a t i onal pove rty strategies should fosterd omestic and external partnerships thatimprove the effectiveness of developmentassistance. Many bilateral donors have alsojoined the partnership in support of thePRSP approach.

The declared objective of the PRSP is topromote poverty reduction strategies that arec o u n t ry dri ve n , result ori e n t e d ,c om p re h e n s i ve,prioritised, partnership based, and framedwithin a long-term perspective. Other majorfeatures of the PRSP are that it should be ana n a lyt i cal fra m ew o rk , i n t e g rating macro -e c on om i c , s t ru c t u ra l , s e c t o ra l , and socialconsiderations; it should lay out a set ofpoverty reduction measures and policies; andit should span an initial three-year timeframe.As of 23 April 2003,30 countries hadcompleted full PRSPs and 48 (see Annex 7)had completed Interim-PRSPs1 (I-PRSPs).2

As this evaluation points out, expectationsabout the nature, scope, and thrust of thePRSP have been only partially realised.

The PRSP process represents an area ofstrategic importance to the UNDP and iscentral to one of its key global practices, thatof pove rty re d u c t i on for human deve l o pm e n t .UNDP programme countries have receivedthe agency’s support in this process and continue to seek its active engagement in the

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

1. World Bank Web site, www.worldbank.org.

2. Since the preparation of full PRSPs was a complex process taking longer than a year, and since countries were in needof interim debt relief, countries were requested to prepare an I-PRSP. This is intended to be a short document thatdescribes a country’s current poverty situation and policies and presents a plan for preparation of a full PRSP.I-PRSPs would bring countries to the decision point under HIPC.

FIGURE 1: NUMBER OF COUNTRY OFFICES SUPPORTING VARIOUS DIMENSIONS OF POVERTY MONITORING

Linked to PPS

Capacity development

Poverty assessments

Participatory emphasis

NHDRs

0 5 10 15 20 25 30 35

PRSPs Other PRSs

Number of country offices

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p re p a ra t i on and implementation of thePRSPs.In 2002, 43 UNDP Country Offices( COs) re p o rted on their support andi nv o lvement in the pre p a ra t i on and i m p l e m e n t a t i on of PRS Ps / I - P RS Ps , a nincrease from 36 in 2001, 24 in 2000, and 11in 1999. Not only has the UNDP becomei n c re a s i n g ly engaged in supporting theP RSP process but the nature of its engagement is also evolving. Whilst supportfor policy frameworks for poverty reductionremains the major focus of UNDP povertyre d u c t i on effort s , p ove rty mon i t o ring isgaining increased attention by COs (seeFi g u re 1). The UNDP has emphasised d i f fe rent aspects of the PRSP pro c e s s ,depending on the context and the situationin which it finds itself. It recognises thatthese are early days for PRSPs and that itneeds to see what progress has been made sofar, judge whether it is where it expected to be, and determine if it is proceeding in the right direction. The organisation alsoacknowledges the fact that it is critical toexamine where each country was at thebeginning of the process and judge progressin achieving PRSP outcomes accordingly.

In March 2002, the IDA and IMF, afterundertaking a review of the PRSP approach,p roduced two re p o rts on Main Fi n d i n gsand E a rly Experience with I-PRSPs and Full PRSPs. The review was preceded by anumber of regional meetings on nationalPRSPs during 2001, in which the UNDPwas a key collaborator.The review found thatp ro g ress had been made in the area ofstrengthening country ownership; that therewas a more open policy dialogue within government and across parts of civil society;that a more central role had been given top ove rty re d u c t i on in policy discussion s ,i n cluding macro e c on omic and stru c t u ra lpolicies; and that there was acceptance bymajor donors of the principles of the PRSPapproach (UNDP is cited as an examplea m ongst the major UN organisation s ) ,h e ralding the possibility of stronger part n e r s h i p swith countries and improved donor coord i n a t i on .The review also pointed out the need forimproving the PRSP process, i.e. on PRSPp a rt i c i p a t o ry pro c e s s e s . The rev i ew notesthat the “open and participatory nature of

the PRSP approach is regarded by manyas its defining characteristic and its most s i g n i f i cant ach i eve m e n t” . It highlights,h ow eve r, the limited role so far of parl i a m e n t sin the preparation, approval, and monitoringof country strategies; the lack of involvementof specific civil society groups (e.g. women’sgroups, private sector, and direct representa-tives of the poor); and the need for strongerpartnerships between donors and countries.

A third report on PRSPs produced laterthat year concluded the following:3

“...although experience with PRSP imple-mentation still remains limited ...while therehas been pro gre s s ,t h ere remains substantial scopefor improvement ... Development partners(including the Fund and the Bank) have as u b s tantial role to play in providing analytica land technical support ... much remains to bedone to improve our own understanding ofthe policies and approaches that are requiredfor sustainable pro-poor growth and povertyreduction ... E x p e c tations rega rding the pace ofprogress from this point forward will thereforeneed to be tempered with patience...”

THE HUMAN DEVELOPMENT APPROACH _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The UNDP’s engagement in the PRSPprocess has not arisen in a vacuum. Its focuson poverty and the role of poverty reductionstrategies in addressing poverty issues has along history. The publication of the firstUNDP Human Development Report (HDR)in 1990 played an important role in bringingpoverty and distributional equity back intothe development agenda. The HDR 1990d e m on s t rated that deve l o pment inv o lve smuch more than economics alone, and thisbroader approach was encapsulated in thet e rm ‘human deve l o pm e n t’ . The annualHDRs have helped to shift the developmentdebate back to what matters most—the peopleand their choices. The human developmentapproach of the UNDP is a framework thatidentifies the fulfilment of human aspira t i on sas the objective of development.It highlightsthe fact that human development is aboutcreating an environment in which people can develop to their full potential and lead

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

3. The Development Committee of the Bank and the Fund, PRSPs—Progress in Implementation, September 2002,37-38.

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productive, creative lives in accord with theirneeds and interests.4

‘Human development’ by one definition oranother has been endorsed by virtually alld eve l o pment assistance agencies. The PRSP isbut the most recent global manife s t a t i on of thev i ew that people are the core of ‘d eve l o pm e n t’ .Thus, in an important sense, this evaluationof the UNDP’s engagement in the PRSPprocess is also a review of the extent to whichthe UNDP has stamped PRSPs with itsa p p ro a ch to the deve l o pment pro c e s s .T h o u g hother agencies have adopted aspects of the human development approach, these aref re q u e n t ly treated as ‘a d d - on s ’ to the t ra d i t i onal emphasis of each institution .Further, the human development approachis a dynamic concept, which has evolved c on s i d e ra b ly since its initial con c e p t u a l i s a t i on.Most of the basic elements of the PRSP canbe found in previous UNDP discussions ofhow to foster human development: countryow n e r s h i p, p a rt i c i p a t i on , and the mu l t i -dimensional nature of poverty, to name themost obvious. In this context, the UNDP’sengagement in the PRSP process faces a ch a ll e n g e : to convince intern a t i onal development partners, partner governments,and civil society in PRSP countries that the holistic human development approachshould be the agenda for poverty reduction.

Success in meeting this challenge is greatlyenhanced by the Millennium DevelopmentGoals (MDGs) that embody the spirit of thehuman development approach. Containedin the Millennium Declaration (MD),whichwas adopted in September 2000 by 191 nation sat the UN Millennium Summit, the MDGsfocus on eight major goals, including theeradication of poverty, that are to be achievedbetween 1990 and 2015.

COMMITMENT TOPOVERTY REDUCTION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The UNDP’s mandate in pove rty re d u c t i onis reflected by the fact that there is a highdemand by programme countries for theU N D P’s support in the area of pove rty re d u c-t i on . The second greatest share of estimatedcountry level programme expenditures in2000-2002 from combined donor and localre s o u rces were delive red in the area of pove rtyre d u c t i on at 26% (US$ 1 379 mill i on ) .5 The are athat has attracted the highest proportion ofUNDP regular resources during 2000-2002is under poverty reduction goal, sub-goalone—human and income poverty addressedin national poverty frameworks—accountingfor 20% of UNDP total estimated expenditure sfrom regular resources during 2000-2002.

BOX 1: ESTIMATED PROGRAMME EXPENDITURE FOR GOAL 2 – POVERTY, 2000-2002 (PERCENTAGES)

Sub-goal

G2-SG1

G2-SG2

Sub-goal Description

Human andincome povertyaddressed in national policy-frameworks

The asset base of the poorexpanded andprotected(human,physicaland financial)

G2 sub-totals

RegularResources

(%)

20

18

38

Other Resources(Cofinancing)

(%)

7

5

13

Total DonorResources

(%)

12

10

22

Other Resources(Government Cost

Sharing) (%)

13

17

30

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

4. UNDP Human Development Report 2001.

5. UNDP Report on the Multi-year Funding Framework, 2000-2003, 21 May 2003.

Source: UNDP Report on the Multi-year Funding Framework, 2000-2003,21 May 2003.

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(see Box 1). In addition to this figure, h ow eve r,though difficult to estimate, there are alsoelements of other UNDP goals, includinggovernance, environment and gender, whichhave targeted links to poverty reduction.

At the Wo rld Summit for So c i a lDevelopment (WSSD) held in Copenhagenin 1995, heads of state and representativesfrom 180 countries committed themselves to“f o rmulating or strengthening nation a lp ove rty era d i ca t i on plans to address thestructural causes of poverty”. In its responseto the commitments taken at WSSD, theUNDP launched the Pove rty St ra t e g i e sInitiatives Programme in 1996. This multi-donor initiative supported country efforts tod evelop national and local anti-pove rtystrategies and to identify and monitor thecauses and nature of absolute pove rty.The programme, offered in more than 100countries, had two main goals:

1.the establishment of the technical, institu-tional, and political basis for policy action,

2.civil society mobilisation to broaden publicdiscussion of poverty.

To enhance the effectiveness of povertyreduction strategies, the UNDP providedsupport and services to programme countriesin a number of are a s ,i n cluding the foll ow i n g :

• macroeconomic policy reform• participatory approaches to national and

sub-national budgeting linked to strategiesand targets for reducing pove rty and gender inequality

• p ove rty re d u c t i on strategies linked todecentralisation and community empow-erment programmes

• national capacity to monitor poverty andinequality

• n a t i onal ca p a c i ty to measure humanp ove rty and undertake part i c i p a t o rypoverty assessments and gender analysis

• poverty hearings to enhance civil societyand private sector input to national stra t e g i e s(see Annex 8 for areas of UNDP focus insupport of poverty reduction strategies)

The Thematic Trust Fund for PovertyR e d u c t i on was established to support the UNDPin diagnosing and mon i t o ring pove rty,

strengthening its national poverty reductions t ra t e g i e s , enhancing their part i c i p a t o rynature, and spurring greater progress towardthe 2015 MDGs.6 A number of studies and re p o rts have been produced by theUNDP to ill u s t rate its focus on global poverty reduction work.7

SUPPORT TOTHE PRSP PROCESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Though engagement in the PRSP processfollows logical ly from the UNDP’s previousw o rk , the extent of this engagement varies fromcountry to country. This is because despitethe strong and unambiguous commitment ofUNDP leadership to the PRSP pro c e s s ,there has been insufficient appreciation of itsimportance in some COs. Throughout thisreport, it is argued that engagement in thePRSP process can facilitate a qualitativee x p a n s i on of the UNDP’s influence ond eve l o pment stra t e gy, both globally andnationally, and can enable it to pursue theorganisational goal of moving upstream inthe policy process.

In recognition of the growing number ofCOs that were becoming engaged in thep re p a ra t i on , i m p l e m e n t a t i on , and mon i t o ri n gof PRSPs,a Policy Note was produced by theUNDP in August 2002.The stated intent of thePolicy Note was to strengthen the UNDP’supstream policy advice in its engagement inthe PRSP pro c e s s , since PRS Ps “o f fer improve dp rospects for real pro g ress on pove rty re d u c t i onprovided that the appropriate conditions arein place”. The note highlights “how UNDPsupport can contribute to the creation ofthose conditions...” 8

Since the PRSP principles have guided UNDPp o l i cy for some time, it is not surp rising that theleadership of the organisation has committeditself unambiguously to engagement in thePRSP process.

“...I have drawn the UN system,with the fullsupport of the Secretary-General, into fullyaccepting the PRSP as the dominant macro-economic instrument for developing countriesto organise their pri o rities internally and

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

6. UNDP Thematic Trust Fund: Poverty Reduction, August 2001.

7. UNDP Support for Poverty Reduction Strategies—the PRSP Countries, November 2002; UNDP Support for PovertyReduction Strategies—the PRSP Countries: Interim Report, September 2001; Conference Report: Poverty ReductionStrategies, What Have We Learned? Bergen, Norway, March 15-17, 2001; Choices for the Poor: Lessons from NationalPoverty Strategies, 2001; UNDP Poverty Report 2000; UNDP Support for Poverty Reduction Strategies, June 2000;Overcoming Human Poverty, 2000.

8. UNDP, Policy Note on UNDP’s Engagement in Poverty Reduction Strategy Papers, August 2002.

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their relationships with donors ex te m a l l y.And this despite continued uneasiness aboutthe extent to which these PRSPs are beinginternalised and owned and about the extentto which the macroeconomic tail may still bewagging the poverty dog. My own view is ifthose are problems, we need to work them outin the framework of the PRSP...[ W]e now see the UN’s own instruments for activityin [each] country as... provid[ing] a morec o o rd i n a ted and coh erent devel o p m e n tapproach within the PRSP framework. Andwe are not just working in that way, but weare fully supporting both governments and theBank and Fund in PRSP design.” 9

The concept of the PRSP is constantlyevolving, with a growing realisation that itshould not be viewed as ‘the dom i n a n tmacroeconomic instrument’, but rather asthe dominant poverty strategy instrument.This interp re t a t i on of the PRSP wouldb roaden the UNDP’s engagement, since not only would it treat the macro policyframework as only one component of theprocess, but also it would utilise macro-economic policies for facilitating pro-poorg rowth and enabling pove rty re d u c t i on policies.

Certain trends in the UNDP’s support tothe I-PRS P / P RSP process could be identifiedbased on an analysis of results reported in theROAR 2000 and 2001 by selected UNDPCOs.10 In terms of promoting broad-basedparticipation, the UNDP encouraged andsupported active participation of civil societyorganisations and community-based groupsas well as governments and the private sector.In Uganda, the UNDP contributed to thePRSP process with support to the UgandaVi s i on 2025 and pre p a ra t i on and disseminationof the Uganda Pa rt i c i p a t o ry Pove rty AssessmentPro j e c t . In Hon d u ra s , UNDP support t ranslated into the incorp o ra t i on of civilsociety in the PRSP process,and in Moldovaand Benin, the UNDP either provided forafor dialogue among civil society and otherdevelopment partners or actively and closelyw o rked with non - gove rnmental organiza t i on s(NGOs) and the private sector to supporttheir inputs to PRSP consultations.

With re g a rd to building part n e r s h i p sa m ong deve l o pment actors, the UNDPplayed a leading role in donor coordination

due to the strong credibility it had achievedwith donors as well as with governments. Asan example, in Armenia’s I-PRSP process,monthly donor coordination meetings werechaired by the UNDP along with the WorldBank and USAID on a rotational basis.The UNDP con t ributed significa n t ly tomobilising donors and to focusing the inter-n a t i onal com mu n i ty’s attention and assistancet ow a rd the PRSP process in various countri e s .In Benin, the UNDP provided technical andfinancial support to pove rty mon i t o ri n gmethodologies.

From the start of the PRSP process, theUNDP encouraged countries to harmonisethe formulation of their PRSP with alreadyexisting national pove rty re d u c t i on stra t e g i e s .For example, the UNDP supported gove rn m e n te f f o rts in Cape Ve rde to draw on con t ri b u t i onsto its National Long-Term Perspective Studywhile formulating its PRSP. In Nicaragua,it assisted the government in prioritisingp ro g rammes and policies for pove rty re d u c t i onand employment generation in its NationalPl a n . In Cambodia’s PRSP pre p a ra t i on pro c e s s ,the UNDP emphasised linkages betweenmacroeconomic policies and poverty.

Efforts were made by several UNDP COsin support of mainstreaming gender andhuman rights issues in the PRSP formu l a t i onprocess, as well as governance and HIV/AIDS issues. In Uganda and Za m b i a , on go i n ggovernance programmes supported by theUNDP were linked to the PRSP process,whilst in Burkina Faso and Honduras, COsd eveloped initiatives that integrated the p rom o t i on of gove rn a n c e, c re a t i on , a n doperationalisation of national gender policiesand support of HIV/AIDS pro g rammes in their PRSP formulation. The UNDP’ss u p p o rt for mainstreaming gender in nation a lp ove rty re d u c t i on strategies was evident in seve ra lcountries, including Albania, Mozambique,and Niger, and its support of the inclusion ofMDGs in governments’ policy planning wasalso evident in some countries.

One of the UNDP’s key areas of supportto the PRSP process was through the establishment of pove rty mon i t o ring andanalysis systems.In Benin and Burkina Faso,COs assisted in the establishment of Povertyor Social Observatories, which constitutedd e c e n t ralised mon i t o ring sys t e m s . In Gu y a n a ,

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

9. Mark Malloch Brown,UNDP Administrator, speaking at the Development Cooperation Forum at Atlanta, Georgia,inUSA, February 2002.

10. Albania, Armenia, Benin, Burkina Faso, Cambodia, Cameroon, Cape Verde, C.A.R., Chad, Georgia, Guyana, Honduras,Moldova, Mozambique, Nicaragua,Niger, Uganda,Zambia

16

the UNDP provided support to the LivingConditions Survey, which eventually formedthe basis of its PRSP, and in Mozambiqueand Cambodia, the UNDP supported theestablishment of a monitoring and evalua-tion system to measure the contribution ofU N D P - s u p p o rted com mu n i ty-based initiative sto the poverty reduction strategy. Assistancewas also provided to Georgia’s St a t eDepartment of Statistics in preparing anddisseminating Labor Market and ChildLabor Surveys, the results of which laid the ground for increased efforts in povertymonitoring. Further, poverty monitoring andanalysis systems began to be used to trackp ro g ress on the MDG s .The UNDP also beganproviding greater support to governments inimplementing economic policies that weremore pro-poor.

LINK BETWEEN PRSP AND MDGs _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The MD and its associated MDGs arecentral to the mission of the UNDP and arediscussed in detail below. The approach tothe PRSP process presented at the beginningof the next chapter could make it key to theachievement of MDGs. Hence the UNDP’sengagement in the PRSP process is rooted in the wider MDG objectives and targets.The United Nations Development Group( U N DG) Guidance Note on PRS Ps specifiesthat link clear ly.

Vi ewed in this con t e x t , UNDP engagementin the PRSP process can potentially help ac o u n t ry tra n s f o rm the PRSP from being mere lya tech n i cal management document to one thatcan provide the opportunity for creating an ew appro a ch to deve l o pment stra t e gy.The newapproach would permeate the relationshipbetween donors and lenders and recipientgovernments and their peoples. The basis ofthis vision is its human deve l o pm e n tapproach discussed above.

The UNDP Ad m i n i s t rator further pointedout that the PRSP has the potential to ra d i ca llychange the development agenda, when hecharacterised the international commitmentto the MDGs as a ‘big bargain’ between thedeveloped and developing countries.

“ [The MDGs] are part of an histori cMillennium Declaration ... [Success] hinges ona mutual recognition that there is no substitu tefor internally-led, bold reform in developingcountries … [E]fforts will at best only be partially successful if we neglect the secondhalf of the ‘big bargain’: a clear, unambiguouscommitment by the rich world to support thesegood faith efforts through tearing down tradeba rri er s , ac c el erating debt rel i ef, h elping poorerc o u n tries raise the domestic re s o u rces and priva teinvestment they need so badly.” 11

Further clarification of the relationshipb e tween the PRSP and the MDGs came at theend of 2002,after the Secretary-General hadassigned the UNDP the task of monitoringp ro g ress at a global level tow a rds theachievement of the MDGs. In essence, theMDGs would be both the goal and thebenchmark for poverty reduction, and theP RSP would be the implementing mech a n i s m .In other words, the PRSP would be the

BOX 2: PRO-POOR POLICIES

Explicit in the UNDP Human Developmentapproach are pro-poor economic and socialpolicies. These include a pro-poor formulationof the macroeconomic framework,which ischaracterised by an explicit emphasis on distribution,in order that the increment in economic growth benefit the poor dispro-portionately; that is, so the income share of the poor rises relative to that of the non-poor.This is achieved through:

1 . placing emphasis on medium and long-te rmgrowth along with short-term stabilit y, forexample, by taking a pragmatic approach to inflation targets in monetary polic y;

2. creating fiscal space for redistributivesocial expenditures, appropriate to theadministrative capacity of governments;

3. emphasising the role of public investmentin the growth process;

4. making adoption of all major policies (e.g.,liberalisation and privatisation) conditionalupon a positive impact on the poor.

BOX 3: UNDP COMMITMENT TO PRSP PRINCIPLES

National plans will address national prioritiesand set national goals and targets, includingthose identified in the Millennium Declarationand adapted to the country specific situation.National planning includes policies and strate g i e sfor poverty reduction in all its dimensions andaddresses poverty within a comprehensive andlong-term vision. This would, in effect, be thePoverty Reduction Strategy [Paper].

Source: UNDG Guidance Note on PRSPs,November 2001, p. 2-3.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

11. Ma rk Ma l l och Brow n , UNDP Ad m i n i s t rato r, s pe a king at the UN Inte rn ational Co n fe re n ce on Financing fo rDevelopment held in Monterrey, Mexico, March 18-22,2002.

17

‘ ro a d m a p’ for re a ching the MDG s . The PRS Pp rocess was initiated prior to the intern a t i on a lagreement on MDGs. However, the value ofthe PRSP has increased in view of its role inm on i t o ring the ach i evement of MDG s .Recent discussions at the senior levels of theUNDG and the World Bank have resultedin an understanding on the MDG/PRSPre l a t i on s h i p.1 2 For more than 70 of the p o o rest countri e s , the PRSP would con s t i t u t ethe primary strategic and implementationvehicle to reach the MDGs.

The UNDP’s re s p on s i b i l i ty for mon i t o ri n gand leading the campaign for the MDGscould enhance its ability to play a key role inthe PRSP pro c e s s , giving coh e rence and gre a t erpurpose for its work in Headquarters and inCO s . It could also facilitate the UNDP mov i n g‘u p s t re a m’ in the policy pro c e s s , a move that suitsits role as an advisor to governments,its non-partisan nature, and its human developmentapproach to poverty reduction.

THE EVALUATIVE APPROACH ADOPTED _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Within the overall context of the UNDP’sp ove rty re d u c t i on initiative s , the main purp o s eof the evaluation is to provide evaluativeevidence on the UNDP’s role in the PRSPp ro c e s s , focusing on its role in ach i eving six keyPRSP outcomes: increased national owner-s h i p, b road-based part i c i p a t i on by civil society and the private sector, addressing the multi-dimensional nature of poverty and increasedcommitment to pro-poor growth, coherencebetween PRSPs and longer term nationalplanning instru m e n t s ,p a rtnerships built betw e e ndevelopment actors, and poverty monitoringca p a c i ty built at national and local leve l s . T h eevaluation findings are expected to assist theUNDP in positioning itself for a more effe c t i verole in the PRSP process in the future.

At the most general level, the analyticalapproach of the evaluation is based on thefollowing perspectives:

• In eve ry country, the pro d u c t i on of the PRS Pis part of a process that is both politicaland tech n i ca l ; t h u s , the ev a l u a t i on addre s s e sa dynamic activity, not a static outcome.

• The process is specific to each country, andevaluation judgments should derive from

progress made from the initial conditionsand not on the basis of an outcome specifiedex ante for every country.

• At the time of this evaluation, the PRSPprocess in each country was a work inprogress, even if the PRSP document hadbeen formally presented and approved bythe executive boards of the World Bankand IMF; thus, the ‘outcomes’ are, at thesame time, inputs for subsequent phases inan ongoing process.

The Terms of Reference for the evaluationspecify the following three issues that areessential to understanding the UNDP’s rolein the PRSP process:

• engagement to influence the pro - p o o rcontent of PRSPs,

• cooperation with partners, including civilsociety,

• s u p p o rt to implementation and mon i t o ri n gof the PRSP.

In addition , the Te rms of Refe rence identifythe following categories for analysis whenaddressing the six key outcomes:

• p ro g ress made by the UNDP in its contribution to the PRSP process,

• UNDP strengths and weaknesses (so-called comparative advantage),

• good practices, with emphasis on thosethat might be generalised,

• application of good practices to policy andpractice for future,

• sharing of experience across regions (toenhance the role of the UNDP).

T h e re f o re, this ev a l u a t i on considers adynamic, developing phenomenon in whichthe development actors, national and inter-n a t i on a l ,a re engaged in a continuous learn i n gp ro c e s s . As they learn , that acquired know l e d g ewill feed back into the PRSP process andalter it in ways that cannot be anticipated.Toa great extent, it is this dynamism of thep rocess that makes it so promising and cre a t e sthe potential for fundamental change.

Chapter 2 presents the main findings andl e s s ons from the ev a l u a t i on , ca t e go ri ze dunder strategic findings, findings and lessonsfor the six PRSP outcomes, and findingsrelated to UNDP. Chapter 3 presents con cl u s i on sand recommendations.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

12. The UNDG and the World Bank agreed in a joint memo dated May 5,2003 on the relationship between MDGs andPRSP and the respective roles of the UN System and the BWI.

CHAPTER IIMAIN FINDINGS AND LESSONS

19

While the focus of this evaluation ison the role of the UNDP, this taskcould not be ach i eved without

placing it in the overall context of the PRSP.The interventions by the UNDP are onlyone component of the evolving dynamics of the PRSP process and the role played bythe different partners.13 The evaluation teamwas assisted by desk research conducted on18 PRS P / I - P RSP countries where theUNDP was engaged, as well as by visits to 7countries selected to provide a good mix oftypology of countries and regions.

The evaluation findings elaborated belowshow considerable consistency with the mainconclusions of the World Bank/IMF jointstaff rev i ew of 2002. That rev i ew highlightedthe continued validity of the objectives of the PRSP approach,the improvements beinga ch i eved in the pre p a ra t i on and implementationof both process and con t e n t , and potential forimproved partnerships with countries andd on o r s .The rev i ew also highlighted a numberof weaknesses in poverty data, analysis, andtarget setting and stated “that poverty andsocial impact analysis of major policies andprogrammes, has typically not been under-taken as part of PRSP for reasons to do with national capacity constraints and itsinherent technical difficulties”. Constraintsand areas identified for further improvementare also similar.

In this context it is important to keep inp e r s p e c t i ve the criticisms and con c e rn sexpressed by many partners on the PRSPprocess, especially by civil society groups.14

Areas of concern include the dominant rolesof the IMF and the World Bank in the

PRSP process, and the requirement for staffassessments of the PRSP to be cleared by there s p e c t i ve Board s ,w h i ch undermines countryownership;the quality of broad-based partic-i p a t i on when national stakeholders lack any re a linfluence in formulating and implementingp o l i c i e s , and also lack the necessary ca p a c i t i e sto undertake these tasks; and the absence ofindependent mechanisms to monitor thePRSP process and its impact.

The specific findings of this ev a l u a t i on takethe earlier assessments a step forward in thatt h ey raise some strategic issues and empiri ca llyground many of the PRSP outcomes. Thischapter details findings in three broad areas:those that are strategic to UNDP engagement,such as the link between MDGs and thePRSP process; findings and lessons on thePRSP outcomes; and findings related toorganizational issues.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

13. Some of the points raised here may be found in IDA and IMF, Review of the Poverty Reduction Strategy Paper (PRSP)Approach:Main Findings, Washington, D.C., March 2002.

14. IMF/World Bank, External Comments and Contributions on the Joint Bank/Fund Staff Review of the PRSP Approach,Bilateral Agencies & Multi-lateral Institutions (Vol.1) and Civil Society Organizations and Individual Contributions (Vol.II),January 2002.

BOX 4: CRITIQUES OF PRSP

1 . Co u nt ry gove rn m e nts have little co nt rol over the stru ct u re, co nte nt, and po l i cy p re s c riptions in their PRSPs.

2 . PRSP fra m e wo rks co ntinue to co n f l i ct with local and national pri o rities of reducing pove rty and enco u raging po p u l a rp a rt i c i p ation in the design of national d eve l o p m e nt po l i c i e s.

3 . PRSP processes have been ext remely narrowin substance and part i c i p at i o n . Pa rt i c i p at i o nhas not extended to financial prog ra m m e sand macroe conomic planning.

4 . Initial dra fts of I-PRSP and PRSP we re nott ra n s l ated into local languages until finals t a g e s, thus excluding local input into the fo rm u l ation proce s s.

Source: Report by Focus on the Global South,January 2003

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MDGs AND THE PRSP _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Few PRSPs make an attempt to derivetheir poverty strategies from an analysis ofthe MDGs and there appears to be littlerelationship between PRSPs and MDGs.This is especially true if one takes a broaderview of the MDGs.This is partly a result ofthe fact that the MDGs are extracted fromthe wider context of the MD and are treatedmerely as targets for monitoring.

UNDP COs are not always consistent intheir emphasis on the MDGs as providingthe overarching chapeau for formulation andimplementation of PRSPs. National MDGreports (MDGRs) by COs are quite recent.While some MDGRs are excellent, in mostc o u n t ries the MDGs have been dire c t lyadopted, rather than being adapted througha national con s u l t a t i ve process to make them country specific. In Aze rb a i j a n ,at the initial stages of formulating the second final draft PRSP, no reference wasmade to MDG s . The gove rnment has since taken steps to ensure that the objectivesof the State Pro g ramme on Pove rty Reductionand Econ omic Deve l o pment (SPPRED,the Azerbaijan PRSP) are consistent withthe MDGs and has appointed the PRSPSe c re t a riat as its MDG focal point. It also plans to establish a monitoring unitwithin this secre t a riat to facilitate the process of ensuring linkages between thePRSP and MDGs.

The MDGs played little or no role in theformulation of policy for poverty reductionin Bolivia, although some COs (Ethiopiaand Ta n zania) have taken this up. T h i sresults from the timing of the PRSP, on theone hand,and the formulation of MDGs, onthe other. A future focus of the CO mightbe to foster a discussion that would lead tonationally owned MDGs, which could beintegrated into the policy process. In Mali’sPRSP (Cadre Strategique de Lutte contre la

Pauvrete or CSLP) MDGs are referred to inthe annex only and in a way that does notindicate coherence between the targets of theMDGs and that of the CSLP. Pakistan’sI-PRSP also made no reference to MDGs.

POVERTY ANALYSIS AND PRSP POLICY LINKS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

It appears from the country visits thatPRSPs do not integrate poverty and growth.Whilst there is a coherent growth strategy,most PRSPs do not demonstrate that thestrategy is pro-poor. There is no clear linkbetween the poverty diagnosis and povertyreduction policies. Rather, poverty reductionpolicies tend to be an ‘add-on’ to a generalgrowth strategy. Poverty and growth aret reated separa t e ly and linkages betw e e nthem are weak. Nevertheless, most PRSPsinclude a focus on poverty issues that is a step forw a rd from previous national documents on growth stra t e g i e s . This represents a key entry point for UNDP toinfluence the process and forge the integration of poverty and growth, given itsemphasis on the multidimensional nature ofpoverty and its focus on capacity building.

Through various mechanisms, the UNDPhas attempted to strengthen the povertyfocus of the PRSPs in several countries.PRSPs with a strong poverty reduction focusw e re ones in countries with pre - P RSP policydocuments containing this emphasis (Ethiopiais the best example). The degree of pro-poorcommitment of PRSPs was to an extent afunction of previous policy orientation orpopular pressure to alter that orientation.The UNDP has been successful in puttinge q u a l i ty issues on the agenda in many countries. In some countries, efforts havebeen made to ensure that important issuesare fully addressed in the PRSP, for example,e m p l oyment issues in Aze rbaijan and

I. Strategic Findings

21

p a rt i c i p a t i on and distri b u t i on issues in Bolivia.In Pakistan, issues of income distributionwill be addressed through a new researchorganisation established with the supportof the UNDP. In Mali, the UNDP’s c on t ri b u t i on included part i c i p a t i on in vari o u sthematic working groups, mobilisation ofre s o u rc e s , and coordinating the work oftechnical experts in macroeconomic frame-work. In Bolivia, pro-poor growth receivesgreater attention from the UNDP than frommost of its development partners. It has c on s i s t e n t ly stressed the importance of equityand distribution for poverty reduction. TheUNDP’s influence has been through publicdebate. The UNDP, New York, and theBolivia CO clearly state what the UNDPmeans by pro-poor growth: growth designedsuch that incomes and standard of life of the poor improve faster than those of thenon-poor. No definition however is given inthe I-PRSP or the PRSP for Bolivia or inthe Joint Staff Assessment by the WorldBank and the IMF.

UNDP/UN AND THE BWI _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Lack of clarity of respective roles betweenUNDP/UNCT and the BWI has hamperedthe development of a coherent approach bythe UNCT in engaging in the PRSP processat the country leve l .1 5 The part n e r s h i p sbetween the UNDP, the World Bank, andthe IMF in support of the PRSP process attimes posed problems in practice at thecountry level. Tensions arose from a range ofre a s on s . One of the more com m on re a s ons wass h o rt deadlines to meet the approval sch e d u l e sof the multilateral agencies, which conflictedwith the outcome of broad-based part i c i p a t i onand ownership by a range of stakeholders. Asecond factor, overemphasis on the macro-e c on omic fra m ew o rk , resulted in limitedparticipation by government line ministries,de-emphasis on the multidimensional natureof poverty, and minimised the importance of the MDGs.

Despite the lack of partnership clarity,

in seve ral countries (Ta n za n i a , E t h i o p i a ,and Aze rb a i j a n ) , the UNDP ResidentR e p re s e n t a t i ve/Resident Coordinator (RR / RC )s e i zed opportunities to create con d i t i on sunder which UNDP/UNCT made criticalc on t ri b u t i ons to PRSP formu l a t i on andi m p l e m e n t a t i on . This good practice indica t e swhat UNDP could achieve across countrieswere the relationship with the BWI definedglobally as one of full partnership. In the caseof Mali, it was found that re l a t i on s h i p sbetween donors, lenders, and internationalfinancial institutions (IFIs) had substantiallyi m p roved through the PRSP pro c e s s .Examples of other PRSP countries whereUNDP fostered partnerships with the BWIare Niger, where UNDP partnered with theWo rld Bank in mu l t i - l a t e ral advoca cy effort s ,provision of advisory services, and financialand human expert i s e ; and Ni ca ra g u a ;U g a n d a ;Armenia; Cambodia; and Cameroon.

BOX 5: AN EXAMPLE OF CCA,UNDAF,AND PRSP INTEGRATION: TANZANIA

The UNCT in Tanzania did not undertake a separate CCA but decided, at the suggestion ofthe government, to fully support (staff time andfunding of local resource people) the analyticalphase of the Tanzania Assistance Strategy (TAS).This served as the basis for the PRSP. The UNused the analysis of the causes of povertycontained in the TAS and PRSP as the basis forthe UNDAF. The government had prioritisedthe areas where it needed external support inthe TAS and then in the PRSP, which resulted in the development of a sound frameworkof national strategies and priorities to whichthe UNDAF could respond. The UNDAF became the UN’s response to the TAS and PRSP,identifying areas in the PRSP where the UN had a comparative advantage and couldachieve greater impact by working together to provide support. Within the UNDAF, one ofthe three areas identified as being of highestpriority for joint UN assistance was suppor tto the establishment of a national povertymonitoring system and building capacity toanalyse poverty data across sectors. This wouldfeed into the PRSP process, the budget process,and other national strategy setting processes.Subsequently, four UN agencies designed new programmes of assistance based on theUNDAF that show the links between the PRSP,the UNDAF, and the agencies’ programmes.

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15. The UNDG and the World Bank agreed in a joint memo dated May 5,2003 on the relationship between MDGs andPRSP and the respective roles of the UN S ystem and the BWI.

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UNDP AND THE UNCT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The key stakeholders do not alw ays understand the re l a t i onship between theP RSP and key UN coord i n a t i on mech a n i s m s ,Common Country Assessment (CCA) andUnited Na t i ons Deve l o pment AssistanceFramework (UNDAF). While the UNDGguidelines set out the ideal scenario of a CCAproduced to support PRSP development anda UNDAF to support its implementation, inre a l i ty the timeframes do not coincide.1 6 La ck

of coordination between UN instrumentsand the PRSP undermines the gre a t e s ts t rength that the UN system has, the complementarity among the UN agencies.Most agencies will have close ties with relevant sectoral ministries and other sectoralpartners. This is particularly important ind eveloping com p re h e n s i ve pove rty mon i t o ri n gs ys t e m s .H ow eve r, s ome agency re p re s e n t a t i ve sappear to resist engagement, even when theagency’s headquarters formally supports thePRSP process.

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16. A UNDG Working Group on PRSP, chaired by ILO, is currently preparing a new guidance note for UNCTs on supportto the PRSP process. New CCA/UNDAF guidelines are also under preparation—an effort that is being led by UNDP.

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This section elaborates the findings on thesix PRSP outcomes specifically. Howeverbefore discussing these findings, there arec e rtain qualitative issues that deserve attention and understanding because of thei m p l i ca t i ons they have on the PRSP outcom e s .It is useful to review the evaluation’s findingson capacity constraints on the national side,which hampered the effectiveness of thePRSP process and the quality of the PRSPcontents, as well as some crosscutting issues.

C a p a c i ty issues: Sk i lls in policy formu l a t i on ,policy analysis, budgeting, monitoring, andevaluation were found to be weak among thevarious stakeholders—from line ministries tocivil society organisations. Areas that neededs t rengthening were facilitating com p re h e n s i veresearch into pro-poor growth and buildingca p a c i ty to formulate pro-poor growth stra t e g i e sin re s e a rch centers and civil society institution s .For the PRSP’s real impact, these gaps haveto be addressed more intensively.

The evaluation found that the ability toundertake monitoring of multidimensionalp ove rty in some countries had been con s t ra i n e dby the prevalence of alternative indicatorsand the lack of consensus on appro p riate on e s ,as well as by weak monitoring capacities atdistrict and provincial levels. Capacity fora n a lysis of inform a t i on was found to be lack i n gin some instances. The multitude of surveysbeing undertaken also led to a lack of coordination among different efforts aimedat monitoring poverty. In some countries, itwas found that comprehensive district levelpoverty assessment had not been integratedwithin an overall monitoring system, whichwould affect their sustainability in the long term .

The evaluation found that support forcapacity building took several forms. InA ze rb a i j a n , E t h i o p i a , and Vi e t n a m , t h eUNDP provided support dire c t ly to the PRS PSecretariat (or the institutional equivalent).In Mali and Tanzania, the UNDP played an

important role in supporting the preparationof important documents serving as inputs forthe PRSP. These two examples highlightone of the UNDP’s strengths: It comes tothe PRSP with a long-standing involvementin national policy making. Positioning itself‘upstream’ in the policy process is not new forthe UNDP. Another extremely importantve h i cle for creating the ca p a c i ty for hom e g row npolicies are the Na t i onal Human Deve l o pm e n tR e p o rts (NHDRs) and related UNDP countryreports. These had a substantial influence onthe PRSP process in Pakistan and Bolivia.17

C ro s s - c u t ting issues: If interp reted litera lly,the six PRSP outcomes do not address somekey crosscutting issues integral to povertyreduction: making the impact of the globaleconomy positive for the poor, arresting andreversing the AIDS epidemic, re s o lving con f l i c t sand reconstructing post-conflict countries,p romoting gender equality, i m p roving governance so it is pro-poor, and achievinge nv i ronmental sustainability. The re l a t i on s h i pbetween the six PRSP outcomes and thesec rosscutting issues is that the former are p ro c e s s e swhile the latter are goals.

It is possible that the World Bank and theIMF, because their boards must review theP RSP documents, would place exc e s s i veemphasis on the process outcomes ratherthan on poverty reduction and the associatedc rosscutting go a l s . Fu rt h e r, with the exc e p t i onof gove rn a n c e, mu l t i l a t e ral con d i t i on a l i tydoes not refer to these crosscutting goals. Itis also important for the UNDP to fosterdiscussion of these goals in its governmentand civil society partnerships.

The key vehicle for shifting focus fromP RSP outcomes to goals is the MDG s . It is inthis sense that the PRSP is the ‘action plan’for the MDGs, and the six PRSP outcomesare the necessary conditions for making theaction plan effective. The UNDP has madeimportant contributions to all the basic goals

II. Findings on PRSP Outcomes

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17. The Bolivia country report (see UNDP’s Role in the PRSP Process, Volume II: Country Reports, UNDP, 2003) contains adetailed discussion of the NHDR 2000.

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of pove rty re d u c t i on , and two especially standout. With regard to governance, there is atendency for donors and lenders to treat itrather narrowly as referring to transparencyand accountability. The UNDP is perhaps theonly agency to have produced an analyticald i s c u s s i on of how go vern a n c e might bereformed so that it could be pro-poor. It issurprising that this approach to governance,which is so obviously implied by the PRSPp ri n c i p l e s , has not had greater impact on don o rand lender policy discussions of governance.

Good governance and PRSPs are inter-re l a t e d . In as far as PRS Ps become nation a llyowned and country dri ve n , good gove rnance willbe fostered through democratic participationand accountability. If countries achieve this,it is the responsibility of donors and lendersto adjust and align their assistance to PRSPp o l i c i e s . T h u s , the ca ll for good gove rnance iss i mu l t a n e o u s ly a ca ll for greater com m i t m e n t ,f l e x i b i l i ty, and openness on the part ofdonors and lenders.

While all PRSP documents show a formalcommitment to gender equality, typically thiscommitment is not linked to most of thepolicies in PRSP. Major areas of policy arei m p l i c i t ly treated as if they are gender-neutra l :m a c ro e c on omic measure s ,c redit policy, p u b l i csector investment,and labour market reform,to name the more important. A symptom ofthis om i s s i on is the virtual absence of discussionof gender with regard to the six process outcomes in various evaluations. Just as theUNDP has developed an analysis of pro - p o o rgrowth, an analysis of growth that enhancesgender equality is necessary. E c on omic policiesare not gender-neutral. UNDP can serve thecause of poverty reduction by explaining why and by promoting the economic policiesimplied by this analysis.

Gender awareness during national povertydebates and skills in gendered pove rty analys i swere found to be lacking. Also, even thoughthere was recognition of the complex andmu l t i d i m e n s i onal nature of pove rty, these issuesdid not seem to be adequately addressed duri n gformulation of documents. Understandingthe env i ron m e n t - p ove rty nexus also needed tobe enhanced. Gender disadvantages con s t i t u t ea major component of poverty and requirenot on ly gender sensitive accounts of pove rtybut also explicit measures and multiprongedand gender specific interventions aimed at

dismantling gender discri m i n a t i on in the widerpolicy framework. This is a key area whichcould be addressed jointly by the UNDP andthe UNCT, and specifically by UNDP andUNIFEM,particularly in the area of gender-sensitive poverty analysis and programming.

NATIONAL OWNERSHIP _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Poverty strategies are nationally owned iftheir con c e p t u a l i s a t i on ,d e s i g n ,i m p l e m e n t a t i on ,and monitoring are all the result of a processthat is country driven. The difficulty withownership in practice arises when a donorseeks to maintain some control over thesebasic para m e t e r s . G o vern m e n t ownership needsto be distinguished from national ownership.Government ownership does not indicate orre q u i re that the people be con s u l t e d .H ow eve r,the PRSP process sets a broader agenda:national ownership. National ownership ofdevelopment policy is a political process inwhich a consensus or agreement is reachedbetween the government and civil society. Ifsuch an agreement is reached, the policiesthat are the outcome of the agreement mustbe acceptable to donors and lenders.

A key principle of the PRSP is that itshould be country dri ven and nation a llyowned. In the first instance, policies areselected and designed by the government( c o u n t ry dri ve n ) , then nation a lly ow n e dthrough a process of participation by the civilsociety. National ownership of developmentpolicy is a political process. It should beexpected that this process will be con t e n t i o u s ,because poverty reduction involves one ofthe most conflictual processes faced by anys o c i e ty: the struggle of the poor and pow e rl e s sfor a reallocation of resources in their favour.If this debate achieves some agreement overpolicies,the PRSP principles and philosophyimply that donors and lenders should be p redisposed to support these. Fo s t e ring countrydriven policies implies that donors enter intodialogue with the gove rnment over disagre e m e n t sand must be willing to accept and supportpolicies with which they may not agree.While for every donor and lender there willbe issues on which agreement cannot bereached, ‘donor unilateralism’ contradicts thebasic principles of the PRSP process.

By the nature of their activities,donors a n d

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lenders come into conflict with the pra c t i c eof national ownership, and each institutionshould resolve this conflict constructively. Inthe case of lenders, development assistancenecessarily involves consideration of securingof loans. In some cases, this considerationm ay be in the institution’s mandate. For d o n o r swho provide assistance in grants,the conflictis less, but the national constituencies ofdonors’ agencies require varying degrees ofmonitoring, accountability, and transparencyof their development assistance. Therefore,h ow ever committed a donor or lendingagency might be to national ownership, by itsinstitutional nature, it is constrained in thedegree of national ownership that it canaccept or allow. There will be some policiesthat donor and lender agencies might notaccept even if they are endorsed by a broadparticipatory process.

The UNDP, by its nature and mandate,can approach the process of ownership lessinstitutionally constrained than many of itsd eve l o pment part n e r s .This position of re l a t i veimpartiality in the ownership process givesthe UNDP unique credibility, allowing it toplay a critical mediating role between donorsand lenders and the government and civilsociety—a role that is not possible for donorsand lenders. It creates the potential to bro a d e nthe practice of ownership, especially whencombined with the UN system’s traditionalca p a c i ty-building activities and lon g - s t a n d i n gc ontacts with civil society. A ll of the UNDP’sactivities, and most notably its efforts to c reate national ca p a c i ty for formulating pro-poor policies,take on greater importanceas ownership is broadened.

Fi n d i n g s : B road-based ownership ofPRSPs is lacking. Typically, one part of thegovernment has strong ownership of theP RSP at the expense of others. The pri n c i p l econclusion is that progress has been made onPRSPs being government owned, but not,inmost ca s e s , on being country dri ve n . Pro g re s son inv o lving civil society to broaden nation a lownership has been limited. The key changeimplied by the PRSP is that donors andlenders should no longer make their supportto a country’s development strategy dependon whether or not the external agencies agree with it. The PRSP process rejects theapproach of donorship, in which donors andlenders would sit in the Con s u l t a t i ve Group or

D onor Wo rking Groups and air their com p l a i n t sabout national policies and priorities.

The UNDP has fostered national ow n e r s h i pof the PRSP process by both governmentsand non-government stakeholders. It hasc on t ributed to broadening ownership oradvocating it among donors and programmecountries, but it could do more in fostering anational debate over development strategyand causes of poverty. It has a number ofs t rengths in supporting broader countryownership both by governments and non-government stakeholders and amongst itsc om p a ra t i ve advantages are its perc e i ve di m p a rt i a l i ty and its long-standing com m i t m e n tto pro g ramme countries through projects andprogrammes. In Ethiopia, these advantagesw e re enhanced by an extre m e ly close work i n gre l a t i onship with the gove rn m e n t , w h i chtook the form of the UNDP serving as theintermediary between the government andthe community of donors and lenders. Thisrole was unusual for the UNDP. The successof the COs in Ethiopia,Vi e t n a m , and Ta n za n i ain facilitating donor coordination should beconsidered as models of good practice.

The UNDP’s support for gove rn m e n townership falls into two broad categories:

• ca p a c i ty building, w h i ch includes prov i d i n gaccess to pro-poor views in order to makepolicy ‘homegrown’;

• support to the participation process, e.g.,in Mali and Ta n za n i a , the UNDP played ani m p o rtant role in supporting the formu l a t i onprocess of national strategies for povertyreduction, which served as inputs into the PRSP.

In Ethiopia, Tanzania, and Vietnam, theC on s u l t a t i ve Group includes the gove rn m e n tas co-ch a i r. In Ethiopia and Vi e t n a m ,d on o r sand lenders have been notably flexible, but insome of the other countries, they have beenless so. An example of external influence is thesetting of strict fiscal limits in many countri e s .

The PRSP documents for most of thec o u n t ry case studies appear to be gove rn m e n towned, though not country driven. For somec o u n t ri e s , the framing of the document inv o lve dsubstantial input from external agencies but was predominantly government owned.Ownership by gove rnments is also com p l i ca t e dwhen the involvement of one part of the government is much stronger than that of

26

o t h e r s , as in Pa k i s t a n , Vi e t n a m , and Aze rb a i j a n .In addition to UNDP engagement, many

factors affected the ownership outcome inthe countries visited. Especially importanthas been the past re l a t i onship betw e e ndonors and lenders on the one hand, and the government on the other. In Vietnamand Ethiopia, the governments have placedparamount priority on their ownership of

p ro g rammes and projects since the beginningof bilateral and multilateral partnerships. Inthese countries, it has not been necessary tofoster government ownership but rather tonegotiate its terms. The UNDP’s role hasbeen to facilitate the government’s zeal forownership through capacity building andproviding access to pro-poor policy advice.In the other countries, both the governmentand the donors and lenders are involved in alearning process to bring about a transitionfrom donorship to ownership.

For the other three countries visited, p a rt i c u l a rc i rcumstances impacted the ownership pro c e s ss om ewhat negative ly. In Pa k i s t a n ,d i f fe re n c e samong sections of the government (e.g., theM i n i s t ry of Finance and the Pl a n n i n gC om m i s s i on) have resulted in varying degre e sof commitment to the PRSP process. Theabsence of past experience of developmentassistance in Azerbaijan has meant that thegove rn m e n t’s commitment to ownership lack sa historical context and limits the extent tow h i ch the gove rnment could be ‘in the dri ve r’sseat’. Finally, a change in government inBolivia had major implica t i ons for ow n e r s h i p,since the current administration views thePRSP as owned by its predecessor.

Different examples for fostering countryownership can be found in specific countryconditions. In Bolivia, the UNDP providedstrong support to those participating in theNational Dialogue to allow municipalitiesand NGOs to prepare their representativesfor an effective role. While this type of support represents good practice, in Bolivia ithad little impact on the PRSP itself becauseof the weak link between the participationprocess and the PRSP document.

BOX 6: FOSTERING NATIONAL OWNERSHIP:THE CASE OF PAKISTAN

In Pakistan,the UNDP has helped ensureownership of the content of the PRSP (underformulation) by supporting the development ofnational policies and strategies that have beenincorporated in the document. One example isthe UNDP’s support to the Centre for Researchon Poverty Reduction and Income Distribution(CRPRID).A civil society organization,it is aimedat linking poverty-related research to policymakers and in directing research towards theissues of income distribution and inequality.Development of a homegrown strategy is made possible through linking the HumanCondition Report to policy makers through policy briefings. Members of the UNCT havealso provided support on a sectoral level.The International Labour Organization (ILO) collaborated closely with the Ministry of Labourin developing a National Employment Strategythat was fully incorporated in the ten-yearPerspective Plan and may be incorporated inturn in the full PRSP. The UNDP and UNICEFhave considerable outreach,engaging in locallevel initiatives and working closely with localgovernment. This allows the exploitation ofm a c ro - m i c ro linka g e s, b ringing these ex pe ri e n ce sto policy makers at the provincial and centrallevels.The UNCT will also have the opportunityto support ownership of the PRSP process byintegrating its assistance into the PRSP processt h rough the UNDAF due to be pre p a red in 2003.

BOX 7: AN EXAMPLE OF MULTI-DONOR SUPPORT TO THE PRSP PROCESS: ETHIOPIA

While broad national ownership of the development agenda is a key outcome of the PRSP process,there also needs to be ownership of support to the PRSP process itself. At the same time, donors shouldensure that their approaches are harmonised to reduce burden on national partner organisationsengaged in the process.

In Ethiopia,the CO played the central role in leading the process of donor engagement in the PRSPp rocess and coo rd i n ating donor alignment to the nationally owned MDG. Donor and lender invo l ve m e ntin the PRSP is realised through the Deve l o p m e nt As s i s t a n ce Group (DAG ) . Coo rd i n ation within the donorand lender community helped to streamline working arrangements, in order to harmonise efforts andviews on issues and initiatives pertaining to development cooperation. The DAG Core Group (CG),comprised of 17 bilateral and multilateral representatives, is chaired by the UNDP. As the secretariat,the UNDP also serves as facilitator to the DAG-CG for support of in terventions. A joint donor fund wasestablished and managed by the UNDP for channelling support to the government. The UNDP and theWorld Bank have taken the responsibility for harmonising the different interests of donors and lenders.

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BROAD-BASED PARTICIPATION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The purpose of broad-based participationis to make the PRSP process nationallyowned. National ownership has two aspects:p a rt i c i p a t i on itself (the process) and the impactof participation on the PRSP (outcome).The UNDP’s position on the former is clear:Given the conditions in a country at the timethe PRSP process begins, p a rt i c i p a t i onshould be as broad as is feasible. Equallyclear is the UNDP’s position on the latter:The part i c i p a t i on process should have substantial impact on the PRSP. However,the UNDP’s view on conflicts between theparticipation process and the outcomes inthe PRSP is not clear. Conflicts can arise ins eve ral form s : the legitimacy of the part i c i p a t i onprocess, between the participation processand formal institutions of representations,and over the degree to which the views ofthose consulted enter the PRSP.

Questions of legitimacy derive from thedifficulty of institutionalising broad-basedparticipation. Since this institutionalisationis an internal political process in each country,direct involvement by the UNDP would bei n a p p ro p riate (though the UNDP ca nrespond to requests from civil society andgove rnment for expert advice). E q u a lly, it wouldbe inappropriate for this evaluation to offerre c om m e n d a t i ons on how this might be don e .An example that may be relevant elsewhereis Bolivia, where the legislature passed a lawmandating regular consultation processes.

A second cause of conflict is the tensionbetween formal representative institutionsand PRSP part i c i p a t i on ve h i cl e s . On a genera llevel, it is clear that parliaments should playan expanding role in the PRSP process, andUNDP practice is to facilitate this. Third,and related to the second, is the extent towhich the participation process is purelyc on s u l t a t i ve or that it should have mech a n i s m sto ensure that the views of those consultedaffect policy.

Ach i eving cl a ri ty about part i c i p a t i on beginswith the distinction between con s u l t a t i on andp a rt i c i p a t i on . The former inv o lves gove rn m e n t s(or external agencies with gove rn m e n tendorsement) presenting a set of policies to aselection of civil society groups and seekingreactions to these policies. The reactions are

then collated and affect changes and ‘ f i n e - t u n i n g’of the pre d e t e rmined policy fra m ew o rk .Participation, conversely, means that civilsociety groups are actively involved in theselection and design of policies. This activeinvolvement is consistent with governmentguidance to focus the agenda but allows forgrassroots initiative in policy making. Thep rocess in Bolivia was part i c i p a t o ry in this sense and had a substantial impact onthe allocation of HIPC funds, even though its final impact on the content of PRSP documents was limited.

The UNDP can and does foster part i c i p a t i onthrough access to pro-poor policies, offeringa platform for ‘d i a l o g u e’ , s u p p o rting thelogistics of part i c i p a t i on , and building ca p a c i tyin civil society for policy making. Even morei m p o rtant is the agency’s appro a ch to participation, which is that it is the vehiclefor a national debate on the means and endsof the deve l o pment pro c e s s . In this appro a ch ,the participation process need not result inconsensus (though consensus is desirable).Ra t h e r, p a rt i c i p a t i on should draw civil society,and especially the poor, into the politicalp ro c e s s . In this re g a rd , the UNDP’s lon g - t e rmcommitment to hold dialogues with bothgove rnment and civil society puts it in a stron gposition to help the institutionalisation ofb road-based part i c i p a t i on .This could incl u d eparliamentary involvement, including formala p p roval of the PRSP document. T h e s eprocess enhancements to expand and deepenparticipation would contribute to nationalownership and go a long way in providing astrong legitimacy to the PRSP process. Itwould endorse it as a long-term developmentstrategy and not merely a document to meetthe conditionalities of donors and lenders.The underlying implication for UNDP COsis to take the lead among donors and lendersto define the participation process as one ofnational debate, to assist governments indesigning broader part i c i p a t i on pro c e s s e s ,and to provide civil society with the capacityto make a strong contribution to the debate.

Findings: The principal finding was that,in most countries, the participation processhas substantially contributed to broadening the debate over economic and social policy.H ow eve r, the gap between what has been achieved and what could be achieved is enormous. In this sense, broad-based

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p a rt i c i p a t i on is both the strongest and weakestoutcome of the PRSP process.

B road-based part i c i p a t i on facilitates transforming government ownership of thePRSP into national ownership. It involvesp a rt i c i p a t i on by the civil society in theprocess of developing these drafts. It alsogoes beyond formu l a t i on of the PRSP documents themselves and should be anongoing process supported by the PRSPprocess. It involves regular dialogue betweenthe government and civil society (includingprivate sector) on poverty issues. Part of theprogress toward broad-based participation isdeveloping mechanisms to institutionalisethis dialogue and making it sustainable andincluding the poor so that their views reachthe government.

T h e re is no general formula for determ i n i n gwhether this outcome is being achieved. Itdepends on the history and circumstances ofeach country. The key issue is what progresshas been made towards this outcome, not theparticular form or extent of participation at amoment in time.The necessary dimension ofparticipation is the inclusion of the poor, sothat their views reach the government.

In each case study, each country had a different starting point in the PRSP process.As a result, genuine progress in one countrymight appear as quite limited part i c i p a t i on inanother. There appeared to be no correlationb e tween the depth and breadth of the p a rt i c i p a t i on process and its impact on policies in the PRSP document. One re l a t i ve ly objective indicator of pro g re s stowards this outcome is the extent to whichp a rt i c i p a t i on changed during the con s t ru c t i onof the PRSP compared to the I-PRSP.

In Aze rb a i j a n ,t h e re was limited part i c i p a t i oncompared to countries with a tradition offormal democratic institutions but it was a considerable advance on the pre-PRSP situation. Participation in the I-PRSP wasquite limited but substantially broadened forthe PRSP pro c e s s . Civil society gro u p senjoyed unprecedented involvement in thePRSP, though the nascent private sector’srole was limited.

In Vietnam, it would be more accurate tod e s c ribe the process as one of con s u l t a t i on thatis gradually leading to further participation.In the absence of NGOs and in view of thee l a b o rate political stru c t u re that ch a ra c t e ri s e s

the system in Vi e t n a m , the con s u l t a t i on pro c e s sd i re c t ly re a ched the ru ral com mu n i t i e si n cluding the poor, and this re p resented the country’s first significant independentc on s u l t a t i on pro c e s s ; t h u s , it re p re s e n t e dsubstantial progress.

In Ethiopia, the vehicle of participationwas gove rnment-led PRSP con s u l t a t i on sspanning district, regional,and federal levels.I n cl u s i on of civil society organiza t i on s(CSOs) and NGOs in Ethiopia representeda step forward, though some participants felt that the government exerted excessiveoversight of the dialogue, a complaint madein the other countries visited. Without passing judgement on the validity of suchc ri t i c i s m s , one can con clude that theEthiopian participation process representeda major improvement on the typical practiceof treating poverty reduction strategies as apurely technical exercise.

The part i c i p a t i on process in Mali wasp ro b l e m a t i c , for it appears that re p re s e n t a t i ve sof the poor were not included, nor was parliament, and access to key informationwas not provided to those who did part i c i p a t e .The PRSP participation process followedfrom a series of ad hoc consultations duringthe 1990s. Participants and observers of the process do not agree on whether it re p resented pro g ress com p a red to those previous consultations.

Pa k i s t a n ,B o l i v i a , and Ta n zania have form a lre p re s e n t a t i ve institutions and mu l t i p a rtys ys t e m s ,a n d , at various times, p a rliaments haveplayed an important role in politics. Progresswas made in Pakistan to involve civil societyand the private sector, but consultation andinclusion of the new district governmentswas highly vari a b l e . On a more positive note,the consultation process at the central levelcontributed to developing poverty indicators.However, as in Mali, effective involvementby the private sector was notably absent.

By any com p a ri s on , p a rt i c i p a t i on inBolivia was broad, deep, and qualitativelyd i f fe rent from that in the other seven countri e s .Initiated for the HIPC process and con t i n u i n gt h rough the con s t ru c t i on of the PRS P,the National Dialogue was built up fromcommunity meetings to the regional leveland finally to the centre. The dialoguei n cluded indigenous groups histori ca llye xcluded from the political process and

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assumed a dynamic of its own. Further, andof central importance, of the seven countries,only Bolivia has institutionalised the non-parliamentary participation process througha law passed by the Congress. However, thisdeep and broad participation may have hadless impact on the policies in the PRSP in Bolivia than in those countries in whichparticipation was narrower and shallower.

The history and current conditions in eachc o u n t ry stron g ly affected pro g ress tow a rds bro a d-based participation and national ownership,since, in each country, participation occurredin a broader social and political context.Contextual factors affecting the outcome ineach country were:

• Az er ba i j a n : absence of a democratic tra d i t i on ,recent creation of the country with no h i s t o ry of a planning fra m ew o rk aft e rindependence, weak private sector;

• B o l iv i a : l ong history of popular mobilisation ,a c t i ve formal institutions of re p re s e n t a t i on ,vigorous civil society including business,trade unions and peasant organisations;

• E t h i o p i a : c on f l i c t - a f fe c t e d , re c e n t ly establishedformal institutions of representation;

• Mali: high aid dependence that fostersgove rnment inert i a , weak tech n i cal ca p a c i ty;

• Pa k i s ta n :weak dialogue between policy makersand civil society, policy constrained byc on d i t i onalities on deve l o pment assistance;

• Tanzania: aid dependence, legacy of a onep a rty political sys t e m , weak dialogue betw e e nprivate sector and the governments of themainland and Zanzibar;

• Vietnam: one party system in a unitarystate, mitigated by a political tradition ofconsultation and consensus building.

Progress toward the outcome should notbe interpreted as essentially negative. On the contrary, the progress achieved, albeitsmall by some judgements, in all countries re p resents a substantial change from the statusq u o. Fu t u re pro g ress re q u i res institution a l i s i n gparticipation, as has been done in Bolivia.How this will be done in each country will bea nationally owned process that outsiders canfoster but not guide.

In Bolivia,Mali,Ethiopia,and Azerbaijan,the UNDP made major contributions to theparticipation and consultation process. Thesubstantial contribution made by the UNDPin Bolivia can largely be attributed to two

f a c t o r s : f i r s t , the UNDP treated the process asan end in itself, not as deri v a t i ve from the PRS Pprocess; and second, Bolivia has a long (ando ften violent) history of popular mobilisation .

In the seven countries studied, the UNDPprimarily financed some of the activitieswithin the participation process,such as localor national level roundtables and other discussion fora, but more importantly, it hasengaged in the design of the participationprocess. Good practices in this respect havebeen to help governments bring together thedifferent players in the participation processand identify appropriate strategies for under-taking it in a coordinated and comprehensivemanner. It has also been successful in helpingcivil society participate more effectively.

In other PRSP countries, UNDP fundedconsultations with civil society on the PRSP

BOX 8: ADVOCACY FOR BROAD-BASEDPARTICIPATION: THE CASE OF BOLIVIA

The pri m a ry vehicle for broad-based part i c i p at i o nin Bolivia was the National Dialogue of 2000,which received strong support from the UNDP.It represented a historic event in Bolivia and alaw has been passed by Congress establishingNational Dialogues on a regular basis. Theimportance of the National Dialogue goes farbeyond its relationship to the PRSP.

The First National Dialogue,‘Bolivia Towards the XXI Century’, took place in 1997,bringingtogether representatives from the central government, the most important organisedgroups of the civil society, and political parties.The timing of this dialogue was prompted bythe need to meet HIPC conditionality. In 1998,Bolivia obtained its first relief from the HIPC-Id e b t .The re l i e f, in net pre s e nt va l u e, was $US 448million,distributed over 20 years (equivalentto 10% of the country’s debt in 1981).

A new participatory process began with theSecond National Dialogue,‘Economic Growthand Fight Against Poverty’, in early 2000. Thefirst steps occurred at the municipal level,followed by the organisation of participatoryround tables at the depart m e ntal leve l , to finallyachieve the ‘National Dialogue 2000’. TheUNDP’s participation was important for the success of the process. Drawing on the conclusions of the national Human Deve l o p m e n tReport 2000,the UNDP called for strengtheninga ‘deliberative democracy’, through popular participation, both local and national. Duringthe dialogue, the UNDP provided technicalassistance on the design of the participatoryp rocesses and facilitated the allocation of re s o u rce sfrom the international agencies to enhancethese processes by use of a ‘basket fund’.

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(Guyana); helped in promoting consensusbuilding on the PRSP process by incorp o ra t i n gcivil society groups and political part i e s( H on d u ra s ) ; facilitated policy dialoguebetween civil society and government withinthe PRSP framework, especially at the locall evel with NGOs, the private sector, mu n i c i p a la u t h o rities and com mu n i ty based organiza t i on s(Nicaragua); strengthened NGO and civilsociety capacities for effective participationin and negotiation with the government onthe PRSP formulation process (Niger andZa m b i a ) ; and provided tech n i cal assistance toi m p rove both the substance of the I-PRSP andthe process of public participation (Georgia).

Fo s t e ring broad-based part i c i p a t i on is the weakest of the six outcomes for theUNDP, yet it is one of its natural strengths—it has considerable outreach that can beutilised in the participation process. TheUNDP can foster ongoing dialogue betweenthe government and both the civil societyand the private sector on poverty issues. Itcan support mechanisms to institutionalisethis dialogue and make it sustainable andalso design the part i c i p a t i on pro c e s s .Capacity building must support ownershipincluding the development of homegrown,pro-poor policies.

MULTIDIMENSIONAL NATURE OF POVERTY & PRO-POOR GROWTH _ _ _ _ _ _ _

The multidimensional nature of povertyand the pro-poor content of growth are soi n t e g ra lly related that they should be con s i d e re dt o g e t h e r. To judge whether growth is pro - p o o r,one must have a view on the nature of pove rty.

Sustained economic growth is necessary toreduce poverty, but such growth will reducepoverty at a faster pace if it is pro-poor andfocused, for instance, in rural areas wheremost of the poor live. This, in turn, mayre q u i re additional public expenditure forexpanding ru ral infra s t ru c t u re, e d u ca t i on ,and health services. The policy frameworkfor macroeconomic stability will thus have tobe harm onised with policies that will stimu l a t ethe pace of economic growth as well as withpolicies and pro g rammes for pove rty re d u c t i on .Finally, vigorous efforts will have to be madeto empower the poor through the promotionof pro-poor organisations so that they can

a c t i ve ly participate in identifying their pro b l e m sand pri o rities and in the deve l o pm e n tprocess as a whole.

The instru c t i on that PRS Ps should addre s sthe multidimensional nature of poverty iscentral to the construction of an effectivep ove rty re d u c t i on pro g ramme in all countri e s .Pove rty analysis is tra n s f o rmed from a tech n i ca lexercise to one in which the population, ande s p e c i a lly the poor, p a rticipate active ly.Addressing the multidimensional nature ofpoverty thus becomes a process in whichpolicy and participation are integrated top roduce a nation a lly owned pove rty re d u c t i onprogramme and nationally owned MDGs.

This appro a ch broadens the scope forUNDP engagement in the PRSP process.The UNDP lacks the resources to funddetailed and extensive household surveys formany countries. These surveys, as importantas they are, are but one input required foridentifying the multidimensional characterof poverty. More important are processes inw h i ch the UNDP has long-standing expert i s e :capacity building in civil society to fosterindependent analysis of poverty; engagementin civil society to facilitate activating the voicesof the poor; and national Human Deve l o pm e n tR e p o rt s , n ow to be complemented byn a t i onal re p o rts on MDG pro g re s s , to prov i d ea poverty analysis framework.

E xc e s s i ve emphasis on income pove rtych a ra c t e rises most PRSP documents, re f l e c t i n ga continuation of the view that nationalplanning and poverty reduction are technicalexercises in which the poor have a passiverole as recipients of benefits. Conversely, thepoverty reduction strategy promoted by theUNDP over a long period of time calls forthe poor to define and seize upon benefits,rather than await their arrival. This is theessence of the UNDP’s approach to poverty,and it must be vigorously advocated.

The UNDP’s effort to broaden theapproach to poverty is an ongoing, dynamicprocess, although it is not yet fully reflectedin the current PRSPs. The main task forUNDP COs is to convey the message thatreducing poverty requires that the PRSP bebased on an analysis of the mu l t i d i m e n s i on a ln a t u re of pove rty.T h a t , in turn ,d ri ves the designof economic policies and the monitoring ofprogress in poverty reduction.

By the UNDP’s definition ,p ro-poor growt h

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occurs when the poor, h ow ever defined and measured, benefit disproportionately.18

Pro-poor growth policies may re q u i rethe creation of ‘fiscal space’ for pro-poorexpenditures. This definition of pro-poorgrowth has been and is in the process ofbeing made con c rete by a long series of UNDPpolicy research, most notable is the joint programme of the Bureau for DevelopmentPo l i cy (BDP) and the Regional Bureau for Asiaand the Pacific on pro-poor macro policies,which builds on the Knowledge Network forPoverty Reduction (1996-97) and the recentstudy of 15 countries by the Regional Bureaufor Latin America and the Caribbean.

A key part of pro-poor growth will have tobe policies to raise agricultural productivityand promote part i c i p a t o ry ru ral deve l o pm e n t ,involving a much wider range of activities,which can be successfully undertaken onlythrough decentralised local institutions andcivil society organisation s .This broader appro a chto pro-poor growth lays the basis for theUNDP to integrate ownership, participation,and capacity building. It aids countries indeveloping the capacity to construct home-grown, country driven strategies based on achoice of pro-poor policies, which becomepart of the participatory national debate overthe goals and framework for development.The national debate, in turn, contributes tonational ownership of PRSPs.

It is generally recognised that economicgrowth is necessary but not sufficient for sustainable poverty reduction and humand eve l o pm e n t . For econ omic growth to effe c t i ve lyt ranslate into pove rty re d u c t i on , it must be pro -poor, rapid enough to improve the absolutecondition of the poor, and equitable so that itimproves the relative position of the poor.19

This is true for income poverty or broadermultidimensional definitions of poverty suchas human poverty. The UNDP guidelines onengagement with the PRSP note that “E q u i tyis good for the poor because it is good forg rowth and for distributing its benefits acro s sthe population, including the poor. Highi n e q u a l i ty inhibits growt h ,c on t ributes to poorpolicy-making and delays pro-poor reforms.”

Fi n d i n g s : Treatment of pove rty in PRS Ps ins ome countries is too narrow, ove r - e m ph a s i s i n gthe income dimension, rather than encom-passing a variety of other aspects, which arecountry and community specific. Progress ondeepening and making this kind of analysis andunderstanding of poverty has been limited.

Long-standing UNDP work on the natureof poverty recognises that it is a complex andmu l t i d i m e n s i onal ph e n om e n on . Pove rty doesnot only relate to issues of income but also toa variety of other dimensions. To effectivelyreduce pove rty, one must understand its manydimensions and the priorities among them.One must also distinguish between meansand ends and examine linkages between thedimensions. For example, when addressingnarrow income poverty, education is often ameans to reduce poverty. When addressingmu l t i d i m e n s i onal pove rty, e d u ca t i on becom e san end in itself, allowing people greateropportunities and choices to lead a full life.In the 1997 HDR, the UNDP introducedthe concept of ‘human poverty’ to capture itsa p p ro a ch to mu l t i d i m e n s i onal pove rty. H u m a np ove rty focuses on the capabilities people haveto function in a social setting. These aspects ofp ove rty are country specific and are identifiedthrough listening to the poor themselves.

As observed in the countries visited, thepro-poor content of PRSPs increased whenthe UNDP focused on fostering nationaldiscussions on the nature of poverty, via itswork on monitoring MDGs and the socialcosts of poverty, and facilitating giving voiceto the poor. Yet, COs have made insufficientuse of pro-poor analytical work done inHeadquarters. A key task for UNDP COs isto provide governments and civil society withpolicy perspectives that are more pro-poor,including monetary, fiscal, and exchange ratepolicies, and to ensure these perspectives arefed into their dialogue on PRSPs. At a formal level, the UNDP supported efforts togenerate a more multidimensional analysis ofpoverty in all the countries visited. This wass t ri k i n g ly effe c t i ve in Bolivia, as a result of theinfluential impact of the last two NationalHDRs, written by a team composed almost

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18. See draft Policy Note on the Role of Economic Policies in Poverty Reduction, April 2002, p. 2, which states, “Such a strategy implies…greater equity at the start of the growth process (such as through land reform or universalisingbasic education) or by decreasing inequality over time (such as through pushing up wages by generating widespre a demployment among low-skilled workers).”

19. McKinley,Terry. Economic Policies and Poverty Reduction:Macr oeconomics, Restructuring and Redistribution – the Basisfor a UNDP Guidance Note (Draft Document). UNDP, BDP. March 2001.

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entirely of nationals. Monitoring of MDGsalso played an important part in raisinga w a reness of the com p l e x i ty of pove rty,especially in Vietnam, where the NationalHDR (2001) provided a valuable frameworkfor the PRSP. Vietnam has also succeeded in establishing more realistic and ambitiousNa t i onal MDG s ,w h i ch have gre a t ly facilitatedthe formu l a t i on and implementation of the comprehensive PRSP. Support to non-government research institutions for povertyre s e a rch , as in Pa k i s t a n , can have an extre m e lyp o s i t i ve role in influencing gove rn m e n tthinking. Other examples of PRSP countriesw h e re UNDP con t ributed to bringing amu l t i - d i m e n s i onal perspective of pove rty,include Burkina Faso, where it organized aRound Table on Governance and producedthe NHDR on Gove rnance (2000); H on d u ra sand Zambia, where UNDP also providedassistance for the government’s governanceefforts; Mozambique, where in collaborationwith ILO, it undert o ok a study on gender andpoverty; and Nicaragua, where it promotedlinkages between poverty, governance andthe environment.

COHERENCE WITH LONG-TERM STRAT E GY _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Few would disagree with the desire dPRSP outcome that the document should becoherent with respect to other longer-termnational policies and plans. However, this isa rather static view of policy, which may notaccommodate the realities of the politicalprocess in many countries.

A problem not anticipated, at least explicitly,in documents about the PRSP is its statuswith regard to governments. On the onehand,a requirement of PRSPs is that they begovernment owned; on the other hand, onefinds no explicit discussion of their statuswhen governments change (as in Bolivia).One can argue that if the PRSP arises from aprocess of broad consultation, its legitimacymay transcend any particular government.However, the reality is that few participationprocesses have been sufficiently broad-basedto qualify as bestowing trans-governmentlegitimacy on the PRSP.

While a change of gove rnment may pre s e n ta potential problem for BWI, as it is the basis for their mu l t i year lending pro g ra m m e s ,it poses no particular difficulty for the

UNDP, because the agency’s engagement ina country is not dependent upon the PRSP.On the contrary, if a government wishes tosubstantially revise its PRSP, the UNDP canassist it in designing pro-poor policies.A g a i n , the UNDP’s institutional natureallows it the flexibility to deal with whatmight be a problem for donors and lenders.

A second ch a llenge is the issue of coh e re n c eof PRSPs with MDGs, especially if PRSPsa re to be viewed as the action plan for MDG s .More analytical work is needed to ensurethat the policies and interventions proposedin the PRSP contribute to achieving theM DG s . A simple assumption is that ifP RS Ps are mon i t o red on the basis ofMDGs, then policies will automatically bealigned to achieving the latter. While thismay be true to some extent, a more consciousand concerted effort is needed to generate anexplicit statement on the role of the PRSP inachieving the MDGs.

Fi n d i n g s : Whilst there is coh e rence betw e e nthe PRSP and other policy documents in term sof poverty emphasis, this is not necessarily apositive outcome when the latter have littlep ro-poor con t e n t . This again presents apotentially useful role for UNDP. The weakaspect of coherence was not only in fiscallinks to Mid-term Expenditure Proposals,Public Investment Proposals, and the annualfiscal budget, but more importantly, PRSPsneed to be integrated in the larger planningframework that would include sectoral andthematic programmes. A major flaw in manyPRSPs is the lack of a chapter or sectionexplaining how the PRSP fits into the planningframework (a major issue in Azerbaijan andPakistan). Further, as discussed earlier, moreneeds to be done to link PRS Ps with the MDG s .

Coherence between the PRSP and anylong-term national planning instruments isessential if the PRSP is to build towardsachieving the longer-term goals and visions.The goals of such lon g - t e rm planningi n s t ruments should coincide with theM DGs—either the global ones or appro p ri a t ere g i onal or national on e s .The existence of suchplanning tools also makes the developmentof the PRSP easier. By focussing the plans onthe MDG s , the PRSP will become a pow e rf u ltool for achieving these goals. The UNDGGuidance Note to UNCTs on the PRSPhighlights the role of the UNCT in ensuringthat “the MDGs are substantively addressedin the PRSP both sectora lly and cro s s -

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sectorally and that policies are monitoredand assessed in terms of their impact onthe MDGs”.

Seve ral of the countries studied have stron gplanning frameworks, including long-termnational development planning instruments.In two of these countries (Ethiopia andTanzania), the PRSP has been developedexplicitly within the framework of a nationalplan. In other cases, it has not, and parallelplanning frameworks have been developed.The Ta n zania Mainland Deve l o pment Vi s i on2025 and Za n z i b a r’s Vi s i on 2020 are expre s s i on sof national aspirations for a society free fromabject pove rty and a country of middl e - i n c om estatus by the year 2025. The PRSP has beendeveloped specifically within the context ofthese stra t e g i e s . Pakistan has a planning fra m e-w o rk , but it is unclear how the existing I-PRS Pfits into it or how the forthcoming PRSPwill do so. This is partly due to institutionalissues described in relation to Outcome 1,because ownership is in the Ministry ofFinance, not in the Planning Commission.

In Vi e t n a m , the gove rnment has announceda ten-year So c i o - E c on omic Deve l o pm e n tSt ra t e gy (2001-2010) and the five - year comprehensive PRSP effectively translatesthis ten-year strategy into an action plan,thus ensuring coherence between the two. Incontrast,in Azerbaijan and Mali there are nol on g - t e rm national planning instru m e n t s .Azerbaijan abandoned the five- and ten-yearplans inherited from the central planningsystem soon after the start of the transitionto a market economy. These have not beenreplaced with other lon g e r - t e rm nation a lplanning instruments appropriate to the newe c on omic env i ron m e n t . The PRSP (SPPRED )notes, however, “Care has also been taken toe n s u re that the objectives of the SPPRED arec onsistent with the Millennium Deve l o pm e n tGoals as developed in the United NationsMillennium Declaration”. The governmentrecognises the need to develop a longer-termplanning tool that will act as a framework fordeveloping successive PRSPs. It has statedthat the MDGs will be used as the referencefor developing a lon g - t e rm Sustainable HumanDevelopment Programme for the country.

The UN sys t e m , and the donor com mu n i tyas a whole, has yet to fully engage the government of Azerbaijan on the issue of its commitment to the MDG s . Som eengagement has taken place, reflected by theassurance of the PRSP Secretariat and the

Minister of Economic Development to fulfilthis commitment. The government has alsoappointed the PRSP Secretariat as its MDGfocal point. The UNDP is fully aware of theproblem of agreeing to indicators and hasproposed the establishment of a workinggroup as part of the process of doing so. Inaddition, agreement has been reached onestablishing a monitoring unit within theP RSP Se c re t a riat that would facilitate linkingthe PRSP and the MDGs.

In Mali, the PRSP (CSLP) is for five ye a r s ,rather than the standard three, and is viewedas medium-term. The lack of a long-termo f f i c i a lly institutionalised planning fra m ew o rkis a cause of concern, because the lack ofi n s t i t u t i on a l i s a t i on can make CSLP pro c e s s e srather ephemeral. At the same time, the verylack of a previous planning framework pavedthe way for the CSLP to be considered theonly strategic government framework to beused by intern a t i onal partners in their supportto the country. In other words, the lack ofinstitutionalised instruments makes it easierfor the CSLP to have a prominent place inthe overall government strategy. There areboth opportunities and constraints for thesuccess of the CSLP process due to the lackof a solid pro g ramme policy fra m ew o rk . It mayprove difficult to translate general strategico ri e n t a t i ons into specific policy measures andaction plans. In Uganda, UNDP supportedthe preparation and dissemination of Vision2025 and the Uganda Participatory PovertyAssessment Pro j e c t ,w h i ch fed into the Pove rtyE ra d i ca t i on Ac t i on Plan (PE A P ) / P RS Pp ro c e s s . UNDP together with the Wo rld Bankassisted the Government of Zambia in thep rocess of establishing the Na t i onal Long Te rmVision;and in Cambodia, the national PRSPwas based on the medium term deve l o pment plan( So c i o - E c on omic Deve l o pment Plan 2001-2005).

DEVELOPMENT PARTNERSHIPS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The UNDP participates in three types ofpartnerships: with donors and lenders, withgovernments, and with civil society. For anydonor, lender, or UN agency, partnerships area vehicle for increasing the coordination ande f fe c t i veness of assistance. T h ey are alsoessential in the achievement of outcomes. Atthe same time, they also pose a potential riskto an institution’s independent identity. The

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UNDP’s engagement in each country mustbalance these two aspects of part n e r s h i p. Wi t hfew exc e p t i on s , the most important part n e r s h i pfor UNDP in this category is that with theBW I , and especially the Wo rld Bank. B e ca u s eof the pivotal role of this partnership, it wastreated at the outset of this chapter.

It remains to consider partnerships withgovernment and civil society, which are theU N D P’s demon s t rated stre n g t h . This stre n g t harises from the organisation’s long presenceand inv o lvement in countries and its tra d i t i on a lc ommitment to national ow n e r s h i p. T h epotential arising from the UNDP’s historyof strong government and civil society part-nerships has not in all cases been realised.

Fi n d i n g s : The UNDP is engaged in effective partnerships with a broad range ofstakeholders in the PRSP process, and itplays a major role in the UN RC system.However, more can be done by UNDP inleading the CCA and UNDAF processes insupport of the PRSP.

The mission found that the link between

the UNDAF and the PRSP was insufficient ins ome of the case-study countri e s . In addition ,the UNDP needed to foster ownership of thePRSP process in the UN agencies and ensuretheir full understanding and their potential ro l ein it. A coordinated UN country con t ri b u t i onwould strengthen the UNDP’s role in thePRSP process.

Pa rtnerships are important as they prom o t eb road ownership of policies and facilitate moree f fe c t i ve part i c i p a t i on and implementation inthe deve l o pment pro c e s s .T h ey can con t ri b u t eto more effe c t i ve use of deve l o pment assistanceand better division of labour based on com p a r-a t i ve advantage. A key issue, h ow eve r, c on c e rn sthe sustainability of partnerships made duri n gthe PRSP construction and the opportunityfor them to continue during implementation .

In most of the countries studied, t h ei m p o rtance of the UNDP’s role in coord i n a t i onhas been raised, particularly its role as abridge between governments and the donorc om mu n i ty. As a neutral and usually tru s t e dp a rtner to both the gove rnment and the don o rcommunity, the UNDP is well positioned to fill this function. In addition to donorcoordination, the UNDP has fostered aidc o o rd i n a t i on . It has facilitated the integra t i onof external assistance into national strategiesand programmes, through supporting thegove rn m e n t - d onor re l a t i on s h i p, i n cl u d i n gaid coord i n a t i on ‘ ro u n d t a b l e s ’ . In seve ra lcase-study countries, most notably Bolivia,little progress has been made on donor andlender coordination. The UNDP was able toplay a special role in addressing sensitiveissues in which other donors did not wish toe n g a g e . C o o rd i n a t i on also manifested itself inthe harm on i s a t i on of donor view s , enabling themto engage with the gove rnment with one voiceand so more effectively advocate policies.

The UNDP’s leadership role among thed onors and lenders manifested itself in d i f fe rent ways.In Ta n za n i a , the UNDP ch a i r sthe Donor Assistance Group and acts as itss e c re t a ri a t . In Ethiopia, it chairs the Deve l o pm e n tAssistance Group, serving as its secretariat,and it also chairs the Consultative Group. InVietnam, UNDP hosts a monthly DonorForum that discusses pressing developmentissues. In Mali, the RR/UN RC is the chairand spokesperson of the donors’ committee.The leadership and coordination activities ofthe UNDP in Ethiopia and Vietnam are asalient example of ‘good practice’. There isu n realised potential for the UNDP to play this

BOX 9: ENHANCING PARTNERSHIPS:THE EXAMPLE OF MALI

In Mali,partnerships were built prior to theintroduction of the PRSP process. UNDP support for the formulation of the SNLP(National Strategy for the Fight against Poverty)and the National Outlook Study: Mali 2025,entailed the highly participatory process of alarge number of stakeholders. The UNDP builtp a rtnerships during and after the fo rm u l ation ofthe two sector-wide appro a c h e s. S u b s e q u e nt l y,four UN agencies, including the UNDP, togetherwith Norway and Luxemburg are supporting ag ove rn m e nt pro j e ct (PISE) to enco u rage wo m e n’seducation within the PRODEC (ProgrammeDecennal de Developpment de l’education) Ten Year Education Programme framework.This component has been included in the final CSLP.

The National Action Prog ramme for Employ m e ntGeneration and Poverty Reduction (NPAE/PA)was finalised in partnership between ILO/UNDPand these two organisations advocated theinclusion of the priority components in thePRSP (CSLP). The UNDP played a key role as anadvisor and coordinator of technical assistancein the elaboration of CSLP by establishing closepartnerships with the EU,ILO, the FrenchCooperation,the Atomic Energy Committee,and the IFIs. Si m i l a rl y, the UNDP played a leadingrole in the completion of the CCA and solicitedthe co l l a bo ration of the Wo rld Ba n k , the IMF, a n dthe CSLP Coordinator. The UNDAF process wasalso launched with the co l l a bo ration of the BW I .

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type of leadership role in other countri e s . T h eUNDP has also played a role in stre n g t h e n i n gpartnerships of which it is not a part. InAzerbaijan and Bolivia, it has exploited itsgenerally acknowledged strength as a neutraland trusted partner to both the gove rnment andthe civil society to bring these groups togetherfor dialogue. It has also supported NGOs andother CSOs in engaging more effe c t i ve ly withthe government in the PRSP process.

POVERTY MONITORING CAPACITY_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The issue of monitoring can be adressedon at least two leve l s .The PRSP re q u i res cl o s eand effective monitoring, which is primarilythe responsibility of the government. TheUNDP can and does play an important rolein this by ensuring that strong governmentcapacities are built up to monitor pove rty in itsbroader context.These monitoring capacitieshave to be an integral part of those requiredto monitor MDGs.

The UNDP engages in discussions andc onsensus building over methodology for pove rtyindicators. Identification of the appropriatei n d i cators for mon i t o ring the many dimension sof poverty is a vital step in developing thepoverty monitoring system and one thatre q u i res consensus building among stakeholders,including external agencies. Once selected,efforts should ensure that the methodologiesare appropriate and cost effective. Povertym on i t o ring that addresses the many dimension sof poverty is an obvious area for UN systemcollaboration and partnership but especiallyin the area of indicators.

If monitoring is defined as a choice ofindicators based on technical considerations,measurement by a specialised agency usingthose indica t o r s , and com p a ri s on of themeasurements to pre-established goals (e.g.,the internationally established MDGs), thenthe UNDP may face the foll owing con s t ra i n t s :shortage of staff with technical expertise inp ove rty measurement and lack of re s o u rces tofund measurement surveys in a large numberof countries (though the UNDP has prov i d e dimportant support to monitoring).20

As argued earl i e r, the UNDP can help bro a d e nthe concept and practice of mon i t o ring in theinterest of effective poverty reduction. The

UNDP can foster broad-based part i c i p a t i on ini d e n t i f ying pove rty (its mu l t i d i m e n s i on a l i ty ) ,finding appro p riate indicators (its measure m e n t ) ,and mon i t o ring of policy impact. In doing so,it expands its role and con t ributes to nation a lownership of poverty reduction programmes.

At a different, though perhaps equallyi m p o rtant leve l , the UNDP also has a potential role to play in strengthening independent mon i t o ring and ev a l u a t i oncapacities that are in line with the broadera p p ro a ches to part i c i p a t i on and tra n s p a re n cy.Su ch capacities have to reside in civil society sothat an independent assessment of perf o rm a n c ecan be made and so that gove rnment depart m e n t sand programmes can be held accountable tothe goals set in the PRSP. The UNDP isp ro b a b ly the best-placed intern a t i onal agencyto foster independent assessment capacities,which is also an essential part of the overallo b j e c t i ves of improved tra n s p a re n cy andgood governance.

Findings: Institutional arrangements andcapacities for pove rty mon i t o ring re q u i red forPRSPs are inadequate. Poverty monitoringrequires effective institutional structure anda p p ro p riate ca p a c i ty as well as strong gro u n d i n gin different techniques and methodologiesi nv o lve d . M on i t o ring pro g ress tow a rds pove rtyreduction represents the greatest unrealisedopportunity within the PRSP process for theUNDP. As countries are in the initial stagesof monitoring, the scope and nature of theprocess has yet to be clarified; donors andlenders have yet to ‘stake out their claims’ inthe monitoring area. Conversely, MDGs andHDR work over many years gives theUNDP a clear ‘comparative advantage’.

In genera l , the UNDP’s support for pove rtymonitoring covers a range of actions linkedto poverty reduction strategies and PRSPsand includes capacity development, povertyassessments, participatory monitoring andev a l u a t i on and work on Na t i onal HDRs. T h e s easpects are illustrated in the case studiesundertaken by the mission. (See Evaluationof UNDP’s Role in the PRSP Process, VolumeII: Country Reports, UNDP, 2003.)

It is essential to set clear goals that are ano u t c ome of broad part i c i p a t i on and reflect themu l t i d i m e n s i onal nature of pove rty. M on i t o ri n gprogress towards these goals is essential if theP RSP process is to be effe c t i ve, since stra t e g i e swill need to be amended in light of lessons

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

20. See UNDP Overcoming Human Poverty,2000, p.105, which notes,“Most poverty monitoring systems continue to relyon income poverty measures…”

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learned. Participation sets the benchmarksthat facilitate the identification of effectiveor sub-optimal policies and interventions.Clear goals and mon i t o ring instruments will alsoi m p rove the tra n s p a re n cy of the PRSP pro c e s s ,especially in the allocation of resources.

It should be noted that the PRSP in Vi e t n a mis quite recent and the PRSP in Bolivia isunder revision, so monitoring arrangementshave not been fully established. Among theother case-study countries, UNDP supportto monitoring has varied significantly, butthe agency has addressed a range of majorissues. It has intervened in issues related tothe organisational arrangements for povertym on i t o ri n g. In seve ral countries (Aze rb a i j a n ,Tanzania, and Pakistan),the UNDP assistedin establishing a new unit for monitoring ors t rengthened existing organisations within thegovernment. However, this has not alwayso c c u r red in the context of clear organisation a larrangements for monitoring (i.e., Pakistan)w h e re there has been greater support for mon i t o ring by auton omous re s e a rchorganisations. UNDP’s support to povertymonitoring took different forms in othercountries: In Armenia, it provided assistanceto the gove rnment in establishing and operating a monitoring and analysis systemas an important component of the PRSP; inBurkina Faso, it ensured the inclusion of specific indicators on gove rnance in the list ofa g reed indicators retained by the “ Ob s e rv a t o i rede la Pauvrete” for monitoring poverty trendsas they relate to PRS P, U N DAF andMDGs; and in Georgia, it assisted the StateDepartment of Statistics in preparation anddissemination of two important surveys onLabour Market and Child Labour, both ofwhich would lay the groundwork for more

objective efforts in poverty monitoring.The ultimate responsibility for monitoring

is with the gove rn m e n t , e s p e c i a lly in a representative society, and the government isthe most important user of the informationto develop pro-poor policies. However, therole of civil society to oversee this process ise s s e n t i a l . Tra cking and evaluating pro g ress mu s tbe independently undertaken within an agre e d -u p on sys t e m . St rengthening capacities in bothgovernment and civil society for monitoringand evaluation is an area of need that theUNDP/UNCT can address together.

T h e re is a con t ra d i c t i on between the pri n c i p l eof national ownership of PRSPs and the factthat mon i t o ring is seen as pri n c i p a lly to re p o rtto external agencies. With its emphasis onnationally owned MDGs, the UNDP wouldbe the logical agency to raise this anom a ly andpress for PRSP reports aimed at nationalaudiences, which would secondarily be usedas progress reports to donors and lenders.

There has been less direct support forcapacity building for poverty monitoring.Some of this has been aimed at stre n g t h e n i n gcapacities for implementing specific surveys.Other support has been limited to financingsurveys that involved little capacity building.Other areas of potential UNDP/UN Systems u p p o rt are important for countries stilldeveloping the PRSP or in the early stages ofimplementing it. These include clarificationof the poverty monitoring framework thatdefines roles and re s p onsibilities and ensuri n gsufficient re s o u rc e s , both human and financial,are available. Considerable potential existsfor the UNDP to coordinate monitoring toensure that organisations, both public andprivate, operate in a complementary mannerand do not duplicate each others’ work.

BOX 10: SUPPORT TO POVERTY MONITORING: THE EXAMPLE OF TANZANIA

In building poverty monitoring capacity in Tanzania,the UNDP provides support to the PRS Secretariatin the Vice-President’s office, which is responsible for implementation and monitoring of the PRS.TheUNDP supported the process of choosing indicators to be used in the PRS(P) through participation inthe inter-ministerial workshop that focused on the choice of these indicators. The UNDP assisted thegovernment in drafting the Poverty Monitoring Master Plan. It is a member of the government inter-ministerial technical committee on PRSP, in which capacity it assisted the government in producing thefirst PRS(P) prog ress re po rt in 2001, which enabled Tanzania to reach the completion po i nt under HIPC-II.It co ntinued wo rking closely with the gove rn m e nt in the pre p a ration of the second PRS prog ress re po rtfor 2001/2002.

The UNDP is a member of va rious pove rty monito ring wo rking groups on Re s e a rch and An a l ys i s, Ce n s u sand Surveys, Routine Dat a , and Di s s e m i n at i o n , and it provides financial re s o u rces to Re s e a rch and An a l ysisand Dissemination groups.The CO provides support to Participatory Poverty Assessment (PPA) activitiesunder the pove rty monito ring sys te m ,the results of which will be used to info rm the PRS process on pove rtyissues in Tanzania. The CO is also supporting the PER/MTEF process, which informs the PRS process onre s o u rce allocations among PRSP pri o ri ty secto r s.The CO also suppo rts the PER/MTEF process in Zanzibar.

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General conclusions about the UNDP’sengagement in the PRSP process may besummarised as follows:

• The most common criticisms arise becausethe process is evolving, and it is not clearhow important problems internal to theprocess will be resolved.

• While the financial contribution of ana g e n cy genera lly affects its influence within the donor community, the financialcontribution of UNDP did not prove to bea constraining factor.

• The greater the degree of national ow n e r s h i p,the less rivalry and more complementarityt h e re is likely to be among donors and lenders.

• Fo s t e ring national ownership re q u i res the full participation of different parts of government and civil society organisations,and this requires overcoming the capacityconstraints faced by stakeholders, publicand private.

• Strengthening skills in policy formulation,policy analysis, monitoring, and evaluationto enhance multistakeholder participationis a key role for the UNDP together withmembers of the UNCT.

• Playing a more effective role in the PRSPp rocess re q u i res an enhancement of tech n i ca ls k i lls amongst UNDP staff prov i d i n gupstream policy advice, as well as amongthose engaged downstream, in order tolink macro and micro issues.

MOVING UPSTREAM _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

As the Bureau for Development Policy, theHuman Development Report Office, andthe Office for Development Studies haveshown in their work and reports, the humandevelopment approach represents a pro-poorframework to the approach to development,including a macroeconomic package that isp ro - p o o r. In each country, this package may bes om ewhat diffe re n t , for the UNDP ch a ll e n g e sthe on e - s i ze - f i t s - a ll appro a ch . C e n t ral to the

U N D P’s ca p a c i ty building efforts for countryownership of policies is the human deve l o pm e n tapproach, with its pro-poor monetary, fiscal,and exchange rate policies that create themacro environment for human developmentand poverty reduction.

The Wo rld Bank and the IMF are engagedin internal discussion on how to make theirlending more pro - p o o r, both in terms of policiesand con d i t i on a l i t i e s . This provides the UNDPwith a key opport u n i ty to demon s t rate cl e a rlythat the human deve l o pment appro a ch incl u d e sa com p re h e n s i ve macro e c on omic fra m ew o rk .Further, the evaluation found that the WorldBank and the IMF seem to be open to i n n ov a t i ve ideas in this are a , w h i ch the

III. Organisational Findings

BOX 11: THE UNDP’S COMPARATIVE ADVANTAGES

• The UNDP is pe rce i ved by both gove rn m e nt sand other members of the international community as impartial (the word ‘neutral’ isfrequently used),and therefore, can play arole in sensitive matters that some donorsand lenders may not be well positioned toundertake. This reflects the essentially complementary relationship among donorsand lenders, which the UNDP can enhance.

• Closely related to the above, the fact that theUNDP is not a source of substantial deve l o p m e nta s s i s t a n ce,far from being a source of we a kn e s sin influencing po l i cy, is a plat fo rm for its po l i cyinfluence. This is the source of its ‘neutralmediator’ role. This neutrality must becombined with technical expertise to havean impact on policy.

• Within the UN system,the UNDP’s lack of aspecialised function is a benefit , which givesit a broader perspective than other agencies,and, compared to some, a longer-term viewof policy.

• As the coordinator of the UNCT, it is in a position to pursue harm o n i s ation of diffe re ntprogramming processes and ensure the synchronisation,whenever possible, of theCCA and UNDAF with national developmentplans—the CCA serving as an input into thePRSP and contributing to monitoring ofprogress towards the MDGs, and the UNDAFre p re s e nting the UN’s action plan for the PRSP.

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UNDP could provide.Headquarters’ policy work in the macro-

e c on omic area is not alw ays well known at theCO leve l .E f fe c t i ve channels of disseminationof this work to COs, and especially to RRs,would facilitate the UNDP moving upstre a min the policy process.

UNDP staff in Headquarters and the COsf re q u e n t ly point out that the agency was deeplyinvolved in PRSP-type work long beforeother international agencies and institutions.However, the full implication of this fact frequently is not drawn: PRSP engagementis the natural extension of the UNDP’s pastand current work on human development.I n d e e d , one interp re t a t i on of the PRS Pprocess is that the World Bank and the IMFhave formalized, under a new name, thel on g - t e rm appro a ch and deve l o pment stra t e gyof the UNDP.

The lon g - t e rm pove rty focus of theUNDP has at least two important implica t i on s .Fi r s t , it implies that the UNDP’s engagementis not ‘new’; it is the same essential work,reorganised under a new rubric. Second, itimplies that mu ch of the UNDP’s work can bei n t e g rated into the PRSP fra m ew o rk withoutloss of what makes that work unique: a s s i s t i n gparticipation to facilitate country ownership,using the national HDRs to aid in identifyi n gthe mu l t i d i m e n s i onal nature of pove rty,applying policy research from Headquartersto give guidance in how growth might be morepro-poor, and combining sectoral expertiseand capacity building to help governmentsdevelop effective monitoring mechanisms.

MAKING PRO-POOR MACROECONOMIC POLICY WORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

There are some UNDP staff who are notaware of the detailed work done in theUNDP on macroeconomic policy (discussedin more detail under ‘pro-poor growth’) andstructural changes (‘reforms’), and they tendto defer to the multilateral agencies in thisarea. Following from this is a revealed preference for capacity building and othersupport to focus on social sectors and lineministries rather than on the key macropolicymaking units such as Ministries ofFinance. The effect of this emphasis on

social sectors can be to leave the UNDP withrelatively less engagement with the PRSP-formulating unit of the government thanwith the line ministries that, at best, provideinput into the PRSP.

Experience shows that the UNDP has theexpertise at Headquarters to provide supportfor formulating pro-poor upstream policies onmacro policy, trade policy, enterprise reform,and government restructuring. An exampleof effective UNDP support to Ministries ofFinance can be found in Vietnam, where aUNDP project played an important role in supporting the government’s ambitious p ro g ramme of public sector re f o rms incl u d i n gd e c e n t ra l i s a t i on of financial process andm on i t o ring impact of public sector expectation s .This type of upstream capacity building, is agood practice that should be generalised.

As a result of the UNDP’s work within thef ra m ew o rk of the Human Deve l o pm e n tapproach, COs have expertise in povertyreduction that typically exceeds that of anydonor or lender. The effectiveness in thea p p l i ca t i on of this expertise to support countrypolicies and national ownership is enhancedby the UNDP’s long engagement in countri e s .Equally, the UNDP’s project experience atthe local level gives its staff and partners adifferent insight into poverty issues.

The linkages from the local and centrallevel have yet to be fully developed or, wherethey are developed, to be fully exploited.With the advent of the PRSP pro c e s s ,p ove rtyreduction policies have to be placed within a specific macroeconomic framework. Inprinciple, this represents an important stepf o rw a rd . In pra c t i c e, it can mean that pove rtyreduction strategies are subsumed under themacro framework or are treated as ‘add-ons’to that framework. For the UNDP to beeffective in its engagement in the PRSPprocess, it is necessary for COs to havee x p e rtise in macro policy and provide ca p a c i tybuilding in this area,as well as strengtheninganalytical and strategic thinking amongstUN staff.

While the macro fra m ew o rk within PRS Psis an area in which the multilaterals haveparticular expertise and strong institutionalinterest, the UNDP can provide substantiveinput in this area. In particular, the UNDPcan advocate for the PRSP macro frameworkto allow for ‘fiscal space’ to foster pro-poor

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expenditure. In several countries, includingones not visited in this study, the UNDP hasp rovided important analysis and ca p a c i tybuilding in the area of fiscal policy. This incl u d e sw o rk on pro-poor fiscal policy by the Bureau forD eve l o pment Po l i cy and the Regional Bure a ufor Latin Am e ri ca and the Caribbean (RBLAC ) .

SUPPORT TO THEPRSP PROCESS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The UNDP is an organisation with manypoints of view on social and economic issues.Ove ra ll , the latter is a great source ofs t rength for the organisation because itallows for the emergence of new ideas. Thisabsence of an organisational ‘line’ on issues,s u ch as what constitutes sound macro e c on om i cp o l i cy, the benefits of pri v a t i s a t i on , e t c . ,means that one must be cautious with regardto the extent to which Headquarters prov i d e sguidance on such issues in the field.

In countries in which the developmentp a rtnerships are harm onious and the COs arecommitted to the PRSP process, relativelylittle dire c t i on from Headquarters is re q u i re d .When there are substantial tensions amongthe development partners over aspects of the

PRSP process, guidance from Headquarters,i n cluding clear and strong support for the CO s ,would enhance PRSP engagement, as well asfoster a sense of ownership and commitmentto the process among UNDP staff.

With regard to financial resources,most ofthe RRs reported that funds were not thep rinciple con s t raint on their ability to supportand influence the PRSP process, althoughwith greater resources, COs could obviouslyprovide more support. There are specific c i rc u m s t a n c e s ,a rising from country needs andUNDP in-house expert i s e, that can make fundsa binding constraint on CO activities. Themethod of accessing and mode of disbursementof funds can seriously delay and constrain theability of COs to respond quickly to thedynamics of the unfolding of the PRSPprocess. COs enjoying the right of DirectExecution, or organising activities throughNa t i onal Exe c u t i on and NGO Exe c u t i on ,h a vea substantial advantage over those whoseactivities fall under Agency Execution. Fromthe field studies comes the con cl u s i on that thereis no doubt that the latter has a negative impacton CO effectiveness. In terms of executingp ro j e c t s , the UNDP is perhaps the most flexibleof the UN agencies. The Dire c t , Na t i on a l ,a n dNGO execution modes contribute to this.21

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

21. This conclusion is in line with the DEX evaluation conducted in 2000, which stated that “…as a way of doing business, DEX presented expanded potential for the direct delivery of services to clients to meet an array ofneeds…where flexibility, speed of response and delivery are major considerations…”

CHAPTER IIICONCLUSIONS AND RECOMMENDATIONS

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The MD of September 2000 representsa historic consensus for global action toa ch i eve 8 cri t i cal go a l s , with 18 specific

targets for pove rty era d i ca t i on ,h e a l t h ,g e n d e requity, environmental sustainability, and forcreating the enabling policy framework of animproved trading and financing system. TheM on t e r rey Consensus of March 2002 and theWorld Summit on Sustainable Developmentheld in Johannesburg in August 2002 further

deepened this global consensus, providing anu n p recedented opport u n i ty for sustained pro g re s stowards the MDGs. In the context of thisglobal con s e n s u s , the PRSP process has emergedas an important national instru m e n t , t h ro u g hw h i ch gove rnments in developing countri e s ,i nc o o p e ra t i on with civil society and their re s p e c t i ved eve l o pment part n e r s , can formulate and imple-ment national strategies to ach i eve their re s p e c t i vepoverty and human development goals.

A key conclusion of the evaluation is forUNDP to play a more substantial ro l e, since thePRSP process has the potential to transformthe policy making and the partner dialogueprocess in positive and unprecedented ways.This conclusion applies even to countries inwhich the process is facing constraints andch a ll e n g e s . In most of the countries rev i ew e d ,the PRSP process has generated positive ch a n g e sin the re l a t i onship between the gove rnment andthe governed, the development community,and partner gove rn m e n t s . Based on thise x p e ri e n c e, the ev a l u a t i on also con cludes thatPRSP is a dynamic,developing phenomenonin which the UNDP should engage morefully as a partner.

It can be argued that enhanced UNDPengagement may raise complex questions ofadded legitimacy, w h i ch the PRSP process maynot otherwise have . H ow eve r, this ev a l u a t i onwould like to posit that this higher-orderUNDP engagement be guided by both theopportunity to make the PRSP the actionplan for the MD and also the opportunity top romote changes in the pro c e d u res gove rn i n gthe PRSPs so that their pro-poor potential is fully harnessed. More specifical ly, UNDPengagement could be guided by the foll ow i n gconsiderations:

1. If explicitly placed within the frameworkof the MD, the PRSP process can create a

positive dynamic for development partner-ships and,m o re import a n t ly,p ove rty re d u c t i one f f o rt s . Since the MD is more than MDG s ,the current practice (or intention) tomechanically include MDGs as a set oftargets or indicators in PRS Ps is a som ew h a tlimiting exercise.

2. In pro c e d u ral term s , at pre s e n t ,P RS Ps existprimarily as a condition for World Bank(and to a lesser extent IMF) programmes;as such , t h ey must rev i ewed by theExecutive Boards of these organisations. IfPRSPs are to be seen as national policydocuments, then clearly the World Bankand IMF Boards should treat them as suchand formally endorse or approve only theirrespective support of them.

If the above is accepted, then there q u i rement of the present Joint St a f fAssessment of the PRSP also has to berethought. As national policy documents,there is, of course, a legitimate need fornational institutions to review and assessprogress. For external partners, this raisesan important question: What do they do in this case? Do they support the nationalprocess or do they conduct their ownassessments? A pragmatic appro a ch pro b a b lyrequires both, with important caveats: thatthe UNDP, as the coordinator of the UNs ys t e m , be an integral part of the assessment

I. The Big Picture

42

process; and that external partners desistfrom conducting separate assessments (toreduce transaction costs and the possibilityof mixed messages).

Also under current provisions, progressre p o rts on PRSP implementation are specifiedas deliverables to the BWI, not to nationalgovernments or legislatures or civil society.This priority should be reversed.

3.The following changes in practice shouldalso be considered:a. The nature of the relationship between

the BWI and the UNDP should be thatof partnership, from which a mutuallyagreed division of labour derives, notvice-versa.

b.Currently, PRSPs tend to be a macro-e c on omic fra m ew o rk from which apoverty reduction strategy derives; thisstructure should be reversed. The PRSPshould be a pro-poor macro - d eve l o pm e n tf ra m ew o rk ,f rom which a macro e c on om i cpolicy package is a derivative.

The macro e c on omic policy package con s i s t e n twith pro-poor deve l o pment must have gre a t e r

flexibility than its current BWI orientation,including, as a minimum, greater fiscal spaceand monetary policy that gives priority tomedium term growth pro-poor priorities.

The latter condition is of key importance.As discussed earlier, the UNDP, with its longhistory of human development and pro-poorp o l i cy fra m ew o rk s , is well positioned to prov i d esignificant value to the PRSP process. TheUNDP work places importance on income andasset redistribution as essential complementsto fostering a strong growth performance;reallocation and expansion of public sectorrevenues to create fiscal space for expenditure sthat are dire c t ly pro - p o o r; m on e t a ry policy thatplaces first priority on enhancing growth,from which the stabilisation goals derive, notv i c e - ve r s a ; and private sector deve l o pment withina pro-poor fra m ew o rk , rather than the reve r s e .

There is one final and overriding conditionfor legitimacy and engagement of all partiesto the PRSP process: substantial progress onMDG Eight, which promises a doubling of con c e s s i onal deve l o pment assistance.This target, quite modest in absolute terms,represents the litmus test of the commitmentof donors and lenders to poverty reduction.

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The main conclusions of this evaluationand other reviews provide useful elementsthat may con t ribute to ev o lving a more balanced and practical conceptual frameworkfor the pre p a ra t i on of pove rty re d u c t i onstrategies that can greatly accelerate the paceof progress towards the millennium goal ofh a lving pove rty by 2015. The main elements ofs u ch a fra m ew o rk may be summarised as foll ow s :

• Clarifying, through careful poverty assess-ments, the principal causes of poverty andthe opportunities and the constraints thatwould determine the well-being of thepoor; and identifying the critical points ofi n t e rve n t i on that can enhance theseopportunities and reduce the constraints;

• Deepening the national ownership ofd eve l o pment policy tow a rds a politica lconsensus between the government andcivil society;

• Broadening the participation of CSOs thatrepresent the poor beyond consultation toi n clude more meaningful part i c i p a t i on ,p a rt i c u l a rly in cl a ri f ying the causes of pove rtyand in evolving policies to address them;

• Harmonising the policy framework formacroeconomic stabilisation with policiesre q u i red for stimulating growth andinvestment, and human development andp ove rty reducing policies and expenditure s ;

• Identifying the key points of leverage thatwill address the economic, social, political,or institutional dimensions of poverty; and

designing processes and mechanisms toa ch i eve effe c t i ve implementation of pove rtyre d u c t i on policies, both at the macro and thel o cal leve l , in a mu t u a lly re i n f o rcing pro c e s s ;

• Promoting the social empowerment of thepoor through pro-poor organisations andtheir upgraded ca p a c i ty to ensure the ownership of the pove rty re d u c t i on stra t e gyis con t i n u o u s ly shared with those for whosebenefit the strategy is being implemented,hence the importance of a dynamic humand eve l o pment fra m ew o rk for pove rty re d u c t i on ;

• C reating mon i t o ring and ev a l u a t i onmechanisms that will assess the impact ofthese policies and pro g rammes on thepoverty situation and deepen the processby exploring and strengthening linkagesb e tween macro policies (top-down pro c e s s e s )and local initiatives (bottom-up processes).

The PRSP process has already stimulateddebate and discussion on these aspects ofp ove rty re d u c t i on , but as the ev a l u a t i on pointsout, not all countries have been able to meeta ll these re q u i rements and pre re q u i s i t e s .E a chcountry will have to define its own specifica p p ro a ch to pove rty re d u c t i on according to itsown political priorities and local conditions.The intern a t i onal com mu n i ty, i n cl u d i n gbilateral and multilateral donors, can supportthe process by showing greater flexibility inits appro a ch to con d i t i onalities and prov i d i n gadditional resources for human developmentand poverty reduction expenditures.

II. Making PRSPs a Pro-Poor Development Framework

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III. Specific Recommendations

The primary responsibility for evolving thePRSP process and utilizing it to attain itsdevelopment goals rests with the countriesc on c e rn e d . If this ev a l u a t i on provides guidanceto the developing countries in this task, oneof its main purposes would have been served.But the report also identifies specific areas in which UNDP can strengthen its capacityto re s p ond to requests from pro g ra m m ec o u n t ries for assistance or support in the PRSP process. The PRSP process is c u r re n t ly undergoing substantial ch a n g ewith pra c t i cal experience generating newinsights and approaches in each country.These re c om m e n d a t i ons should be read in that context. The recommendations areclustered into three sets: strategic issues,organizational issues, and evaluation issues.

STRATEGIC _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

PRSP as the action plan for the MD: Ashas been stated earlier, if the MDGs areto be achieved by 2015, there must be amedium-term planning instrument in placeto s u p p o rt this go a l . It is possible that UNDP,t h rough strategic part n e r s h i p s , can helptransform the PRSP into such an instrumentfor countries that choose to undertake this.Without pro-poor PRS Ps , the MDGs wouldbe difficult to achieve in many countries. Toe n s u re lon g - t e rm success of the PRSP pro c e s s ,which is essential for poverty reduction, theUNDP (and the UNCT) can assume a majorrole in influencing the PRSP frameworkand in supporting the process within there f o rmed fra m ew o rk , with particular re fe re n c eto the development strategies for 2015 basedon MDGs, in a participatory manner so thatMDGs are nationally owned. As mentionedearlier, a joint memo from UNDG and theWorld Bank has recently been agreed uponthat will help in providing the necessaryguidance on the respective roles of the UNand the World Bank in providing support tothe PRSP and MDGR processes.

UNDP/UN and the BWI partn e r s h i p :UNDP/UN should be seen as a key part n e rin providing support for the PRSP. ‘Support’should be interpreted in the broader senseand not merely in financial terms. Deliveringon the potential of the PRSPs requires fullpartner effort—a joint effort of the UNDP,the World Bank,and the IMF in the contextof a UN team effort led by the UN RC.Ongoing dialogue at the highest levels maybe required to ensure that the implications offull partnership are understood and acceptedin the respective organisations. It is also re c ommended that work i n g - l evel con s u l t a t i on sbetween the World Bank and UNDP shouldbe revived to enhance the partnership furtherand to dialogue on issues pertaining to PRSP implementation. Specific memorandaof understanding and related training may berequired to further this objective.

As a partner with gove rn m e n t s , t h eUNDP should support the practice ofnational legislatures approving or at least discussing the PRSP document before it issubmitted for rev i ew by external actors.Within its stra t e gy of partnerships withother international institutions, the UNDPshould ensure that it is the government (onthe basis of broad-based participation) thatdrives the PRSP process.

UN system coordination: While the UNDPhas institutional and local strengths forengagement in the PRSP process, its corestrength lies in the UNCT. This has notbeen fully exploited. There is often littlei n c e n t i ve for some UNCT members toengage in the PRSP process. Understandingof the process and its key elements variesconsiderably across agencies. As part of its partnership strategy, the UNDP shoulds t ress the principle that deve l o pment strategies should be country driven. TheUNDG should support further clarificationof the role of the UNCT in the PRSPp rocess and the re l a t i onship with theMDGs. At the same time, the agenciest h e m s e lves re q u i re guidance from theirheadquarters as to the importance of full

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engagement in the PRSP.The UNDP should take the lead in fosteri n g

commitment by the other UN agencies tothe key outcomes of the PRSP process,e s p e c i a lly country ow n e r s h i p. The linksbetween the PRSP and the CCA/UNDAFa re not con s i s t e n t ly visible. The CCA / U N DA Fprocess should consciously follow the PRSPprocess and time frames of UNDAF cyclesshould coincide and harmonise with PRSPs.To the extent possible, CCA and PRSPanalyses should be combined, as was the casein Tanzania.

ORGANIZATIONAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

UNDP Headquarters: The main recom-mendation of this report is that the UNDPshould make the PRSP play a more centralrole in its country level programming andimplementation.It should therefore also playa more central role in its policy developmentand support activities, c on d i t i onal upon the developing re l a t i onship between thePRSP process and the MD framework ofi n t e rn a t i onal commitment to eliminatingpoverty in all its aspects. As a corollary of themain recommendation, the UNDP has thepotential to provide cri t i cal intern a t i on a linput into the PRSP process in many countri e sbecause of its comparative analytical andpolicy strengths and,in rare cases, due to thesize of its programme.

Policy Support: To focus its PRSP workand successfully reform the PRSP process,UNDP needs clear policy stances on key issues.This could be facilitated by strengtheningthe current role played by UNDP PracticeNo te s . The publica t i on could provide even moreguidance on how COs could place the PRSPat the centre of their opera t i on s . For example,the policy note on engagement with civilsociety could be supplemented with anotherthat addresses the importance of the PRSPas a fra m ew o rk within which this engagementcan take place and the UNDP’s role in supporting civil society participation in theprocess. In order to play an effective role ins u p p o rting the ownership pro c e s s , the UNDPwill have to develop its own view of thenature and practice of ownership. Thereappears to be no institutional policy either atH e a d q u a rters or in the COs on what nation a lownership means in pra c t i c e . While all UNDPactivity involves a commitment to national

ownership, outcomes are sought on an ad hocbasis. This pragmatism is appropriate to anextent, but asserting leadership requires theUNDP to establish its own guidelines ford e s i red ownership outcom e s . These guidelineswould be of great practical aid to COs.Specific guidance and help is re q u i red on topicssuch as the issues and measures involved inextending pove rty mon i t o ring beyond itscurrent income focus.

Specifically, the UNDP should develop aview on the appropriateness of policy andp e rf o rmance con d i t i on a l i ty as part of its effort sto develop national capacity for formulatingpro-poor economic and social policies andnational systems of monitoring. A step inestablishing a clear UNDP position is tostress the distinction between PRSPs beingc o u n t ry dri ven and nation a lly ow n e d .Economic policies embodied in a PRSP canbe ‘off the rack’ (country owned) withoutbeing ‘b e s p ok e’ ( c o u n t ry dri ve n ) . It is UNDP’sposition that PRSPs and all developmentpolicies should be country driven, in thatthey are first selected and designed by thegovernment, then nationally owned througha process of part i c i p a t i on . Facilitating the firstinvolves the UNDP ’s long-standing practiceof combining ca p a c i ty building with access top ro-poor policy fra m ew o rk s .T h u s , the UNDP’ss t rength is pre c i s e ly in ensuring that nation a llyowned policies are also country driven.

Experience sharing and support: Concretesteps should be taken to strengthen mech a n i s m sfor the sharing of experience among COs.One step would be to initiate regular PRSPbriefing papers for UNCTs. Key reforms inthe PRSP process would facilitate nationalow n e r s h i p. H e a d q u a rters could advoca t ethese, which would include: a) parliamentarya p p roval of PRS Ps ; b) directing PRSP pro g re s sreports to the national audience, in additionto donors and lenders; c) joint evaluations ofP RS Ps to eliminate the current pro l i fe ra t i on ofd onor and lender mission s ; and d) gove rn m e n tand national ownership of PRSP ev a l u a t i on s .Another essential step to effe c t i ve COengagement in the PRSP process is politicalsupport to RRs when tensions arise withindevelopment partnerships.

S trengthening te ch n i cal cap ac i ti e s : To anch o rthe proposed role for the UNDP in theP RSP pro c e s s , the UNDP has to substantiallyupgrade its technical capacities to backstopits engagement in the PRSP pro c e s s .Specifically, this will have a major impact

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on the work of the UNDP’s Bureau forDevelopment Policy (BDP) and the SubR e g i onal Facilities (SURFs), w h i ch areunderstaffed, as expectations of the UNDP ’srole increase. For instance, there is only onepoverty specialist in the SURF in Nepal,covering the entire Asia and Pacific region(although there are other specialists lookingat poverty concerns from the perspectiveof gender and gove rn a n c e ) . While som ep ro g ress has been made by the UNDP in developing knowledge networks, well-s t ru c t u red re l a t i on s h i p s , e s p e c i a lly withregional and national policy institutes, couldbe strengthened to enable privileged accessto quality expertise and thinking. Further, agood case can be made for stronger part n e r s h i p sb e tween re g i onal bureaus and BDP along thelines of the recent BDP/RBAP collaborationon country studies.

Country offices: UNDP COs are stake-holders in the PRSP pro c e s s , and like governments, civil society, and other donorsand lenders, should feel ownership. COsshould view the PRSP as a process in whichthey are deeply involved and whose outcomew i ll be part ly determined by their engagement.In many COs, and among some staff inH e a d q u a rt e r s , t h e re is insufficient appre c i a t i onof the importance of the Human Deve l o pm e n tapproach to the analysis of poverty and formulating policies for poverty reduction.The effect of the analytical work done bypolicy units in New York and in some COs is seriously weakened by the absence of close and purposeful coordination of some of this work with the PRSP process and the campaign for the MDGs.

Familiarising staff in COs with pro-poorpolicies, especially pro-poor macroeconomicpolicies, is a pre-condition to the UNDP’se f f o rts in ca p a c i ty building to foster hom e g row n ,c o u n t ry - owned deve l o pment stra t e g i e s .E s p e c i a lly in the CO s , but also in Headquart e r s ,the transition to the new UNDP focus onp ro a c t i ve, ‘u p s t re a m’ p o l i cy engagement re q u i re sfar more intensive and concerted work.

While UNDP country office staff are, withfew exceptions, dedicated and well trained in their specialties, P RSP work re q u i re sa p p l i ca t i on of particular expertise that is absentor over-burdened in most countries. While areview of the technical and administratives k i lls re q u i red by COs to play a more effe c t i verole in the PRSP process may be helpful, s om e

specific proposals can still be made. First, inPRSP countries,at a minimum,UNDP COsshould have resident Senior Econ om i s t s / Po l i cyAn a lysts who are well versed in humand eve l o pment thinking with strong policybackgrounds. To facilitate or contribute tothe content discussion of PRSP as an equalp a rt n e r, the CO s ’s u b s t a n t i ve expertise availablein the office is critical to advocate pro-poorpolicies and issues of human poverty. Theexample of Vietnam is instru c t i ve in this con t e x tand illustrates clearly why the developmentc om mu n i ty should take the UNDP seri o u s ly.At present, there are 22 such positions in theAfrica region, 3 in the Asia and the Pacificregion, 1 in Europe and the CIS region, andnone in the Latin American and Caribbeanand Arab States regions. Second, these COcapacities have to receive strong technicals u p p o rt from the SURFs and UNDPH e a d q u a rters as stated above . T h i rd ,Headquarters and each CO should considerreorganising the work of a CO to make itmore relevant to the PRSP framework. Thiswould facilitate making the PRSP a catalystthat facilitates the country programme.

The ‘evaluability’ of PRSPs: The success ofPRSPs depends in part on being able toc re d i b ly measure and assess pro g ress in re l a t i on to the intended outcom e s .This re q u i re sclear benchmarks and performance criteriaso that credible and value adding evaluationand performance assessment is possible. It is, of course, accepted that each countrygovernment requires an in-country capacityto monitor the pro g ress of PRS Ps . At the sametime, the broader intent of the PRSPs willnot be met without the existence of inde-pendent evaluative capacities in civil society.To this end, efforts on evaluation capacityd eve l o pment should become an integral part of the assistance provided by external agencies on PRSPs. These efforts should include the involvement of the InternationalD eve l o pment Evaluation Association (IDEAS)launched by the World Bank and UNDP l a t elast ye a r. Set up as a voluntary association ,IDEAS is a key effort to strengthen ev a l u a t i vecapacities in the developing world at nation a land regional levels so that assessment ofd eve l o pment perf o rmance becomes hom e g row nand a shared task. It is designed to promotet ra n s p a re n cy and accountability. This re s o u rc eshould be tapped by COs.

ANNEXES

48

EVALUATION OF UNDP’S ENGAGEMENT IN POVERTY REDUCTION STRATEGY PAPER (PRSP) PROCESSES

CONTEXT AND BACKGROUND _ _ _ _ _ _ _ _ _ _

The scale of the ch a llenge to reduce pove rtyis daunting. In the next 25 years, the world ’spopulation is projected to grow by approxi-mately two billion people, most of whomwill be born in developing and emergingeconomies. The Millennium DevelopmentGoals (MDGs), adopted by Heads of Statein September 2000, c om p rise ambitious targets, beginning with halving, by 2015, theproportion of people in extreme poverty andhunger worl d w i d e . The Mon t e r rey Con s e n s u s(adopted in Mexico in March 2002) includesthe UN’s MDG s , reflecting a re n ewed c ommitment by nations to provide themeans to address poverty worldwide.

In view of the global deteri o ra t i on ofp ove rty and inequality, the Intern a t i on a lFinancial Institutions decided to combinedebt relief with heightened poverty impact.In December 2000, the Boards of the WorldBank and the International Monetary Fund(IMF) approved the Po verty Reduction Stra tegyPaper (PRSP), as a new partnership baseda p p ro a ch to the ch a llenge of reducing pove rtyin low income countri e s . Fo ll owing its mandate to integrate the objectives of poverty reduction and growth more fully intoits opera t i ons in its poorest member countri e s ,the IMF established the Poverty Reductionand Growth Facility (PRGF), replacing theEnhanced St ru c t u ral Adjustment Fa c i l i ty.Na t i on a lly owned pove rty re d u c t i on stra t e g i e sare to be at the heart of the new approach.Programmes supported by the PRGF (andthe World Bank’s concessional window—I n t e rn a t i onal Deve l o pment Association [IDA ] )must be framed around a comprehensive,nationally owned PRSP prepared by the

b o r rowing country. The PRSP is thenendorsed in their re s p e c t i ve areas of responsibility by the Boards of the IMF andWorld Bank as the basis for the institutions’concessional loans and for relief under theenhanced Heavily Indebted Poor Countries(HIPC) Initiative. The PRSP approach alsos t resses the underlying principle that nation a lp ove rty strategies should foster domestic and external partnerships that improve the effectiveness of development assistance.

The declared objective of the PRSP is top romote pove rty - re d u c t i on strategies that arec o u n t ry - d ri ve n , re s u l t s - o ri e n t e d ,c om p re h e n s i ve,p ri o ri t i s e d ,p a rtnership based and framed withina lon g - t e rm perspective . Other major fe a t u re sof the PRSP are that it should be an analyt i ca lf ra m ew o rk , i n t e g rating macro e c on om i c ,structural, sectoral and social considerations;it should lay out a set of poverty reductionmeasures and policies; and it should span aninitial thre e - year time fra m e . Tw e lve countri e sh a ve so far completed PRS Ps — s even inA f ri ca , four in Latin Am e ri ca and theCaribbean Region and one amongst CISc o u n t ri e s .T h i rty-four countries are at the stageof having formulated or are formulating anInterim-PRSP.

G i ven its mandate and com p a ra t i veadvantages, UNDP expects to play a majorrole in maximizing the potential of PRSPs tocontribute to poverty reduction. UNDP’ss u p p o rt to pove rty re d u c t i on strategies commenced well before the 1995 WorldSummit for Social Development. A reviewu n d e rtaken by UNDP Bureau of Deve l o pm e n tPolicy in 2001 detailed its support over theyears to poverty reduction strategies,in termsof design, i m p l e m e n t a t i on and mon i t o ring ofs u ch strategies in some 60 countri e s . U N D P’sconvening power and aid coordination role,its multisectoral approach, and its countryp resence are re c o g n i zed as significant tosecure country-level ownership of the PRSPand country-level monitoring of the MDGs.It is understood however that though the

Annex 1: Terms of Reference (June 2002)

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MDGs are the goal posts that countriesa g reed to re a ch by a certain date, e a ch country’s path towards achieving the MDGswill be different.

The lead role of the UN in monitoring theMDGs and the role of the Bretton WoodsInstitutions in leading the PRSP process arec om p l e m e n t a ry. The UN Deve l o pm e n tGroup issued two Guidance Notes to theUN Country Teams on Reporting on theMDG at country level (October 2001) andon the PRSP (November 2001). T h eGuidance Note on PRSP outlines ways UNC o u n t ry Teams can support countri e sthrough the UN Development AssistanceFra m ew o rk (UNDA F ) , making it a key business instrument for the UN to ensure thecountry team’s cohesion behind the nationald eve l o pment stra t e gy. The Com m on CountryAssessment (CCA) and UNDAF guidelinesw e re re c e n t ly revised (May 2002) to take accountof the MDGs, linkages with the PRSP, andto reflect other recent developments. UNDPH e a d q u a rters re c e n t ly issued its own guidanceor Policy Note on engagement at countrylevel in PRSPs (March 2002). The Noteu n d e r s c o res two principles of its engagement:the first, engaging at the behest of gove rn m e n t sand national partners in civil society; and thesecond,helping to elaborate real choices, andw h e re appro p ri a t e, a l t e rn a t i ve views anda n a lys e s , based on cri t e ria of e q u i ty and humandevelopment. It outlines UNDP’s potentialcontributions in helping to define both thePRSP process and its contents. The UNDPAdministrator recently stated his belief thatthe PRSP process would be the structurefor synthesizing poverty strategy and macro-e c on omic policy in the ove rwhelming majori tyof the poorest countries.

The PRSP approach has gained supportamongst members of the donor communitywho intend to align their programming withthe country’s national strategy. Civil societyorganizations are utilizing the opportunity tomake their views known and engage in theP RSP pro c e s s , in some cases for the first time.

In January 2002, the Wo rld Bank and IMFu n d e rt o ok a rev i ew of the PRSP pro c e s s . It waspreceded by a number of regional meetingson national PRSPs during 2001, in whichUNDP was a key collaborator. The reviewfound that progress had been made in thearea of strengthening country ownership;

that there was a more open policy dialoguewithin government and across parts of civils o c i e ty; that a more central role had been give nto poverty reduction in policy discussions,including in macroeconomic and structuralpolicies; and that there was acceptance bymajor donors of the principles of the PRSPapproach (UNDP is cited as an examplea m ongst the major UN organiza t i on s ) ,h e ralding the possibility of stronger part n e r s h i p swith countries and improved donor coord i n a t i on.The review also pointed to the need forimproving the PRSP process, i.e. on PRSPp a rt i c i p a t o ry pro c e s s e s . The rev i ew notes thatthe “open and participatory nature of thePRSP approach is regarded by many as itsdefining ch a ra c t e ristic and its most significa n ta ch i eve m e n t” . I t h i g h l i g h t s , h ow eve r, the limited role so far of parliaments in thep re p a ra t i on , a p p rov a l , and mon i t o ring ofcountry strategies;the lack of involvement ofspecific civil society groups (e.g.w om e n’s gro u p s ,p rivate sector, and direct re p re s e n t a t i ves of thepoor); and the need for stronger partnershipsbetween donors and countries.

JUSTIFICATION FOR THE EVALUATION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The PRSP has increasingly become thee x p re s s i on of a country’s national deve l o pm e n tstrategy in terms of its poverty reductionobjectives. Programme countries have beenreceiving UNDP’s support and continue toseek its active engagement in the pre p a ra t o ryand implementation processes. The PRSPa p p ro a ch re p resents an area of stra t e g i cimportance to UNDP and a core priority forone of its key global pra c t i c e s — p ove rtyre d u c t i on for human deve l o pm e n t . In the 2001Results Oriented Annual Report (ROAR), ithas been reported that UNDP COs in 42countries were involved in PRSP processes,an increase from 24 in 2000 and 11 in 1999.

The major justification for an evaluation totake place at this time is as follows:

• The implementation of the PRS Papproach is moving into its third year.Results achieved in those countries thatformulated a PRSP early on need to bei d e n t i f i e d , and experiences and lesson sshared with other countries. Findings from

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the January 2002 Wo rld Bank/IMF Rev i ewmentioned above will be a valuable contri-bution to UNDP’s efforts in assessing theresults of its support to the implementationof the PRSP approach.

• The Millennium Summit took place almosttwo years ago.The extent to which UNDP’ssupport has helped PRSP countries tomake progress in translating the goal ofh a lving extreme pove rty into nation a lp ove rty re d u c t i on strategies should beassessed to know if PRSPs are actuallytargeting the right areas.

• Poverty is rising rapidly in Europe andCentral Asia, and continuing to rise inSub-Saharan Africa. In Asia, where mostof the worl d’s poor are found, the pro p o rt i onliving in poverty has declined dramaticallyover the past two decades, but progress isslow. Four in ten households (over 500million people) still remain poor in SouthAsia. The policy choices being made bycountries to address poverty are amongstthe key factors in efforts to reduce poverty.UNDP’s role and potential contributionsin encouraging a pro-poor focus in thesepolicies, emphasizing human developmentconcerns and other key assets that favourthe poor, as well as policies that enhanceempowerment, need to be assessed.

• UNDP’s draft 2001 ROAR highlights thefact that of 85 countries where UNDP iss u p p o rting pove rty re d u c t i on stra t e g i e s , on ly13 specifica lly targeted macro e c on om i cp o l i cy option s . The link between them a c ro e c on omic fra m ew o rk and pove rtyreduction is vital if the impact of PRSPson poverty is to be maximized. UNDP’spotential role in helping to make this linkneeds to be identified.

Other contextual issues that should bekept in mind during this evaluation arethose external factors that have affected gove rn m e n t s ’p e rf o rmance in reducing pove rtyi n cluding the global econ omic situation ,p a rt i c u l a rly low com m o d i ty pri c e s ,w h i ch havemade it more difficult for PRSP countries toreach performance targets set out in theirpoverty reduction plans; the AIDS crisis andits devastating impact on deve l o pm e n tefforts in developing countries, especially inAfrica; and conflict situations. A number of

countries that are formulating PRSPs areeither still engaged in or have just emergedfrom conflict. The extent to which UNDP,with other partners, is assisting countries ind eveloping realistic plans and ach i evable targets to ensure PRSPs are addressing theimpact of the AIDS crisis on poverty andthat national efforts to mainstream peacebuilding and conflict prevention are includedin PRS Ps , should be assessed. Fu rt h e r,UNDP has con t ributed to the work one n g e n d e ring PRS Ps in seve ral countri e soften in partnership with UNIFEM. The2001 ROAR notes the incl u s i on of the gender dimension in the PRSP formulationprocess, but points out the need to integrategender analysis much more systematicallyand purposefully in UNDP’s support forpoverty reduction. UNDP’s potential role inthis area should be assessed.

This evaluation is one of three thematicevaluations on poverty to be undertaken bythe Evaluation Office in 2002. The othertwo will address micro-macro linkages forpoverty alleviation and governance-povertylinkages. Though they are being conductedas three separate exercises, it is expected thatthe combined results of all three evaluationswill not only provide UNDP with a basis forreflecting on the efficacy of its strategy forpoverty reduction for human development(in all its varied dimensions) and recommendhow it can utilize its resources for maximumresults in the three focus areas, but also thatit will help UNDP realize its potential roleand maximize its comparative advantages, sothat it strategically positions itself to supportnational and global targets to reduce povertyin the coming decade.

PURPOSE OF THE EVALUATION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

UNDP has played and continues to playdifferent roles in PRSP countries dependingon the context and the situation in which itfinds itself. The findings of this ev a l u a t i on areexpected to assist UNDP in positioning itselffor a more effective role and for impactfulc on t ri b u t i ons to the PRSP pro c e s s e s , with a viewto learning lessons for its future engagement.

The purpose of the ev a l u a t i on is to provide evaluative evidence on UNDP’s role

51

in the achievement of the following keyPRSP outcomes:

• Increased country ownership of the PRSPpreparation process

• Broad-based participation by civil societyand the private sector in the process

• PRSPs reflect increased commitment to‘pro-poor’ growth

• Pa rtnerships built between deve l o pment actors• Coherence promoted between PRSPs and

other longer term national planninginstruments

• P RS Ps address the mu l t i d i m e n s i on a lnature of poverty

• Pove rty mon i t o ring ca p a c i ty built atnational and local levels

The evaluation will focus on the followingcategories of analysis:

• Identify results or progress made• Identify UNDP’s strengths and constraints• Highlight good practices and what works

or does not work• Draw lessons and promote their applica t i on

to policy and practice relating to futureUNDP poverty reduction initiatives

• Promote a cro s s - fe rt i l i za t i on of experi e n c e sacross regions

SCOPE OF THE EVALUATION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation will address the followingissues and its findings and recommendationswill focus mainly on assessing, within theoverall context of UNDP’s poverty reductioni n i t i a t i ve s , its con t ri b u t i ons to, its com p a ra t i veadvantage and potential role in the followingkey areas:

• Engagement in pro-poor policy delibera-tions influencing the content of PRSPs

• Engagement in PRSP pre p a ra t i on process andi nv o lvement of partners including civil society

• Su p p o rt to implementation and mon i t o ri n gof PRSPs

The evaluation will more specifically seekto answer the following questions in relationto the seven key outcomes cited above v i s - à - v i sits own role and contributions towards theachievement of the key outcomes:

National ownership and responsibility:• H ow have countries (gove rn m e n t , n a t i on a l

i n s t i t u t i ons) reflected ownership of the PRSP? • Is there commitment to the PRSP process

by countries and to what extent does itreflect homegrown development strategiesthat have a lon g - t e rm perspective, or is it essentially a balance of paym e n tfinancing strategy?

• Are domestic resources aligned with thenational strategy in terms of budgetingand restructuring of social services?

• What role is UNDP playing to movethe PRSP financing strategy to povertyreduction strategies?

Participation:• How can UNDP increase its effectiveness

in facilitating broad-based participation inPRSP processes, especially by civil society,the private sector and parliaments?

Results:• What can UNDP learn from those countri e s

that have completed full PRSPs? Are theyon track, and if not,why not? What re s u l t sa re there in terms of pove rty re d u c t i on ?

• What were the contributing factors forpositive results and if the results were poorwhat were the causes?

• How implementable are PRSP targets andhow consistent are they with the MDGs?

Pro-poor commitments:• Do the PRSPs reflect commitment to pro-

poor growth by countries in the policiesbeing adopted by countries?

• To what extent has UNDP’s past supportto strategies, policies and programmes forpoverty reduction for human developmentbeen taken into account in the PRSP pro c e s s ?

• How does UNDP engage in PRSPs andwhat is its role and contribution to theprocess? Is it a meaningful role or not?What is UNDP’s value-added?

Partnerships:• H ow effe c t i ve is UNDP’s part n e r s h i p

strategy in influencing both the PRSPc ontent and its pre p a ra t o ry process in contributing to the achievement of keyPRSP outcomes?

• How has it coordinated support with thatof the donors?

52

• How does the government view UNDP’spartnering role and its support to them?

Coordination of UN system’s response to poverty reduction:• How has UNDP utilized its lead role as

manager and funder of the UN RC systemto coordinate the UN systems’ response top ove rty (e.g. t h rough Theme Gro u p s ) ?H ow has it enabled UN agencies to active lyengage in supporting the PRSP process?

• Is there consistency with MDGs in PRSPsand what are the linkages between PRSPsand CCA and UNDAF, particularly withregard to issues of rights and equity?

UNDP programme support strategy:• What lessons can be learnt about the

appropriateness of UNDP support (HQand SURF) to COs in terms of guidance,t i m e ly policy advice, seed mon ey and other appropriate support relevant to thispractice area?

• How has the recent upstream movementof UNDP’s operations and delivery of policy-related services at country level ledto the enhancement of competencies andcapacities of staff to provide strategic support to countries in the formulationand implementation of the PRSP appro a ch ?What lessons have COs learnt about howthey can improve their effectiveness andcontribute to the achievement of results inthis area?

PROCESS ANDMETHODOLOGY _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

A desk rev i ew will be made of all countri e s ,and a limited number of team visits will bemade to seven countries to validate issues andto hold discussions with key stakeholders.The use of tri a n g u l a t i on methods—documen-tation, perception and validation—will bee m p l oyed in the pre p a ra t i on of countrypapers at national level. The evaluation willbe carried out as follows:

Phase 1: H e a d q u a rters based. Desk analys i sof PRS P / I - P RSP countri e s ; c on s u l t a t i on swith Bureaus and concerned staff, UNDGO,World Bank (Washington), UNICEF andUNFPA; drafting of Terms of Reference

for the evaluation. Selection and recruitmentof four external evaluators including theTeam Leader by EO. R ev i ew of dra ft TOR by Senior UNDP Management,E x t e rnal Ad v i s o ry Pa n e l , S M T / ET, an internal Reference Group (composed of staffat HQ, country and sub-regional levels),UN agencies and other concerned partners.EO con s u l t a t i ons with Team Leader atUNDP HQ on TOR and detailed frame-work for the evaluation including evaluationmatrix for each country. Development andreview of detailed methodology paper for the ev a l u a t i on . I d e n t i f i ca t i on of nation a lconsultants by respective COs; selection andrecruitment of national consultants by EO.National consultants will prepare CountryPapers and will be part of the evaluationteam in-country.

Phase 2: Country visits and country casestudies preparation. Prior to country visits,team orientation in NY with team leader and EO including brief ori e n t a t i on on outcome evaluation methodology. Review ofdocumentation and desk review. Visits toseven selected countries will be undertakenby the evaluators to evaluate UNDP’s rolevis-à-vis the PRSP outcomes. Visits willinvolve meetings, interviews, surveys, andfocus group discussions with stakeholders.Team members will divide the country visitsbetween themselves. The countries selectedwill reflect a mix of criteria—completion of afull PRSP, I-PRSP completed and PRSPunder pre p a ra t i on , high HIV adult prev a l e n c era t e, emerging from con f l i c t , a SURF is basedin the vicinity, examples of partnerships ina c t i on , i n t e resting process and examples of high and low engagement of UNDP as identified by UNDP Regional Bureaus.

C o u n try Case Stu d i e s : Na t i onal institution s /consultants will prepare country reports.

Phase 3: Pre s e n t a tion and rev i ew of p re l i m i n a ry dra ft re p o rt and findings.Review by EO and External Advisory Panel;review by UNDP and relevant stakeholders.

Phase 4: Fi n a l i za tion of re p o rt and d e b ri e f i n g of re l evant stakeholders in aregional lessons learning workshop

Phase 5: Promoting their application to

53

policy and practice relating to future UNDPpoverty reduction initiatives in 2003 andbeyond through dissemination of findingsvia media outlets and pertinent products andincorporation of lessons learned in differentfora including electronic learning platforms

PRODUCTS EXPECTED FROM THE EVALUATION _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation products will consist of the following:• A main evaluation report of not more

than 25 pages (12 point font) with anexecutive summary, which will include theresults of seven country visits, forward-looking recommendations for formulatings u p p o rt tow a rds the outcomes with pro p o s e ds t rategies for future UNDP assistancetowards achieving the outcomes, lessonslearned, and good practices

• A summarized analysis and assessment ofthe results of the question n a i re to allPRSP/I-PRSP countries, as an annex tothe Main Report

• Seven separate country re p o rts whichd e s c ribe the PRSP pro c e s s , U N D P’s contributions and its potential role

COMPOSITION OF THE EVALUATION TEAM _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation Team will consist of fourinternational evaluators including the TeamLeader and a national consultant from eachof the countries to be visited, who will jointhe team during the respective country visits.

EXTERNAL ADVISORY PANEL AND INTERNAL REFERENCE GROUP _ _ _ _ _ _ _ _ _

As part of the consultative process inundertaking such an evaluation, an externaladvisory panel (composed of well knownd eve l o pment thinkers, a cademics and p ra c t i t i on e r s ) , and an internal re fe re n c eg roup (experienced colleagues in CO s ,SURFs and HQ, taking into account theirinterest and background) will be established.They will be consulted on draft TORs, andon the findings of the dra ft ev a l u a t i onre p o rt . Their inputs and comments wille n ri ch the process and enhance understandingof the issues amongst a wide audience.

T I M E TABLE _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Phase 1 will be undertaken betw e e nMarch and August, 2002, phase 2 will beginin September and phase 3 in December. Aninitial draft synthesis report is expected to becompleted for review in December, 2002.

54

COUNTRY VISITS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Seven countries were identified for casestudies by UNDP EO in consultation withthe regional bureaux. EO selected nationalc onsultants for each country study in consultation with the relevant CO and theinternational evaluation team, who served asmembers of the evaluation team in-country.The national consultants pre p a red back g ro u n ddocuments including a chronology of thePRSP process in each of the seven countries,country-specific bibliographies of primaryand secondary documentation, a summary ofthe PRSP process from the beginning,including activities of UNDP. The majorPRSP-related issues that the country visitshould investigate were also identified. Themission to the seven countries took placeduring October and November 2002.

DESK REVIEWAND OTHER SOURCES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation team undertook a deskrev i ew of re l evant documentation fromUNDP, UNDG and partner organisationsinvolved in the PRSP process including theWorld Bank and IMF. In addition eachmember undert o ok a desk rev i ew of the re l ev a n td o c u m e n t a t i on related to the countri e she/she was to visit as part of the evaluation.The desk review process was supported bythree efforts. First, a research assistant in theEO prepared a background paper on the o rigins of the PRSP pro c e s s . Se c on d , a

re s e a rch assistant at CDPR pre p a red anannotated bibliogra phy on PRS Ps and collected all relevant documentation. Third,a Web site was also established in NY for useof the EO and the evaluation team.

REVIEW AND CONSULTATIONS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The evaluation process involved a series ofconsultations by the evaluation team withsenior management and staff of UNDP inNew York and staff at the World Bank andIMF in Washington. Key elements of thisprocess included: (a) travel by the evaluationteam to UNDP New York in September2002 to meet with the senior management ofthe UNDP EO, the EO Task Manager andother key members of UNDP HQ staff todiscuss the evaluation, review documentationand methodology; (b) foll owing country visits,a brief report on Preliminary Findings wasp re p a red in early-December for a con s u l t a t i onat a joint meeting of UNDP, IMF and theWorld Bank held in Washington togetherwith staff from the three organiza t i on s(December 2002). In addition , the ev a l u a t i onteam leader made additional trips to NewYork to hold discussions with EO and otherkey staff at different stages of the evaluation.A meeting of the External Advisory Panelwas organized in Ap ril 2003 to rev i ew the mainfindings and re c om m e n d a t i on s . M e e t i n g swere also held with UNDP stakeholders,andwith UNDP senior management on the dra ftreport (May 2003).

Annex 2: The Evaluation Approach

55

This list does not include persons met byevaluation team members in the field duringcountry visits as these are contained in theseven country reports. (See Evaluation ofUNDP’s Role in the PRSP Process, Volume II:Country Reports, UNDP, 2003.)

UNITED NATIONS DEVELOPMENT PROGRAMME _ _ _ _ _ _ _ _ _ _

Office of the AdministratorMr. Mark Malloch Brown, UNDP

Administrator and Chairman of UNDG

Bureau for Development Policy (BDP)Mr. Stephen Browne, Principal Advisor and

Group LeaderMr. Jan Vandemoortele, Principal Advisor

and Group LeaderMr. Terry McKinley, Macro, Growth and

Structural Policy AdviserMs. Diana Alarcon, Poverty Assessment

and Reports Adviser

Bureau of Crisis Prevention and Recovery (BCPR)

Ms. Ameerah Haq, Associate DirectorMs. Eleanor O’Gorman, Policy AdvisorMr. Nick Hartmann, Programme Specialist,

Strategic Planning UnitMr. Jamal Benomar, Senior Advisor

Bureau for Resources & StrategicPartnerships (BRSP)

Mr. Christophe Bahuet, Policy AdvisorMr. Michael Marek, Director Liaison

Office, Washington

Evaluation Office (EO)Mr. Khalid Malik, DirectorMr. M. Nurul Alam, Deputy DirectorMs. Ruth Abraham, Evaluation SpecialistMs. Linda Maguire, Evaluation SpecialistMs. Fadzai Gwaradzimba,

Evaluation Advisor

Regional Bureau for Africa (RBA)Mr. Jacques Loup, Deputy Assistant

Administrator & Deputy DirectorMr. Jean Barut, Programme AdvisorMr. Tegegnework Gettu, Country Director

Cluster III SADCMr. Abdoulaye Mar Dieye, Country

Director, Cluster I ECOWASM r.B a b a car Cisse,C o u n t ry Pro g ramme Ad v i s o rMs. Mary Symmonds, Country

Programme Advisor

Regional Bureau for Arab States (RBAS)Ms. Flavia Pansieri, Chief of

CO Division and Team

Regional Bureau for Asia and the Pacific (RBAP)

Mr. Hafiz Pasha, Assistant Administratorand Regional Director

Mr. Subinay Nandy, Chief, RegionalProgramme Division

Mr. Masaru Todoroki, Deputy DirectorMr. Zhe Yang, Programme Advisor, South

and West Asia DivisionMr. B. Murali, Programme Specialist

Regional Bureau for Europe and the CIS (RBEC)

Mr. Jakob Simonsen, Deputy AssistantAd m i n i s t rator and Deputy Regional Dire c t o r

Mr. Stefan Vassilev, Senior ProgrammeManager and Team Leader

M r.No rimasa Sh i m omu ra ,Pro g ramme ManagerMs. Joanna Kazana, Programme Manager

Regional Bureau for Latin Americaand the Caribbean (RBLAC)

M r. G i l b e rto Fl o re s , Acting Deputy Dire c t o rMr. Andrew Russell, Policy AdvisorMr. Enrique Ganuza, Policy Advisor

Operations Support Group (OSG)M r. M i ch ael Con s t a b l e, Pro g ramme Ad v i s o r

Annex 3: List of People Consulted

56

OTHERS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

UN Development Group Office (UNDGO)

Ms. Heidi Swindells, Associate DirectorMr. Ian Mcfarlane, Policy SpecialistMr. Gerton van den Akker,

Programme Specialist

INTERNATIONAL MONETARY FUND _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Policy Development and Review Department

Mr. Masood Ahmed, Deputy Director Mr. Brian Ames, Advisor

Independent Evaluation OfficeMr. David Goldsbrough,

Deputy DirectorMr. Steve Mugerwa, Sr. EconomistMr. Isabelle Mateos y Lago, Economist

External Relations Depar tmentMr. Wayne Camard, Sr. Economist,

External Relation Department

Other DepartmentsMr. Mark Plant, Division Chief,

PRGF Operations Dept.Ms. Caroline RobbMr. Leonardo Cardevil, WHDMs. Naheed Komani Mr. Shamsuddin M. Tareq, FADMr. Heny Ma

WORLD BANK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Poverty Reduction & EconomicManagement (PREM)

Mr. John Page, Director Ms. Jeni Klugman, Lead Economist

O p e ra tions Evaluation Department (OED )Mr. Gregory Ingram, Director-GeneralMr. Bill Battaile, Senior EconomistMr. Oswaldo Feinstein, ManagerMr. John Eriksson, Consultant

Other Departments/OfficesMr. Brian T. Ngo, Lead Economist,

Office of the Chief EconomistMs. Marlaine Lockheed, Manager

Evaluations, World Bank InstituteMr. Asad Alam, ECA Region

57

Branson, William, and Hanna Nagy. 2000. Ownership and Conditionality, OECD WorkingPaper Series No. 8. Washington: World Bank.

Dollar, David, and Aart Kraay. 2001. ‘Growth is Good for the Poor,’ accessible at http://econ.worldbank.org/view.php?type=5&id=1696

Khan, Mohsin S., and Sharma Sunil. 2001 (September). ‘IMF Conditionality and CountryOwnership of Programs,’ IMF Working Paper. Washington: IMF Institute.

Lübker, Malte, Graham Smith and John Weeks. 2003. ‘Growth and the Poor: A commenton Dollar and Kraay,’ Journal of International Development 14, pp. 555-571.

Malloch Brown, Mark. 2002 (January). ‘Statement by UNDP Administrator MarkMalloch Brown,’ Conference on the Review of Poverty Reduction Strategy Papers, Sessionon Partnership and Donor Assistance, Washington. New York: UNDP.

________. 2002 (February). ‘Human Security and the Future of DevelopmentCooperation,’ Speech to the Development Cooperation Forum. Atlanta.

________. 2002 (March). ‘Address by UNDP Administrator Mark Malloch Brown,’International Conference on Financing for Development. Monterrey, Mexico.

________. 2002 (June). ‘Meeting the Millennium Challenge: A strategy for helpingachieve the United Nations Millennium Development Goals,’ speech delivered in Berlin.

________. 2002 (12 December, wrongly dated 2003). MDGs in 2003, memorandum to allUNDP Staff. New York: UNDP.

McKinley, Terry. 2001 (March). ‘Economic Policies and Poverty Reduction:Macroeconomics, Restructuring and Redistribution – the Basis for a UNDP GuidanceNote,’ (Draft Document) Bureau for Development Policy.

Tadjbakhsh, Shahrbanou. 2001a. Summary of UNDP Break-out Session on HumanDevelopment and Poverty Eradication: Day 2: Growth and Equity, Second ECA Forum onPoverty, November 27-30, 2001. Budapest, Hungary.

________. 2001b. UNDP’s potential contribution to the PRSPs: Human Development as bothmeans and end of Poverty Eradication Strategy, Draft Notes, Budapest Poverty Forum,November 27-30, 2001. New York: UNDP.

International Development Association and International Monetary Fund. 2002 (March).Review of the Poverty Reduction Strategy Paper (PRSP) Approach: Main Findings.

________. 2002 (March). Review of the Poverty Reduction Strategy Paper (PRSP)Approach: Early Experience with Interim PRSPs and Full PRSPs.

United Nations Development Group. 2001 (October). ‘Reporting on the MillenniumDevelopment Goals at the Country Level,’ Guidance Note. New York: UNDG.

________. 2001 (November). ‘UNDG Guidance Note to United Nations Country Teamson the PRSP. New York: UNDG.

Annex 4: Selected List of Documents

58

United Nations Development Programme. 2000. Human Development Report Bolivia 2000.La Paz: UNDP.

________. 2000. Overcoming Human Poverty. New York: UNDP.________. 2002 (April). ‘The Role of Economic Policies in Poverty Reduction,’ Policy Note________. 2002 (August). ‘UNDP’s engagement in Poverty Reduction Strategy Papers,’

Policy Note. New York: UNDP.

United Nations Development Programme and the United Nations Population Fund,Executive Board. 1999 (December). The Way Forward: The Administrator’s Business Plans,2000-2003. New York: UN.

59

Annex 5: Country Case Study

Country

1

Azerbaijan

Bolivia

Ethiopia

Mali

Pakistan

Tanzania

Vietnam

CCA

2

Sept 2001Jul 2003

Jun 2000

Sept 1999

Sept 1998Mar 2002

early 2003

May 2000

Dec 1999

UN Country Team

UNDAF

3

Planned Dec 2003

Mar 2002

Oct 2001

Sept 1998Mar 2002

Planned 2003

Feb 2001

Jun 2000

MDGReport

4

mid–2003

Mar 2002

Apr 2002

Planned

Planned

Feb 2001

Jul 2002

I-PRSP

5

May 2001

Jan 2000

Nov 2000

Jul 2000

Apr 2003

Mar 2000

May 2001

PRSP

6

Dec 2002

Mar 2001

Oct 2002

Feb 2003

Planned July 2003

Oct 2000

Jun 2002

World BankBo rrow i n g

7

IDA/IBRD

IDA/IBRD

IDA

IDA

IDA/IBRD

IDA

IDA

IMF Bo rrow i n g

8

PRGF

None

PRGF

PRGF

PRGF

PRGF

PRGF

HIPC St at u s

9

—

√

√

√

—

√

√

PRSP Status

Notes: 5 and 6: Dates on PRSP status obtained from the World Bank Web site and communication with UNDP COs.PRSP/I-PRSP status as of 3 April 2003. 9: HIPC status as of 3 April 2003. Source: UNDGO,World Bank,and IMF

60

This annex briefly describes the evaluationprocess in each country, the country context,development assistance and the UN countryt e a m , and the PRSP pro c e s s . Fi n d i n g s ,l e s s on sl e a rned and re c om m e n d a t i ons for eachcountry are found in the country reports,published separately from the Main Report.

AZERBAIJAN COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The Azerbaijan CountryStudy mission took place between 27October and 7 November 2002 and wasundertaken by Michael Reynolds (CDPR)and Emil Aliyev (National Consultant). Keydocuments including the newly launchedPRSP were examined and meetings wereheld with a range of key stakeholders andp a rticipants in the PRSP pro c e s s . In addition ,a field trip was made to the NakchevanAutonomous Republic.

C o n t ex t : A ze rbaijan regained independencefollowing the collapse of the Soviet Union inlate 1991 during the middle of a war withneighbouring Armenia over the territory ofNa go rny Ka rabakh (an encl a ve in the terri t o ryof Aze rbaijan) that was to last until a cease-f i re was reached in 1994. Approximately 20%of the country (Nagorny Karabakh and sevenc ontiguous re g i ons) is still occupied byA rmenian forces and the country hasa p p rox i m a t e ly one mill i on Aze rbaijani internally displaced persons (IDPs) togetherwith refugees from Armenia and other c onflicts in the re g i on . Since 1995, the p e rf o rmance of Aze rbaijan in ach i ev i n gm a c ro e c on omic stability and re s u m p t i on of growth had been impressive. The mainchallenge now facing the government is totranslate economic growth into sustainablep ove rty re d u c t i on . It is estimated that 49% ofthe population is living in poverty and 17%in extreme pove rty. Since independence socialindicators have deteriorated, partly because

of the large number of displaced people.D evelopment Assistance and the UN

Country Team: Compared to many otherCIS countries, aid intensity in Azerbaijan islow at less than 3% of GDP (2000). Thenumber of international players is also verysmall with only Germany and the USA largea m ong the bilateral don o r s . Within theUNCT, UNDP, UNICEF and UNFPA arethe three resident development agencies. AUN Com m on Country Assessment (CCA) wasprepared in 2001 but not widely distributedor approved by the government. A newCCA will be produced by 2003 and a UND eve l o pment Assistance Fra m ew o rk (UNDA F )will be in place in 2004. In the meantime ajoint Memorandum of Understanding hasbeen signed among UN agencies for the jointimplementation of activities including fundraising for projects.

The PRSP Process: In Azerbaijan theprocess of preparing the PRSP began inMarch 2001 and was completed in June2001.In July 2001,the government launchedthe process of preparing the full-PRSP, to beknown as the State Programme of PovertyR e d u c t i on and Econ omic Deve l o pm e n t(SPPRED). To this end, 15 sectoral workinggroups (SWG) were formed by the newlycreated Ministry of Economic Development( M ED) and a PRSP Se c re t a riat was establishedin the MED to support the process. EachSWG, composed of members of differentgove rnment agencies and NGOs, w a sresponsible for developing sectoral strategynotes (SSNs), which ultimately would feedinto the SPPRED. Implementation of a participation action plan was carried out bythe PRSP Se c re t a riat with mu l t i - d onor support involving a Public Education andOu t re a ch Pro g ram and Town Hall Meetings.The PRSP was launched on 25 October 2002 ata con fe rence attended by the Pre s i d e n t ,m e m b e r sof the government, the donor c om mu n i ty,i n t e rn a t i onal financial institution s , i n t e rn a t i on aland national NGOs, and the private sector.

Annex 6: Summaries from the Seven Country Reports

61

BOLIVIA COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The mission took placeduring 4-16 November, carried out by JohnWeeks (CDPR) and Oscar Garcia (Pro Ac t i v a ) .Key documents were examined and meetingswere held with a range of key stakeholdersand participants in the PRSP process.

Country Context: Bolivia is one of twoland-locked countries in South America. Ithas a population of 8.3 million inhabitingone million square kilometres. The officiallanguage is Sp a n i s h . The country hasimportant cultural and ethnic diversity (37g roups and 10 linguistic families). The constitution establishes that Bolivia is multi-cultural and ethnically diverse. The politicalsystem is now democratic, after a period ofmilitary dictatorship up to 1981.

Pove rty is accompanied by pro f o u n dinequality between rural and urban areas,and between rich and poor in all areas.Poverty affects more than 50% of urbanhouseholds, and in rural areas the estimate is greater than 90%. Income distribution inurban areas is extremely unequal,with a Ginicoefficient of 52.5 in 1990 (W I D ER database2 0 0 0 ) . Since 1985, when stru c t u ral adjustmentpolicies were intro d u c e d , i n e q u a l i ty hasincreased, and there is agreement that themost vulnerable sectors of society have bornthe cost of adjustment. Policies adopted tomitigate the social consequences of theadjustments have had limited effect.

M a c ro e c on omic stability was ach i eve dduring the 1990s, followed by a growth rateof 4% and inflation less than 5%. T h i sgrowth rate is not enough to deal with thec o u n t ry’s deve l o pment ch a ll e n g e s . Si n c e1999, Bolivia has suffered from an economiccrisis, arising from external shocks. The e c on omic growth rate fe ll to an annual average of 1.3%,associated with a substantialincrease in the unemployment, aggravatingsocioeconomic inequity.

D evelopment Assistance and the UNCountry Team: Bolivia is the second largestrecipient of Official Development Assistance(ODA) in the LAC region, averaging closeto US$ 80 per capita over the past decade,US$ 498 million in 1989 (11% of GDP) to569 million in 1999 (6.8%, see World Bank2 0 0 1 , based on OECD/DAC ) . O DA peakedin the mid-1990s and dropped gradually to

the level of the previous decade. TechnicalC o o p e ra t i on Fl ows during the past decade ca nbe broken down into three distinct periods:s o - ca lled first-genera t i on re f o rms (1985-1 9 9 2 ) ,s e c on d - g e n e ra t i on re f o rms (1993-1997),and HIPC-II re f o rm assistance (1997-pre s e n t ) .Each period had a distinct pattern of ODAflows and capacity development.

A large number of donors and lenders andUN agencies operate in the country. Limitedprogress has been made on coordinatinge x t e rnal assistance. The UNDP office is highlya c t i ve . Am ong other con t ri b u t i ons to Bolivia’sd eve l o pment policy, its two NHDRs have beene x t re m e ly influential. The UNCT com p l e t e da CCA in June 2000,and the last UNDAF isMarch 2002, coinciding with an MDGR.The I-PRSP was published in January 2000,and the PRSP in June 2001, the latter after aprocess of broad-based participation.

The PRSP Process: The PRSP processf o ll owed dire c t ly from the HIPC pro c e s s ,b a s e dupon the broad-based National Dialogue of2000. The central government, supported by experts from national institutions andi n t e rn a t i onal organiza t i on s , p roduced aPRSP document, with the inputs from theDialogues. The objective of the PRSP is toreduce poverty through economic and socialpolicies, focusing on the poorest, for whomthe strategy seeks to facilitate a better accessto mark e t s , p rovide basic social serv i c e s ,increase their social protection, and promotethe equality of opportunity.

The four strategic components that definethe needed actions to fight poverty are:1) increased wages and employment oppor-tunities, favouring the productive capacity ofs m a ll urban agri c u l t u ral pro d u c e r s ; 2) prom o t i n gru ral deve l o pment through larger inve s t m e n t sin pro d u c t i ve and trading infra s t ru c t u re ;3) fostering pri m a ry educa t i on and preve n t i vehealth services; 4) an increase in security forpoor people, protecting the most vulnerablep o p u l a t i on (ch i l d re n ,e l d e rly, and populationsaffected by natural disasters); and 5) the promotion of social integration, encouragingsocial participation in order to increase bothpopular participation and decentralization.

The stra t e gy also states the intent toachieve equity in favour of ethnic groups andnative populations, for equity across genders,and for the sustainable use of natura lresources. The goals identified in the PRSPare: 1) a decrease the incidence of poverty in

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at least 22 percentile points (from 63 to41%); 2) a reduction in extreme poverty from37 to 17%; 3) an increase in life expectationfrom 62 to 69 years;and 4) an increase in thepercentage of the population with eight ormore school years from 51 to 67%.

ETHIOPIA COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The Ethiopia CountryStudy mission took place during 11-18October 2002 and was undertaken byA l e m ayehu Geda (SOAS/CDPR) andGetahun Tafesse (National Consultant). Keydocuments including the newly launchedPRSP were examined and meetings wereheld with a range of key stakeholders andparticipants in the PRSP process.

Country Context: Ethiopia is in EasternAfrica, in the region commonly called theHorn of Africa. It has a population of about65 million (2002), with the majority (morethan 85%) residing in rural areas. It is thesecond most populous country in Africa.Ethiopia is a potentially rich country withconsiderable natural resources although littlehas been exploited and the country remainsextremely vulnerable to the vagaries of natureand external shock s . In 1974, the last empero rwas deposed by a military junta, which thenruled the country from 1974 to 1991.During this time the military governmentexperimented with the Soviet-style centralplanning for almost two deca d e s , and mark e t sand the private sectors were suppressed. Atthe same time the econ omy coll a p s e d ;g rowt hplummeted and civil war led to the fall of theregime in 1991. The military regime wastoppled by a lose coalition of rebels forcesunder their umbre lla organiza t i on , t h eEthiopian People Revolutionary DemocraticFront (EPRDF). The EPRDF adopted amultiparty system, at least in principle, andre o r g a n i zed the previous administra t i veregions under a federal system. The federalstates were formed on an ethno-linguisticbasis and the country renamed the FederalDemocratic Republic of Ethiopia (FDRE).In 1992, the EPRDF also accepted WorldBank/IMF St ru c t u ral Adjustment Pro g ra m m e s(SAPs). Economic growth performance inthe last decade was quite strong and wasaccompanied by a stable price level. Because

of the structure of the economy, growth performance is largely determined by theperformance of the agricultural sector. Thecountry has a large poor population which,ifit cannot be productively employed,could bea threat to the social fabric. The degree towhich economic growth affected poverty wascounteracted by a rise in income inequality.

D evelopment Assistance and the UNCountry Team: With an average investmentto GDP ratio of about 17% in the 1990s,andwith a domestic saving to GDP ratio ofabout 7% during the same period, Ethiopiahas an average resource gap of about 10% ofGDP. With such a large resource gap, thecountry has little choice but to depend onforeign finance. It is estimated that externalassistance over the last decade constituted aboutan average of 77% of capital accumulation,and approx i m a t e ly 25% of the re c u r re n tbudget of the gove rn m e n t .This cl e a rly show sthe extreme dependence of the country ondonor support and hence the significance ofn ew aid-delive ry mechanisms (or part n e r s h i pf ra m ew o rks) such as the PRS P. This is the context in which the discussion of thePRSP process in subsequent sections shouldbe understood.

The PRSP Process: The PRSP process inEthiopia began with the establishment of atechnical committee to draft the interimPRSP around May 2000. The committeec om p rised re p re s e n t a t i ves from selected gove rnment ministri e s , re g i onal gove rn m e n t s ,and parliament. Following the completionof the I-PRSP the government prepared thedetailed ‘Plan of Action for the Formulationof the PRSP’, which was launched in July2001.The preparation of the PRSP includesconsultation at wereda (district), regional,and federal levels together with consultationswith the Development Assistance Group(DAG) of donors. The PRSP Federal LevelConsultations (FLC) held in the capital inMarch 2002 represented the culminationof the participation process, and met theobjective of the Government Plan of Action(final phase) for the PRSP con s u l t a t i onp ro c e s s . Building on the were d a and Region a lLevel Consultations, the key objective of theFLC was to shift the poverty focus towardsthe national level and ensure a policy focus.The forum facilitated a broad-based stake-holder representation, including participantsfrom regional and federal levels, NGOs,

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p rivate sector, a cademic and re s e a rch institutes,and religious bodies. The FLC led to thep re p a ra t i on of the full PRSP (namedSustainable Deve l o pment and Pove rtyReduction Program, SDPRP) in July 2002.This document was endorsed by the Bankand Fund in September 2002.

MALI COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The mission took placebetween 28 October and 8 November, byZenebeworke Tadesse (FSS/CDPR) CarlosOya (CDPR) and Hamidou Magassa(National Consultant).

Country Context: Mali has a populationof 12 million people inhabiting an area of 1.2million square kilometres (8.2 inhabitantsper square kilometre) and is one of thelargest land-locked countries in the Sahel.The country became independent in 1960and was ruled by a civilian and socialist gove rn m e n t .The econ omic trends in the secon dhalf of the 1990s have been rather positive, asGDP growth rates have consistently hovereda round 5 to 7% per annum. The socioecon om i csituation appears dismal Mali is one of thep o o rest countries of the world with extre m e lylow human development indicators (ranked164 out of 174 countries in HDR 2002).The incidence of poverty is high, hoveringa round 60 to 70%, depending on the statistica lsources and the indicators used for poverty.Ac c o rding to the human pove rty index,over 70% of the population live below theinternational threshold of US$ 1 per day,1993 PPP, and 47% live in human poverty.

D evelopment Assistance and the UNC o u n try Te a m :The importance of deve l o pm e n tassistance in Mali cannot be exaggeratedboth in macroeconomic terms and in termsof the impact on government interventionand actions at the local level.

The PRSP Process: The Government ofMali embarked on the pre p a ra t i on of apoverty reduction strategy before the PRSPp rocess was approved by the IFIs inDecember 1999. Despite these nation a lefforts and donor endorsement, the SNLPwas not immediately accepted by the IFIs as a valid strategy to allow Mali qualifyingfor the HIPC initiative and the new p a rtnership between the BWI and the

national government. Therefore, in 2000,the SNLP and the long-term prospectivestudy Mali Vision 2025 were finally taken asinputs to the CSLP process, but the SNLPwas not fully taken as an I-PRS P.In September 2000 the I-PRSP (InterimCSLP) was approved successively by thegove rnment and by the Wo rld Bank/I M F. Du ring the period 2001-2002 thep re p a ra t i on of the final CSLP inv o lved d i f fe rent stages and various levels of participation. The participation process wasorganized, in principle, in an exemplary way.In May 2002, the document was approvedand submitted to the BWI, where the finalCSLP is under review for the final JSA stilltoday. The current situation in Cote d’Ivoireseems a cause of major concern and may havean effect on the evaluation of the final CSLP,given the need to incorporate this type ofexternal contingencies on the growth andmacro framework of the CSLP.

PAKISTAN COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The Pakistan CountryStudy mission took place between 11 and 21November 2002 and was undertaken byMichael Reynolds (CDPR) and Dr. G. M.A rif (Pakistan Institute of Deve l o pm e n tEconomics – PIDE).

Country Context: The Islamic Republicof Pakistan was founded as a federal republicin 1947. It has an area of nearly 800,000 km2

with a population of approx i m a t e ly 140 mill i on .While the average annual economic growthrate reached 6.5% in the 1980s,it declined to5.4% in the first half of the 1990s and 3.6%in the second. The main macroeconomicthreat remains Pakistan’s unsustainable debtposition. In the 1990s, the level of povertyincreased from approximately 27% of thepopulation in 1992/3 to greater than 32% in1998/9, which translates into an increase ofthe number of poor by 12 million over theperiod. Potential gains in poverty reductionf rom econ omic growth were there f o re negatedby rising inequality. Other social indicatorsin Pakistan also compare unfavourably withc o u n t ries with similar levels of income per ca p i t a .

D evelopment Assistance and the UNCountry Team: The UNCT in Pakistancomprises seven voluntary funds—UNDCP,

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UNDP, UNFPA, UNHCR, UNICEF andWFP and five specialised agencies—FAO,ILO, UNESCO, UNIDO and WHO. TheJoint United Nations Programme on HIV/AIDS (UNAIDS) is also represented. Inaddition, a number of non-resident agencies,n o rm a lly acting through the resident agencies,maintain a long-standing relationship withPakistan including IAEA, I CAO, U N D ES A ,UNIFEM, UNOPS, WIPO and WTO. UNagencies in Pakistan are coordinated by theResident Coordinator and maintain close linkswith their respective counterpart ministries.The total programme size of the UN systemin Pakistan is small in comparison to overallexternal assistance flows.

The PRSP Pro c e s s : The I-PRSP wascompleted in November 2001. In order tooversee the implementation of the I-PRSP,the gove rnment established the Na t i onal PRS PI m p l e m e n t a t i on Committee in Fe b ru a ry2002 headed by the Secretary General ofFinance and comprising secretaries of thefe d e ral and provincial PRSP partner gove rn m e n tagencies. The Committee is responsible forthe implementation of PRSP policy reforms,evaluation of their impact and appropriateadjustments (if re q u i red) in the policy re g i m e .In addition, the government established thePRSP Secretariat in the Finance Divisionof the Ministry of Finance to serve as a secretariat to the Committee. The NationalPRSP Implementation Committee is alsore s p onsible for the formu l a t i on of the full-PRSP with the support of the PRSPSe c re t a ri a t . In order to make a com p re h e n s i vePRSP that is truly reflective of the diversityof the federating units, the document willbe based on provincial PRSPs prepared byp rovincial gove rnments themselves in consultation with the newly elected districtgovernments. At present, it is expected thatthe full-PRSP will be complete during 2003.

TANZANIA COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The Tanzania CountryStudy mission took place between 4 to 9November 2002 and was undertaken byA l e m ayehu Geda (SOAS/CDPR) andBedasson Shallanda (National Consultant).

C o u n try Contex t : The United Republic ofTanzania (Tanzania) is a union of mainland

Tanzania and the island of Zanzibar (whichcontains two small islands of Unguja andPe m b a ) . Ta n zania is located in Eastern Afri caand has a population of approximately 34million (2000). Following its independencefrom Britain in 1961, Tanzania has followedthe strategy of what is termed as the ‘AfricanSocialism – Ujama’ the principles of whichare embodied in the ‘Arusha Declaration’ of1967. With per capita income of US$ 280 ( i n2 0 0 0 ) , Ta n zania is a low income sub-Sa h a ra nC o u n t ry. Recent major macro e c on omic tre n d sare good and the country has managed toregister a sustained growth in real GDP andper capita GDP. There has, however, beenvery limited improvement of the incomep ove rty status of Ta n zanian households over the 1990s.The rising level of inequalityhas aggravated the lack of improvement inthe condition of the poor (in particular therural poor).

D evelopment Assistance and the UNC o u n try Te a m : With an investment toGDP ratio of about 17% between 1995 and2000, and with a domestic saving to GDPratio of about 6% during the same period,Tanzania has an average resource gap ofabout 11% of the GDP. With such a bigresource gap, the country has no choice thanto depend on foreign finance to bridge it. It isestimated that external assistance constitutesabout 90% of the capital and more than 40%of the recurrent budget of the government inthis fiscal ye a r. This cl e a rly shows theextreme dependence of Tanzania on donorsupport and hence the significance of newa i d - d e l i ve ry mechanisms (or part n e r s h i pframeworks) such as the PRSP. Thus, it iswithin this general framework the discussionof the PRSP process in Tanzania needs to be understood.

The PRSP Process: The Tanzanian PRSP(I-PRSP) was first prepared in the context ofthe HIPC initiative.It was prepared througha consultative process that involved differentstakeholders at different levels. It was finallyreviewed and approved by the cabinet ine a rly Fe b ru a ry 2000. The committee of ministers and the central bank gove rn o rsteered the preparation of the full PRSP. TheZanzibar Poverty Reduction Plan (ZPRP)came after the formulation of the PRSP inthe mainland.This is partly explained by thepolitical crisis in the island following the2000 election . The principal guiding body for

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the preparation of the ZPRP was an Inter-ministerial technical committee comprisingsenior officers of the main technical imple-menting ministries chaired by the PrincipalSecretary of the Ministry of Finance andEconomic Affairs (MOFEA) of Zanzibar.

VIETNAM COUNTRY REPORT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Evaluation: The Vietnam CountryStudy mission took place in August 2003, and was undertaken by John Weeks( S OAS/CDPR) and Nguyen T h a n g(National Consultant).

Country Context: After reunification inthe mid-1970s, the Vietnamese economygrew slowly up to the mid-1980s. In 1986,the Seventh Pa rty Con g ress approved a c om p re h e n s i ve econ omic re f o rm pack a g ecalled “Doi Moi,” or renovation that shiftedthe country from central planning towards amarket-based economy. Major institutionaland policy re f o rm s , s ymbolised by price liberalisation in the late 1980s and the early1990s, the approval the legal framework forthe private sector, and a radical Land Law in 1993, changed the economic incentives ys t e m . E x t e rnal econ omic re l a t i on schanged, most notably the lifting of the USembargo in 1993 and improved access tomajor markets in developed countries.

Foreign direct investment rose from US$346 million in 1988 to more than 7 billionin 1995, reaching a peak of 8.2 billion in1 9 9 6 . D omestic investment also rose steadily.Vietnam became one of the fastest-growingeconomies in the world, with an annualgrowth rate of more than 7% in the 1990s.Inflation fell from greater than 300% in 1987to less than 4% in 1997. The economicgrowth has been broadly shared, resulting ina sharp poverty reduction, from 57% in 1993to 37% in 1998.

Growth slowed towards the end of the1990s, associated with a sharp drop in newforeign investment commitments. There iss e rious con c e rn about rising income inequality,largely generated by regional differences ingrowth rates. This has negatively affectedpoverty reduction and human development,especially in underdeveloped regions. Urbanunemployment has been rising, and ruralunemployment, estimated to be 35% during

non-harvest periods, is at critical levels.D evelopment Assistance and the UN

Country Team: Official data indicate thatODA has been growing steadily in Vietnamsince the donor com mu n i ty resumed assistanceto Vietnam in the early 1990s. Pledges by don o r sduring 1993-2001 reached nearly US$ 20billion. Disbursements during that periodamounted to US$ 10.3 bill i on . Due to effort sby the government and the donor and lendercommunity, the gap between commitmentsand disbursements has narrowed. AnnualODA disbursements could reach as much asUS$ 1.5 bill i on in 2002, an increase of almost10% from 2001. The donor community inVietnam consists of 25 bilateral donor countri e s ,20 mu l t i l a t e ral agencies, and nearly 400international NGOs. Japan is the largestdonor, followed by the World Bank, theADB and the IMF. Bilateral donors as agroup provided 50% of ODA disbursements.

Disbursements by the UN agencies werestable during 1998-2000 at about US$ 50m i ll i on . Am ong the agencies, UNDP was thelargest donor in 2001, followed by UNICEF.There was a discernible shift in the sectoraldistribution of funding from the UN family.In 1999 and 2000,health was the main re c i p i e n ts e c t o r, with the rest eve n ly spread across sectors.In 2001, agriculture was the main recipient(US$ 12 million), followed by health (US$ 9m i ll i on) and social deve l o pment (US$ 6 mill i on ) .

The PRSP Process: The Vietnamese I-PRSP and PRSP (CPRGS) build on thec o u n t ry’s socio-econ omic deve l o pm e n ts t ra t e g i e s , f i ve - year plans and targetedpoverty programmes. The sectoral parts ofthe CPRGS draw on the sectoral ten-yearstrategies for 2001-2010, and submissionsmade by line ministries to the CPRGS drafting team. As such, the national PRSPprocess began well before the governmentdecided to prepare I-PRSP at the request of the BWI. It can be traced back to the Pove rty Task Fo rce that was jointlyestablished by the government, the donorand lender com mu n i ty, and local and international NGOs in January 1999.

The poor in Vietnam were dire c t ly con s u l t e dabout the PRSP documents through policy-focused participatory consultations,so-calledParticipatory Poverty Assessments (PPA).The views of those consulted in the PPAs wereto some extent heard and taken into accountin the letter and the spirit of the CPRGS.

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Country I-PRSP PRSP

Albania May-00 Jun-02

Angola expected June 2003

Armenia Mar-01

Azerbaijan May-01 Dec-02

Bangladesh

Benin Jun-00 Mar-03

Bolivia Jan-00 Mar-01

Bosnia & Herzegovina Oct-02 first draft Mar-03

Burkina Faso May-00

Burundi expected Apr-Jun 2003

Cambodia Oct-00 Jan-03

Cameroon Aug-00 Apr-03

Cape Verde Apr-02 expected Apr-Jun 2003

Central African Republic Dec-00 expected Jul-Sep 2003

Chad Jul-00 was expected Oct-Dec 2002

Comoros was expected Dec 2002 expected Jul-Sep 2003

Congo, Dem Rep Jun-02

Congo, Rep 2002

Cote d’Ivoire Mar-02 first draft Sep-02

Djibouti Jun-01 expected Jun 2003

Dominica was expected Oct-Dec 2002

Eritrea

Ethiopia Nov-00 Oct-02

Gambia, The Oct-00 Jul-02

Georgia Nov-00

Ghana Jun-00 Mar-03

Guinea Oct-00 Nov-01

Guinea-Bissau Sep-00 expected Oct 2003

Guyana Oct-00 May-02

Haiti expected Apr-Jun 2003

Annex 7: Status of I-PRSPs and PRSPs(as of 23 April 2003)

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Honduras Mar-00 Sep-01

Indonesia was expected Oct-Dec 2002

Kenya Jul-00 was expected Jan-Mar 2003

Kyrgyzstan Jun-01 Jan-03

Lao, PDR Mar-01 expected Sep-03

Lesotho Dec-00 expected Jul-2003

Liberia

Macedonia,FYR Nov-00 Aug-02

Madagascar Dec-00 was expected Oct-Dec 2002

Malawi Aug-00 Aug-02

Mali Jul-00 Feb-03

Mauritania Dec-00

Moldova, Rep Nov-00 and Jul-02 was expected Mar 2003

Mongolia Sep-01

Mozambique Feb-00 Oct-01

Myanmar

Nepal 2001

Nicaragua Aug-00 Sep-01

Niger Oct-00 Jan-02

Nigeria

Pakistan Dec-01 expected Jul-03

Rwanda Nov-00 Jul-02

Sao Tome and Principe Apr-00 was expected Oct-Dec-02

Senegal May-00 Nov-02

Sierra Leone Sep-01

Somalia

Sri Lanka Feb-03

Sudan expected Jul-03

Tajikistan, Rep Mar-00 Oct-02

Tanzania, United Rep Mar-00 Oct-00

Togo was expected Oct-Dec-02

Uganda Mar-00

Uzbekistan was expected Jul-Sep-02

Viet Nam Mar-01 Jun-02

Yemen, Rep Dec-00 Jul-02

Yugoslavia, Fed Rep Aug-02 expected Aug 2003

Zambia Jul-00 May-02

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An n ex 8: Pove rty Reduction St rategies – Areas of Focus and Examples of Prog ress in 2001

Area of Focus

Preparation and implementation of PRSPs

Participatory approach toformulation of nationaland regional povertypolicies, strategies, andprogrammes

Development of macroeconomic policy options

Monitoring of national povertyreduction strategies

Poverty monitoring forcapacity development

Progress Reported

• Co-chairing with the governmentthe national PRS steering group;coordination role on povertyreduction vis-à-vis UN organizationsor bilateral donors

• Capacity development of institutionsresponsible for poverty policyformulation,including capacity forgender disaggregation

• Macro-micro linkages strengthened,bringing experience from regional or local poverty programmes to bearon national poverty policy process

• Promoting participatory approach in the preparation and review of PRSPs

• Supporting NGO forums, or providing training to CSOs tofacilitate input into national PRS

• Strengthening linkages betweenmacroeconomic framework andnational PRS

• Ex-ante analysis of macroeconomicpolicy options

• National policy informed by local,gender-disaggregated data

• Indicators identified for use innational PRS

• Household surveys;analysis formsbasis for national PRS,including useof human development index

• Capacity development of national statistical offices/analysis:e.g., South-South cooperation,training, databases

• Training and technical assistancefor poverty assessments

• National poverty monitoring system established, with spatially and gender-disaggregated data

COs Involved

Azerbaijan, Bangladesh, Benin,Bolivia, Burkina Faso,Cambodia,Côte d’Ivoire,Democratic Republic of Congo(DRC),Djibouti, Gambia,Georgia, Guinea,Haiti,Indonesia, Kyrgyzstan,Madagascar, Malawi, Mali,Moldova, Mongolia,Mozambique, Niger, Nigeria,Rwanda, Sri Lanka, Togo,Uganda, Tanzania, Uzbekistan,Viet Nam, Yemen

Azerbaijan, Bolivia, BurkinaFaso, Burundi,DRC, Guinea,Honduras, Lao PDR,Mozambique, Nicaragua,Niger, Pakistan, Uganda,Tanzania, Yemen

Benin, Bolivia, Cambodia,Gambia Mongolia,Mozambique, Mali, Viet Nam

Armenia, Benin, Bolivia, Bosniaand Herzegovina, Cambodia,Côte d’Ivoire, Georgia, Guyana,Haiti, Hondura, Malawi, Mali,Mauritania, Moldova,Mongolia,Niger, Pakistan,Rwanda, Senegal

Bolivia, Burkina Faso,Cambodia, Cameroon, CentralAfrican Republic, Gambia,Georgia, Guinea,Haiti,Honduras Moldova,Mozambique, Sri Lanka, Togo,Uganda, Tanzania, Yemen

Source: Adapted from the UNDP 2001 R OAR (Table 2a).

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