Selected Issues in PRSP Implementation

The World Bank and The IMF

ThessalonikiMay 28, 2005

Context

• PRS approach now in place five years– Country-owned; designed in participatory fashion– Comprehensive in approach– Based on medium- to long-term perspective– Results oriented (indicators and monitoring)

• Framework to define policies, programs and resources needed to achieve the MDGs at the country level

• Several progress reports and independent evaluations

Independent Evaluations of PRS Initiative

PRS Initiative has begun to orient stakeholders toward: - Focus on poverty reduction - Attention to results - Overarching framework for aid management

But, weaknesses remain in: - Foster better customization

- Assist in exploring wider range of policy options- Pay more attention to growth- Define clearer partnership frameworks with accountabilities

Independent Evaluations of PRS Initiative

Significant potential: strategic road map for policyTo realize this potential:• Encourage greater flexibility in implementation• Enhance results orientation to allow countries to define—

in a manner open to public scrutiny—their own benchmarks and objectives

• Provide clear, candid assessment of progress• Clarify framework to elaborate macro frameworks and

catalyze donor support

Key Issues for 2005 Review

Five themes central to effectiveness of PRS approach

– Strengthening the medium-term orientation of PRS

– Using the PRS as mutual accountability framework

– Sustaining meaningful participation

– Enhancing links between PRS and Plans/MTEFs/Budgets

– Adapting PRS approach to conflict-affected and fragile states

Strengthening medium-term orientation

• Customizing MDGs/[EU accession requirements]

• Setting stage for increased aid– Balancing realism and aspiration– Implications of more aid

• Encouraging evidence-based policy decisions – Relevant PRS targets and indicators– Monitoring and evaluation systems– Underlying analysis (PSIA, pro-poor growth)

Using the PRS as a mutual

accountability framework

• Using the PRS approach to prioritize and sequence:– capacity building

– analytic input

• Improving aid alignment and harmonization, types of aid, conditionality, volume

• Using the PRS as framework for donor coordination

Sustaining meaningfulparticipation

• Involving key stakeholders – local governments, line ministries,

parliaments

• Sustaining participation– formulation, implementation and monitoring

• Opening up space for policy dialogue• Considering influence on PRS content and

implementation

Linking the PRS with plans, MTEFs,and budgets

• Integrating PRS with existing strategies and plans and with medium-term expenditure framework and budget– Using PRS to define, cost and prioritize public actions

for poverty reduction

– Defining financing plans, including contingency planning

• Building capacity for fiscal management

Tailoring approach

to conflict-affected and fragile states

• How to apply PRS principles in fragile states?

• Are there ways for donor assistance to be provided in ways that reinforce underlying principles of PRS approach?

Expected Findings from 2005 Review

• What are the key lessons and good practices for enhancing effectiveness of the approach?

• What needs to happen to strengthen specific aspects of the country-driven development model?

• Are specific changes to the approach needed?

• How should results from the PRS approach be measured?

Outputs

• Paper for consideration at the World Bank and IMF fall annual meeting

• Going forward– Intensive follow-up on key

recommendations– Dissemination of good practices and

lessons

Some EarlyFeedback

From some PRS countries: – Pay more attention to growth and productive sectors– Political economy key; still often treated as technocratic– Need to better treat capacity issues and institutional reforms– Too many different strategies/initiatives – Value of countries sharing experiences with each other

From others:– Don’t forget the “middle-group” of countries– Better to have a few key recommendations that are actively

pursued– Need to focus on results

Changes to PRS“Architecture”

• Return to original intent– Reduce “paper” culture– Focus on underlying process in the country– Embed in domestic processes/prevent parallel processes– Encourage country specificity– Reduce perception: Washington “signs-off”

• Annual Progress Reports

• Joint Staff Advisory Note

PRS documents and WB/IMF-operations

• The Executive Boards of the World Bank and the IMF no longer formally endorse the PRS documents as a satisfactory basis for Fund and Bank concessional financial assistance.

• JSANs for APRs will be normally be issued to the Boards for information rather than for discussion by the Boards.

• For PRGF and HIPC Initiative operations, PRS documents must have been issued to the Board of the IMF within 18 months.

APR #1 Process and ProceduresPrepared by member countries in years between full PRSPs; updates

the PRSP and discusses its implementation; is distributed to the Boards of the Bank and the Fund for information

There is room to improve...

• integration of APRs with existing processes (annual budget, poverty and/or development reports)

• synchronization of APR-process with national reporting and decision making processes

• discussion of progress in PRS implementation in member countries

APR #2 Content and Focus• Nature and focus of APR can vary from year to year

– New analysis on growth, poverty, PSIA?

– Institutional developments (improved PEM, TA needs)

• Key features should be:

– Performance against targets, budget implementation

– Highlight PRSP measures implemented/not-implemented

– Reasons for successes and failures and measures to improve effectiveness

– Priorities for coming year

– Status of monitoring and evaluation systems

APR #3Changes to the PRSIn case of important changes to PRS, APR should

explain changes based on:

• Implementation experience to date

• Weaknesses and gaps in original strategy

• Changes in exogenous factors (e.g. oil prices)

• New data and analysis on determinants of growth and poverty

APR #4A communication deviceAPRs can be used to inform and/or involve domestic

stakeholders and donors regarding implementation and to build support for the PRS:

• Parliament and civil society can be engaged in monitoring and reporting

• APR can be disseminated to the public and to donor fora

• Underlying data can be made publicly available

• APR as a vehicle to harmonize donor assistance

Content of a JSAN for an APR

• Fund and Bank staff assess, based on APR and other sources:

– Performance relative to benchmarks (for monitoring and evaluation)

– Priorities for the next year as reflected, for example, in the budget

– Progress made in addressing short-comings identified in past JSANs

– Extent to which progress reporting is being used to provide transparent information on implementation progress to key domestic and external stakeholders

Content of a JSAN for a PRSP

• Advice rather than overall assessment• Priorities for strengthening over coming

year– Process and content– Consistent with starting point, capacity and support

• Serious weaknesses– Inconsistencies between PRS and its policy framework and

existing analytic work– Analytic work insufficient to support policy framework

• Attention to links to domestic processes

Thank You

dwww.worldbank.org/prspreviewConcept note for 2005 PRS reviewReferences Country documents Bibliography of evaluations, progress reports, case

studies

Links to other events