The Poverty Reduction Strategy Initiative: an independent evaluation of the World Bank’s support through 2003

The Poverty Reduction Strategy (PRS) Initiative aims to make World Bank aid more effective in reducing poverty. This paper assesses the extent to which the Initiative has helped the World Bank to reduce poverty, how relevant the Initiative is to individual countries’ quests for sustainable development, and how the Bank has supported the PRS approach.

The paper includes an overview of the PRSP program, a discussion of how PRSPs have been applied, and preliminary results of the PRSP process. In addition, findings and recommendations are provided and there are extensive reference materials including tables and statistics about the PRSP process and preliminary results.

The main findings of the paper are that:

• the Initiative is relevant but its benefits vary: progress depends on each country’s public sector capacity, government-partner relationships, and relations among donors. The Initiative is most effective in countries with strong governments and good governance
• tensions in the Initiative’s design have caused problems during implementation
• key areas need strengthening, including:
  • analytical base: particularly the causal relationship between development policies and poverty reduction
  • growth policies: PRSPs need to focus as much on the development of infrastructure and rural development as on social programs and public expenditure
  • alignment of external donors, the Bank, and the poverty reduction strategy initiative
• the Bank has effectively supported PRSP formulation, but alignment has not entailed major changes in Bank programs.

The main recommendations that have emerged from the evaluation are that:

• the Bank should work to improve country processes for planning, implementing, and monitoring public actions geared toward poverty reduction
• the Bank should create a more candid, transparent, and comprehensive review process to help countries with the PRS process
• the Bank should help countries address key analytical gaps about the poverty impact of policies and programs
• the Bank should work with external donors and recipient governments to make PRSPs a partnership framework.