Linking the PRS with national budgets: a guidance note

This article gives practical guidance to developing country practitioners and international donors working on low income countries. The article stresses the importance of linking Poverty Reduction Strategy (PRS) and a country’s national budget, whether at the formulation, execution, or reporting stage. It says that linking the budget and the poverty reduction strategy is integral to the successful implementation of the PRS and vital for strengthening government accountability. The article highlights three benefits which emerge when the two systems are well integrated, which are:

• PRS priorities are more likely to be implemented as planned
• spending agencies can be held to better account for performance
• parliament can have an increased role in monitoring PRS outcomes

Despite these benefits, low-income countries face significant challenges in trying to better link planning and budgeting initiatives. These include fragmented institutional ownership and weak incentives, which have limited the ability of policymakers to link planning and budgeting processes. The article stresses on addressing these issues before linking the two systems, which would result in overcoming the challenges arising from translating poverty reduction strategies, into improved development outcomes.