• Poverty and PRSPs

Poverty and PRSPs

This paper compiles reports from 12 countries being tracked by the World Bank for their progress towards achieving the Comprehensive Development Framework. It focuses especially on the promising trends within these countries of external partners beginning to align their support (strategies, instruments, capacity development, policies and procedures) with Poverty Reduction Strategies (PRSPs) under Government leadership. All 12 countries have been implementing a PRSP for at least a year.

Lessons learnt from tracking the 12 countries this far include:

• PRSP create the opportunity for external partners to anchor their support in a country's development objectives and priorities, to base it on a consistent set of results indicators, and to adapt it to country planning and budgeting cycles. But, early experience indicates that strategic policy alignment is not an automatic process; it requires special focus and actions at all levels, including appropriate institutional arrangements and policies.
• The PRSP process has increased the frequency of coordination activities, which sometimes increases short-term transactions costs. However, these activities are helping build open and transparent dialogue on goal setting, resource allocation and outcomes monitoring.
• Programmatic support is increasing, providing greater predictability and availability of external support. Projects, however, continue to play a role in the implementation of countries development strategies, particularly where internal reforms are moving more slowly.
• Policy formulation and implementation capacity is limited in most countries preparing or implementing PRSPs, reflecting a mixed track record of external support for capacity development.
• A set of good practice standards, principles, and products for harmonizing operational policies, procedures, and practices has been developed by the multilateral development banks and the Development Assistance Committee of the Organization for Economic Co-operation and Development.

Despite progress and evolving promising alignment practices, significant challenges remain for governments and external partners. These challenges are listed in the paper.

The paper served as a background document for the High Level Forum on Harmonization, February 2003.

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