The Effectiveness of IMF/World Bank-Funded Poverty Reduction Strategy Papers

Abstract

This chapter assesses whether the macroeconomic content of the Poverty Reduction Strategy Papers (PRSPs) supports the ultimate objectives of sustainable growth and poverty reduction or, instead, merely reflects typical macroeconomic policies embodied in IMF-based stabilization programmes. In particular, the chapter takes a dynamic perspective by making a distinction between first- and second-generation PRSPs and looks at how they have evolved over time. In doing so, it asks the questions: how much have they changed in response to feedback and criticism, and how much have they de-coupled from the traditional IMF type of stabilization programmes, and become more pro-poor, pro-growth? Finally, the chapter aims to contribute to our understanding of what forces shape the design and implementation of the macroeconomic policies contained in the PRSPs. It asks the questions: to what extent are PRSPs top-down, IMF driven, and to what extent is the design of their macroeconomic components mediated by actions from other actors thereby contributing to a more balanced design and implementation process? What are donor governments doing to ensure that the macroeconomic framework does not constrain aid spending? The ultimate aim is to shed light on how institutions, policies and politics interact with each other and how, through this process, each contributes to the shaping of poverty outcomes across developing countries.

I am very thankful to Yusuf Bangura for his very useful suggestions on how to explore the topic. The usual caveats apply.