1. 2005 PRS Review Balancing Accountabilities and Scaling Up Results
The World Bank

2. Presentation Overview: PRS Approach Balancing Accountabilities
Scaling Up Results
Overview Balancing Accountabilities Scaling Up Results

3. PRS snapshot Introduced in late 1999
Intended a fundamental shift in relationship
49 countries ( )
About half in sub-Saharan Africa
About half HIPC
Average implementation, 2 ½ years
3 countries have fully revised strategies
Overview Balancing Accountabilities Scaling Up Results

4. Key PRS pillars
Poverty Reduction Strategy
Results-oriented
Long-term perspective
Country-driven
Comprehensive
Partnerships
Country driven: Country ownership, broad-based participation
What do they really mean and why are they important ?
Overview Balancing Accountabilities Scaling Up Results

5. Mutual accountability
PRSP
Domestic Constituents
External Actors
Institution and capacity building agenda
Analytic Underpinnings
Participation
more aid
predictable
harmonized
aligned
Government
Polices,
Programs,
Public actions
Poverty- and results-oriented
Well-implemented
(Trade)
Overview Balancing Accountabilities Scaling Up Results

6. Domestic accountability
PRSP
Domestic Constituents
External Actors
Analytic Underpinnings
more aid
predictable
harmonized
aligned
Institution and capacity building agenda
effective monitoring
institutionalized
participation:
who, when,
how, what
links to
budgets
Government
Polices,
Programs,
Public actions
Poverty- and results-oriented
Well-implemented
--- various elements in circles
--- broaden out the institution and capacity building agenda
--- demand for and supply of domestic accountability
Overview Balancing Accountabilities Scaling Up Results

7. Some factors that can tilt the balance
PRSP
Domestic Constituents
External Actors
Analytic Underpinnings
more aid
predictable
harmonized
aligned
Institution and capacity building agenda
Lack of prioritization and specificity
Limits on policy space
Volume and modalities of assistance
Conditionality
institutionalized
participation:
who, when,
how, what
effective monitoring
links to
budgets
Government
Polices,
Programs,
Public actions
Poverty- and results-oriented
Well-implemented
A key finding of the review is that over the past five years the PRS process has played out in many countries in a way that emphasizes the second set of accountabilities (to external partners) at the expense of the first set (accountability to domestic constituents).
The review finds four important reasons for this, not all applicable to all countries, of course:
PRSs that are not prioritized or specific lack operational detail and can make it difficult to achieve donor alignment with domestic priorities
In the past, conditionality has often emphasized commitments to donors rather than consistency with the government’s policy program as agreed domestically. There can, however, be a useful role for conditionality as long as it reinforces the government’s program.
The amount of aid and how it is provided can distort incentives. When aid levels are high (as in much of SSA), it can promote a focus on those who provide aid. This can be worsened if aid if provided in ways that are off budget or are managed through donor procedures rather than country systems.
The set of policies within which governments can make choices in response to domestic politics can be constrained by such factors as the legacy of the HIPC initiative (which in some cases overemphasized social spending as a way of reducing poverty), and the influence of donors in their attempts to fill analytic gaps.
Overview Balancing Accountabilities Scaling Up Results

8. (Re-) Balancing accountabilities
PRSP
Domestic Constituents
External Actors
Analytic Underpinnings
Government
Polices,
Programs,
Public actions
Poverty- and results-oriented
Well-implemented
more aid
predictable
harmonized
aligned
Institution and capacity building agenda
effective monitoring
institutionalized
participation:
who, when,
how, what
Aid modalities that support
domestic accountability
Greater prioritization and specificity
links to
budgets
The key conclusion of the review, therefore, is that in order to enhance the effectiveness of the country-based PRS approach, there needs to be more attention to supporting a balance in the accountability of governments towards their domestic constituents for improved policies, governance and development results. Donors (including the Bank and Fund) will need to support this rebalancing by providing more aid in forms that are more aligned with countries’ programs and priorities, more flexible and more predictable. These changes will also enable the PRS approach to be more effective as a platform for scaling up aid as well as in accelerating the pace of countries’ progress towards medium-term development goals such as the MDGs.
While actions are required on all sides, governments in particular will need to focus on three specific aspects that can strengthen domestic accountability: strengthening the links of PRS processes to budgets and medium-term expenditure frameworks; putting in place more systematic monitoring of growth, poverty and distributional outcomes underpinned by robust analysis; and institutionalizing participation so as to foster an effective and broad-based national dialogue on growth and poverty reduction. This will allow PRSs to be more specific and prioritized and make it easier to hold donors accountable in aligning their assistance to countries’ priorities.
Overview Balancing Accountabilities Scaling Up Results

9. Linking PRS to budget processes
Why important?
Need to embed strategy in domestic institutions/processes… otherwise just a paper
Budget constraints encourage prioritization
What has happened so far?
Greater focus on public expenditure management
Evidence of improvements, esp in HIPCs (albeit from low base)
Initial focus: budget formulation ; now increased attention: budget execution and reporting
Continued attention:
Coordinated, sequenced, demand-driving support for capacity building
Political commitment and deep institutional reform
Overview Balancing Accountabilities Scaling Up Results

10. Strengthening monitoring systems
More focus on results highlighted lack of baseline data and robust monitoring systems
Some improvements in data coverage, quality, and access (more needed)
Real challenges
Building monitoring systems that coordinate the collection of data and its analysis.
Creating demand for evidence based decision making (using information in policy making).
Usually have range of monitoring mechanisms, often resulting from donor programs, lacking common framework.
Overview Balancing Accountabilities Scaling Up Results

11. Institutionalize participation
Who: neglected stakeholders, specialization
What: opening policy space
When: formulation/implementation
How: rules of the game, communications, invited space or entitled space
Aspire Engage Influence
Overview Balancing Accountabilities Scaling Up Results

12. Strengthening content, analytical foundations
Poverty analysis
Analysis of growth and the productive sectors
how the poor benefit from growth (e.g., jobs)
coherent sectoral strategies
Use of distributional analysis (PSIA) of key policy measures to inform policy design, choices, and sequencing.
Overview Balancing Accountabilities Scaling Up Results

13. Realism vs. ambition
PRSs need to be realistic to provide the basis for an operational framework to reduce poverty
But, countries may also have more ambitious medium- to long-term goals (such as the MDGs)
Using alternative scenarios could provide a link between realism and ambition. Elements could include:
Assumed financing (aid and domestic resource mobilization)
Actions to address absorptive constraints
Expected improvement in results
Overview Balancing Accountabilities Scaling Up Results

14. Scaling up (results)
Likelihood of substantial increases in aid flows provides scope for scaling up poverty reduction efforts
How to help use additional resources well:
Continuing process of improving quality/specificity of PRSs
Understanding and addressing absorptive constraints
Overview Balancing Accountabilities Scaling Up Results

15. Absorptive constraints
Indicative classification
Macroeconomic Debt sustainability
Dutch disease effects (currency spikes)
Human, physical capital Technical and managerial skills of public officials
Lack of adequate infrastructure and equipment
Institutional and policy Perverse incentives due to recruitment systems
Inadequate Public Expenditure Management
Social factors determining demand for services
Donor behavior Aid volatility
Uncoordinated donor behavior
Difficulties to shift to improved donor behavior
Short-term, long-term, sequencing, capacity building
Overview Balancing Accountabilities Scaling Up Results

16. Thank You www.worldbank.org/prspreview
Overview Balancing Accountabilities Scaling Up Results