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Contributions from
the Column
Studies and reports
Development driven by technology?
So far only a vague prospect
AIDS vaccine: no breakthrough
Interview with Michael Krakowski
Poverty reduction strategy papers:
donors still dominant
Sovereign debt restructuring:
IMF proposal does not go far enough
Fresh water
Foreign investment: democracies preferred?
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Poverty reduction strategy papers:
donors still dominant
To get debts remitted, the poorest debtor countries (Highly Indebted Poor Countries, HIPCs) have to draw up Poverty Reduction Strategy Papers (PRSPs) prepared with the broadest possible participation of civil society. The aim is to ensure that the money which is thus released does indeed go to help the poor. Michael Krakowski, senior economist with the Hamburg Institute of International Economics (HWWA), evaluated for BMZ and GTZ the PRSPs of Bolivia, Honduras and Nicaragua.
Mr Krakowski, you write that the PRSPs which you studied do only in parts present a shared communal vision. What are their shortcomings?
The participation of civil society is only moderately successful. Whats more, the PRSPs of Nicaragua, Honduras and Bolivia were all completed shortly before a change of government. If they had presented the shared communal vision that was required, they should not have been modified by the succeeding governments. In all three countries, however, the new governments announced they would make changes, at least to parts of the papers.
How can greater participation by civil society actors be achieved?
The problem is that most Latin American countries are fraught with relatively serious social conflict. On the one hand, this makes conditions for civil society participation difficult. On the other, I think the PRSP process can help pacify society, although it will require some considerable patience.
At the present time, the donors are still dominant, since PRSPs only came into being at their instigation. No country would have produced a PRSP if it wasnt a requirement for debt relief. I am confident, however, that civil society participation can be increased and that the influence of the donors will then diminish.
Do the papers which you studied contain promising strategies for reducing poverty?
The biggest shortcoming of all three papers is that too little attention is paid to growth. Without sustainable economic growth, poverty reduction is not possible. The PRSPs deal in detail – and rightly so – with the role of the state in areas like education and health. But the papers make far too optimistic assumptions about economic growth in the years ahead and fail to identify strategies by which those optimistic growth rates could be achieved.
You also complain in your reports that it is not clear how economic growth can be made to have a greater impact on poverty reduction.
Thats right. Growth is a necessary but not a sufficient condition for reducing poverty. Its impact on poverty needs to be maximised by identifying appropriate growth paths. The buzzword here is pro-poor growth.
What contribution can the donors make to help strategy papers succeed?
Firstly, they should reduce the usual conditionalities for cooperation. After all, its the PRSPs that now set the framework conditions. Secondly, the donor community as a whole needs to gear its policies more closely to PRSPs; there needs to be more multi-donor programmes and budget support. Progress is being made in this direction – in German development cooperation as well – but it needs to be faster than at present.
Questions by Tillmann Elliesen.
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