PRSPs were established in 1999 by the World Bank and IMF as a response to the shortcomings of their earlier development approach centered on “structural adjustment”—an approach that made lending contingent on adoption of certain macroeconomic policies that would change the nation’s basic economic structure and prime it for growth. Unfortunately, in many countries following the structural adjustment approach, the promised growth either did not appear or did not result in sufficient poverty alleviation. In fact, in many cases, the approach exacerbated existing inequalities, creating a “crisis of legitimacy” surrounding the lending approach of major development institutions by the mid-1990s (Reed 2004:7).
The intent behind PRSPs was to replace the approach in which the World Bank and IMF attempted to mold a nation’s development policies along fixed lines as a condition for lending. Instead, the PRSP approach would let countries decide for themselves which development policies to pursue, so long as the policies were aimed at achieving significant, broad-based reductions in poverty and also emphasized governance reforms, including increased transparency and accountability of government decision-making (Oksanen and Mersmann 2003:126).
Six years after their adoption by the World Bank and IMF, PRSPs are now in transition from the preparation stage to implementation. About 70 countries are expected to eventually prepare PRSPs (Levinsohn 2003:2); as of 2004, 53 PRSPs had been produced, including 39 full PRSPs and 14 preliminary versions (Bojö et al. 2004:5). Besides heavily indebted and aid-dependent countries, other countries have also chosen to prepare PRSPs, including many Central European countries as well as middle-income countries like Brazil (Driscoll and Evans 2004a:3).
PRSPs are becoming increasingly important in shaping the planning, policy, and budget priorities of developing countries, as well as in directing the aid flows from richer countries. The PRSP process is credited with focusing the attention of governments and donor agencies on poverty reduction as a central, priority concern rather than a special, marginal activity (Driscoll and Evans 2004b:3). In addition, PRSPs represent a more “upstream” approach to development aid, that is, an approach that redirects donor assistance from specific, discrete projects towards integrated support for sector-wide plans and even general budget support. Already, in eight African countries, up to one-fifth of aid flow is now for general budget support (Chiche and Hervio 2004 in Driscoll and Evans 2004b:5). PRSPs are also intended to draw increased attention to the non-income dimensions of poverty, such as empowerment of poor and marginalized communities, as well as addressing gender disparities (Levinsohn 2003:3).
