OWNERSHIP AND POLICY SPACE IN POVERTY REDUCTION STRATEGY PAPERS (PRSP)

Meg Elkins Simon Feeny, RMIT University

DSA/EADI Conference 2011, York

Rethinking Development in an Age of Scarcity and Uncertainty

Outline of the presentation

• Background• Purpose and scope• Previous literature and contribution• Methodology• Results• Conclusion• Limitations and further research

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Background PRSPs• PRSPs Guiding principles

• Country-driven and owned; results orientated; comprehensive in scope; partnership orientated; medium and long-term in focus.

Ownership• Ownership and partnership are co-dependent principles• An evolving discourse should have a degree of policy diversity with

a country-specific focus.

Policy Space • Contentious in PRSP literature• Claims of limited policy space in the macroeconomic policies

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Purpose and Scope• This study represents a systematic and comprehensive

evaluation of 81 PRSPs 2000-2008 in terms of macroeconomic content.

• This research develops three development paradigm indices : Washington Consensus(WC); Post-Washington Consensus (PWC) and New York Consensus (NYC). Indices capture the degree of alignment of PRSPs to these paradigms

• Contribution:• Systematic and comprehensive review of PRSP content 81

PRSPs 58 countries 2000-2008 • Greater number of PRSPs and countries than previously

undertaken • Scorecard analysis: alignment indices created for three

development paradigms

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Literature Review

• Previous studies find that the Washington Consensus is the dominant paradigm in PRSPs

• FDI deregulation, trade and capital account liberalisation represent missing content in PRSPs. Strict monetary and fiscal policy and privatisation are ‘rarely absent (Sumner 2006)

• Few mechanisms to counteract macroeconomic volatility (Gottschalk, 2005)

• The similarity of the programmes to those that form part of the normal international agenda suggests PRSPs are just window dressing (Stewart & Wang, 2003)

• PRSPs demonstrate commitment MDGS via social investment in health, education and water. Empowerment, vulnerability and gender issues are given lower levels of attention (Fukuda-Parr, 2010)

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Methodology• Collated data from 81 PRSP documents• 72 policy options examined across three contemporary

paradigms• Created a scorecard system demonstrating a degree of

PRSP alignment of each policy.• Policies given a score of 0,1,2,3• Scorecard systems created the index• The normalised index measures the degree that a PRSP

is aligned to the three different paradigm• Cross-tabulation analysis to determine characteristics with

higher degree of alignment

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Washington Consensus – Williamson (1990)

• Fiscal discipline• Re-orientation of fiscal expenditures• Tax reform• Financial liberalisation/interest rate liberalisation• Unified and competitive exchange rate• Trade liberalisation• Openness to foreign direct investment• Privatisation• Deregulation• Secure property rights

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Post-Washington Consensus – Rodrik (2006)

• Corporate governance• Anti-corruption measures• Flexible labour markets• WTO agreements• Financial codes and standards• Prudent capital account opening• Non-intermediate exchange rate• Independent central banks• Social safety nets• Targeted poverty reduction

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New York Consensus: UNDPs Millennium Development Project and Fukuda-Parr (2010)

• Infrastructure capacity – capital expenditure• Rural development- agricultural productivity and management• Education – provisions• Health – child and maternal mortality, control for diseases• Governance – rule of law and anti-corruption measures• Employment – public works, decent work programmes• Water and sanitation – infrastructure and management• Gender equality and empowerment – representation and land

entitlement• Environment – biodiversity, urban dwellings, resource protection• Science and Technology – research and development, higher

education

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Paradigm Index Averages

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NYC: 0.644 WC: 0.638

PWC: 0. 510

WC policy Adoption scoresScoring Tallies Across PRSPs 2000-09 (Strength of Adoption) - WC Policies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Macro-Economic Policies

Ad

op

tio

n S

core Score 0

Score 1

Score 2

Score 3

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PWC Policy Adoption ScoresScoring Tallies Across PRSPs 2000-09 (Strength of Adoption) - PWC Policies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Macro-Economic Policies

Ad

op

tio

n S

core Score 0

Score 1

Score 2

Score 3

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NYC Policy Adoption Scores

Cross-Tabulations for WC Index Scores and Region

Sub-Saharann=44

Europe & Central Asia n=13

Latin American & Caribbean n=7

South Asia n=7

East Asia and Pacific n=8

Middle and North Africa n=2

Low WC score <.659

68.18 %

30.77%

28.57% 28.57 %

25.00% 100.0 %

High WC score>.659

31.82 % 69.23 %

71.43 % 71.43%

75.00% 0.000%

14

Pearson chi2(5) = 14.2211 Pr = 0.014

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Cross-Tabulations for WC Index Scores and Income

  Low Income (GDP per capita <US$1,500)*

High Income (GDP per capita <US$1,500)*

Number of PRSPs

Low

WC score < .659

73.81 % 29.73% 42

High WC score >.659

29.55 % 70.27% 39

Total 100.00% 100.00% 81

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Pearson chi2(1) = 13.3519 Pr = 0.000 *GDP per capita, with purchasing power parity in constant international dollars in 2005

Cross-Tabulations for PWC Index Scores and Region

Post -Washington ConsensusScore

Sub-Saharan (n=44)

Europe & Central Asia (n=13)

Latin American & Caribbean (n= 7)

South Asia (n=7)

East Asia and Pacific (n=8)

Middle and North Africa (n=2)

Low PWC index

65.91%

7.69 %

57.14%

33.33%

25.00%

100.00%

High PWC index

34.09 %

92.31%

42.86% 66.67%

75.00%

0.000%

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Pearson chi2(5) = 19.1814 Pr = 0.002

Cross-Tabulations for PWC Index Scores and Income

  Low Income <$US1,500(GDP per capita)*

High Income >$US1,500 (GDP per capita)*

Number of PRSPs

Low PWC score< . 5101

61.36.% 35.14% 40

High PWC score>.5101

38.64% 64.86% 41

Total 100.00% 100.00% 81

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Pearson chi (2) = 5.5315 Pr = 0.019*GDP per capita, with purchasing power parity in constant international dollars in 2005

Cross-Tabulations for NYC Index Score and Timing

  Before 2004

After 2004

Number of PRSPs

Low NYC score < .643

64.44 % 22.22% 37

High NYC score>.643

35.56% 77.78% 44

Total 100.00% 100.00% 81

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Pearson chi2(1) = 14.3690 Pr = 0.000

Conclusion• Dominance of WC content is not consistent with the

findings of this study• There is a rise of NYC as a more influential paradigm• Regional and income levels influence WC and PWC

alignment• Timing is an influence in NYC alignment• Scope for policy space in PRSPs

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Limitations and Future Research• Current investigation is only into content analysis. • Future investigations would need to:• 1) Indicate whether a strong index ranking translates into

tangible impact on poverty and human development.• 2)Undertake regression analysis to explains policy

adoption in PRSP across countries and identify common patterns.

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PRSP Investigated: Regions, Countries and Years04/10/23 21

Europe & Central AsiaLatin America & Caribbean

Middle East & North Africa East Asia & Pacific South Asia Sub-Saharan Africa

Albania 2001 Bolivia 2001 Yemen 2002 Cambodia 2002 Sri Lanka 2002 Burkina Faso 2000 Lesotho 2005

Kyrgyz Republic 2002 Honduras 2001 Djibouti 2004 Timor Leste 2002 Nepal 2003 Mauritania 2000 Nigeria 2005

Tajikistan 2002 Nicaragua 2001 Afghanistan 2008 Mongolia 2003 Pakistan 2003 Tanzania 2000Sao Tome & Principe 2005

Armenia 2003 Guyana 2002 Vietnam 2003 Bhutan 2004 Uganda 2000 Sierra Leone 2005

Azerbaijan 2003 Nicaragua 2005 Lao 2004 Bangladesh 2005 Mozambique 2001 Tanzania 2005

Georgia 2003 Dominica 2006 Cambodia 2005 Maldives 2008 Benin 2002 Uganda 2005

Bosnia-Herzegovina 2004 Haiti 2008 Vietnam 2006 Ethiopia 2002 Burundi 2006

Moldova 2004 Lao 2008 Gambia 2002 Malawi 2006

Serbia Montenegro 2004 Guinea 2002 Mauritania 2006

Albania 2008 Malawi 2002 Mozambique 2006

Armenia 2008 Rwanda 2002 Zambia 2006

Moldova 2008Sao Tome & Principe 2002 Congo DR 2007

Uzbekistan 2008 Senegal 2002 Gambia 2007

Zambia 2002 Guinea 2007

Cameroon 2003 Madagascar 2007

Chad 2003 Senegal 2007

Ghana 2003 Benin 2008

Madagascar 2003 Cape Verde 2008

Burkina Faso 2004 Liberia 2008

Cape Verde 2004 Niger 2008

Kenya 2004 Rwanda 2008

Ghana 2005