Poverty Reduction Strategy Paper - Criticism and Challenges

Criticism and Challenges

Even with an approved PRSP, some countries have difficulty following through with intended policies and therefore do not reach the PRS outcomes. A large factor of this is the misallocation of budgetary funds that were intended to go towards the PRS.

The PRSP process has been scrutinized for increasing aid conditionality even though it was supposedly created to undo the imposition of policy conditions from the outside by increase country ownership. Some have argued that it is a "process conditionality" not a "content conditionality". This differentiation is important because it means donors are only monitoring if the country has made a PRSP and if it was made in a participitory way. However, this might still pose a problem. Since in the past donors were unable to impose content effectively in the client country's policies, it seems unlikely that donors would be able to impose process standards in making a PRSP. It has already been shown that donor's attempts to influence domestic politics have not been successful in the past. Furthermore, international financial institutions do in fact evaluate PRSP content, not process alone.

A clear definition of what civil participation means has not been laid out by the IMF or World Bank. This creates a problem when evaluating one of the key requirements of the PRSP, which is that it has to be formulated with civil participation. In fact, participation that involves the population working with the government to develop specific strategies to reduce poverty doesn't exist in any developing country. This seems to suggest that the WB and IMF approve PRSPs regardless of the fulfillment of this condition.