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The World Bank's Poverty Reduction Strategy Paper Approach

Good Marketing or Good Policy?

Intergovernmental Group of Twenty-Four | November 1, 2002

By Jim Levinsohn, Gerald R. Ford School of Public Policy, Department of Economics, and William Davidson Institute, University of Michigan

From the Intro:In 1999, the World Bank and the International Monetary Fund (IMF) adopted a new set of processes to guide lending to some of the world's poorest countries. Amid the blizzard of acronyms explaining the new process, the Bank and the Fund laid out a process that very poor countries would need to follow if they wished to make use of various concessionary lending facilities. About two and a half years later, in the spring of 2002, the Bank and the Fund concluded a review of this new process. Contributors to this review included dozens of non-governmental organizations (NGOs) as well as the Bank and the Fund themselves. The Bank and the Fund, while acknowledging that the process could be improved, concluded that it worked pretty well based on the preliminary evidence so far available. The NGOs were, on the whole, less enthusiastic.

My read of the record is that neither the Bank and nor the outside commentators are asking the hard questions. The right question to ask is the following:

• Relative to what would have happened absent the adoption of the Poverty Reduction Strategy Paper (PRSP) process, has the implementation of the PRSP process yielded benefits that exceed its often considerable administrative costs?

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Read More: Finance, Poverty, Global

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