Poverty Reduction Strategy Paper

Poverty Reduction Strategy Papers (PRSPs) are documents required by the International Monetary Fund (IMF) and World Bank before a country can be considered for debt relief within the Heavily Indebted Poor Countries (HIPC) initiative. PRSPs are also required before low-income countries can receive aid from most major donors and lenders. The IMF specifies that the PRSP should be formulated according to five core principles. The PRSP should be country-driven, result-oriented, comprehensive, partnership-oriented, and based on a long-term perspective. The PRS process encourages countries to develop a more poverty-focused government and to own their own strategies through developing the plan in close consultation with the population. A comprehensive poverty analysis and wide-ranging participation are vital parts of the PRSP formulation process. There are many challenges to PRS effectiveness, such as state capacity to carry out the established strategy. Criticism of PRSP include aid conditionality, donor influence, and poor fulfillment of the participatory aspect.

The World Bank and IMF require countries to produce a Poverty Reduction Strategy Paper as a condition for debt relief through the HIPC initiative and other monetary aid, as do several bilateral donors. PRSPs are intended to help aid recipient countries meet the Millennium Development Goals (MDGs). They detail a country's plan to promote growth and reduce poverty through implementation of specific economic, social and structural policies over a period of three years or longer. PRSPs provide lending organizations, like the World Bank and the IMF, assurance that aid receiving countries will utilize aid to pursue development outcomes that have been elaborated in the PRSPs and approved by lenders.

The IMF has outlined five core principles for the process through which PRSPs are elaborated. First, it should be country-driven, meaning that country ownership of the strategy should be culminated through broad-based participation of civil society. It should also be result-oriented by focusing on outcomes that will benefit the poor, comprehensive in exploring and understanding the multidimensional nature of poverty, partnership-oriented by involving development partners such as the government, domestic stakeholders, and external donors. Lastly, the development of the PRSP should be based on a long-term perspective geared towards reducing poverty. These core principles are central to the goals of the PRS process.

...
Wikipedia