A new approach to public policy for poverty reduction has been gaining ground in highly-indebted poor countries across the world. Officials and politicians are engaging in dialogue with citizens’ organisations, pressure groups and think tanks within their countries about issues that used to be only discussed with external donors and financial institutions. One of the products of this process is a new kind of government policy statement called a Poverty Reduction Strategy Paper (PRSP).

The adoption of PRSPs is the result of new thinking at the World Bank and the International Monetary Fund since September 1999. The PRSP concept emphasises increased national “ownership” of poverty-reduction efforts, and sees this as a key precondition for greater effectiveness and better results. The belief is that Bank and Fund conditionalities can be adjusted so that they stop undermining and start to strengthen national commitment to pro-poor policies.

It is too early to tell whether the bold gamble that the PRSP initiative is will actually work. But it is unquestionably a new idea, which will have major implications, for better or worse, in many countries. It is also an example of new policy thinking being adopted at the highest levels as a result of a build-up of opinion influenced by research.

Some things about the genesis of the PRSP idea are clear, while others remain obscure. Key processes include:

• The accumulation of research findings and other evidence on the importance of weak “ownership” in explaining the failure of policies promoted by the Bank/Fund and donors.
• Important shifts in leadership thinking in the Washington-based institutions, as expressed in Wolfensohn’s Comprehensive Development Framework initiative among others.
• NGO-led campaigns for multilateral debt relief (Jubilee 2000, etc), the evolution of UK government (DFID and Treasury) positions and international influence on debt reduction, and the interactions between these two.
• Specific technical inputs to operationalising the commitment of the G8 ministers to linking debt relief and poverty reduction, leading to the articulation of the PRSP formula in September 1999.

It seems clear that important steps were taken, translating a generally favourable climate of opinion into specific commitments and policy ideas in the course of 1999. That year began with public discussion of the CDF, included the adoption of the Enhanced HIPC framework by the G8 in the spring and ended with the first efforts towards the preparation of Interim-PRSPs. What happened in between? Who influenced whom, on what and how? What was the specific contribution of research-based knowledge, and what conditions enabled this influence to be exercised in such a striking way?

The case study will draw mainly on prepared interviews with key actors, based in Washington and London, designed to clarify linkages and disentangle the web of mutual influence. Most of the key actors are known. They include UK government officials, Bank and Fund staff, representatives of UK-based international NGOs and researchers in NGOs and academic institutions, including ODI.

Key Researchers:
Karin Christiansen, Research Officer, Poverty and Public Policy Group
Tim Conway, Research Fellow, Poverty and Public Policy Group

Further Information:
A summary of the case study report
The full Working Paper (Adobe Pdf 450kb)