Where PRSP efficient ?

img-8Since the 2000s, a few African countries have committed to strategies, initiated by the World Bank and then extended to the Millennium Development Goals (MDGs), to fight against poverty. These strategies, compiled in what are generally called Poverty Reduction Strategic Papers (PRSPs), are based on the dogma which considers that growth is enough to reduce poverty. Therefore, they highlight growth acceleration and identify measures to be implemented to improve the living conditions of the poorest.

Discussing the efficiency of these programs, with the birth of MDGs, the Bretton Woods institutions, in particular the IMF, indicated that these strategies constitute a break from other existing development programs, and offer a pool of measures which probably be able to reduce poverty. Although the MDGs have reached their completion point and data is available, it is possible to wonder whether these strategies have had the expected results. A tentative answer is given by Daouda Sembene[i], who analyses the impact of PRSP on growth, inequities and poverty in Sub-Saharan African countries. His analysis compares countries having adopted PRSP and countries which haven’t.

In his analysis, it appears that although the implementation of PRSPs has allowed a significant reduction of poverty elsewhere in the word, in the Sub-Saharan African countries which have adopted them (32 in total), it remains difficult to identify its impact on poverty and inequalities. Indeed, poverty is increasing at almost the same speed in all countries of the region, whether or not they have adopted PRSPs. The good news is that DSRPs have allowed countries which have adopted them to be more efficient and more resilient to economic shocks. For instance, the PRSPs countries recorded far more stable and substantial growth rates since the implementation of PRSPs (with an average of 2.13% during the 1990-1999 period against 5.12% between 2000 and 2012). On the contrary, economies which had not adopted the PRSPs have had more erratic performances (from 7.1% on average between 1990 and 1999, to 5.3% between 2000 and 2012). In addition, the 2008 financial and economic crisis had less impact on PRSPs counties than on non-PRSP countries: average growth of – 1.9% in 2009 for non PRSPs, when PRSPs countries demonstrated an average growth of 4%.

According to PRSPs, only public action can generate sustainable growth, able to reduce poverty. The actions to be implemented in the context of PSRPs in the concerned Sub-Saharan African countries were therefore in favour of growth. They involved in particular infrastructures and human capital (health and education), diversification and private sector development but also some transversal issues such as good governance promotion and rural development. For the growth created through these measures to be able to reduce poverty and inequalities, it was thus necessary to strengthen the redistribution channels. To attain this, the PSRPs planned to improve access to basic social services, to employment or to revenue-generating activities. Fund transfers and a priority access to public jobs for poor people, also constituted fundamental pillars of these strategy papers.

The failure of these strategies to reduce poverty and inequalities is mainly linked to the redistribution strategy used. For instance, social transfer programs are usually not conditional on results to be reached by the beneficiary household, in terms of health and education for the children. According to Kakwani and al. (2005) [1], in about 15 Sub-Saharan African countries, the implemented transfer programs depended on the registration and regular school attendance, and the amounts involved were not sufficient to take the beneficiaries out of their situation of poverty. Another form of redistribution is the implementation of subsidies (either in the agricultural, energy, or food sectors). It is the most common form of redistribution used on the continent; each African country benefits from subventions in one or more of those sectors: Nigeria and Ghana for instance have implemented subsidies in the agricultural and energy sectors. Others are more focused on the agricultural sector (Tanzania) or the energy sector (Niger, Senegal and Mali). These subsidies, supposed to be beneficial for the poorest and which mobilize a non-negligible part of budgetary resources, do not really produce the expected results [2]. They benefit mostly the richest, who consume an important part of the subsidized products and services.

Overall, the implementation of PSRPs has particularly allowed to improve economic governance in the countries which have adopted them, which translated into improved economic performances and a strong resilience to exogenous shocks. Regarding poverty and inequalities, these strategies have been less efficient. A failure which could be linked to the design strategy of PSRPs. Indeed, if the way PSRPs are designed, they provide conditions to reduce poverty with a focus on growth, their implementation is made difficult by the institutional capacity of the countries to identify precisely the targets of those policies. Policies aimed at reducing poverty and inequalities should not only take more into account local realities, but also integrate measures to be appropriated by local authorities, in order to design redistributive policies more adapted to the local context, and whose implementation would be linked to institutional capacities and competencies of the country. It is an approach that countries already try to have within their own development programs, which are then submitted to their partners for funding. Regional programs, or those initiated by international institutions, should therefore be reshaped according to a same model, to strengthen redistributive mechanisms. 

An original article by Foly Ananou, translated by M.C. 

[1] Kakwani, Nanak, Fábio V. Soares, and Hyun H. Son (2005). Conditional Cash Transfers in African Countries. UNPD International Poverty Centre, Working Paper n° 9, Brasilia.

[2] See Faut-il supprimer les subventions à l’énergie en Afrique ? for the case of energy.

[i] Daouda Sembene (2015). Poverty Growth and Inequality in Sub-Saharan Africa : Did the Walk Match the Talk under the PRSP Approach ? IMF Working Paper, WP/15/122.