An appraisal of the Poverty Reduction Strategy (PRS) Initiative

  • Richard Marshall

Student thesis: Phd


In late 1999, the World Bank and International Monetary Fund (IMF) jointly launched the Poverty Reduction Strategy (PRS) Initiative, under which low income countries (LICs) would be supported to develop multi-sectoral economic and social development plans. As such, these national PRSs would serve as the effective policy conditionality for concessional lending and the allocation of debt relief. Heralded by many as path breaking, the Initiative refocused attention on the role of the State and identified poverty reduction, as opposed to growth alone, as the primary goal of policy. However, from the outset, PRSs have been controversial. The most trenchant critics have described these plans as merely re-formulated structural adjustment packages. Other, more considered accounts, have questioned whether PRSs' are capable of overcoming the agency problems inherent to donor-recipient relationships, and their ability to succeed in the weak policy environment typified by most LICs.In spite of the passage of some ten years, a rigorous evaluation of performance has yet to be published. This thesis aims to provide such an appraisal drawing on both quantitative and qualitative evidence. It employs cross-sectional statistical and econometric methods to examine poverty, growth and inequality outcomes based on a specially constructed dataset; and two detailed analytical case studies (for Mongolia and Vietnam) to probe the causal processes.Although some aggregate evidence is found of performance gains (relating to both poverty reduction and growth), these effects are partial and statistically fragile. Moreover, while no direct evidence is found of dis-inflationary policy biases, it is possible to detect a new narrowness within PRS policymaking. This reflects an orthodox policy consensus which favours growth over distributional improvements and places emphasis on a managed liberalization process. Additionally, it proved very difficult to find a causal link been PRS adoption and beneficial outcomes. The case study materials underline the pivotal role played by the IFIs in the design and management of PRSs, and their transitory and limited impact on actual national policy responses. Conclusions support many of the propositions put by the critical literature, and find that PRSs are poorly adapted to local institutional frameworks and neglect national political economies. As a result, their substance and longer term effectiveness is in doubt.
Date of Award31 Dec 2010
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorBernard Walters (Supervisor) & Frederick Nixson (Supervisor)


  • Inequality
  • Policy
  • Economic growth

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