Illusions and disillusions with pro-poor growth: Poverty reduction strategies in Bolivia, Honduras and Nicaragua

The Poverty Reduction Strategy (PRSP) Framework was introduced in 1999 creating great expectations for the Heavily Indebted Poor Countries, HIPCS. It was not only visualized as a framework to use in order to pair debt relief with poverty reduction, but also regarded as an opportunity to introduce a participatory process that would tailor the strategy to the country's needs, assuring ownership and long term viability. Improved budgeting procedures would guarantee transparency and accountability in the policy process, allowing a more efficient allocation of development cooperation funding. This report compares experience of the PRSP process in Bolivia, Honduras and Nicaragua in 2003 and 2004. This experience of implementing poverty reduction strategies plus elements of uncertainty and continuous changes of plans make it extremely difficult to evaluate PRSP in terms of their outcomes. For now, all that is possible is to assess the process of strategy design and implementation. The report pays specific attention to how the strategies propose to achieve pro-poor growth and also raises questions as to what extent the PRSP will effectively redirect the economic growth process to the greater benefit of the poor. The analysis suggest this is no trivial matter as there is limited consensus as to what pro-poor growth... and what effective po-poor policies are.