Public Financial Management for PRSP - Deutsches Institut für ...

Public Financial Management for PRSP Implementation in Malawi
largely incorporated the elements of the Comprehensive Development Framework
(CDF) proposed by the World Bank in 2001. These principles are:
— Country driven;
— Results-oriented;
— Comprehensive;
— Partnership-oriented; and
— medium and long-term oriented (World Bank 2006b).
The principles of country ownership and civil society participation received
particular attention as they – at least rhetorically – put an end to the long
criticised externally defined conditionalities. By June 2006, fifty countries
had developed a full PRSP and an additional 13 an interim PRSP, with sub-
Saharan African countries accounting for 25 full and seven interim-PRSPs
respectively (World Bank 2006a).
First developed as an instrument to effectively direct resources freed up by
debt relief to pro-poor purposes, PRSPs quickly assumed much broader importance
evolving into key reference documents for donor agencies’ support
strategies for developing countries. Perhaps most prominently, the IMF replaced
its Enhanced Structural Adjustment Facility (ESAF) with a Poverty
Reduction Growth Facility (PRGF) and the World Bank introduced the Poverty
Reduction Support Credit (PRSC) scheme. But also bi-lateral donors
readily endorsed the PRSP approach as a vehicle to shift their support from a
project-based approach to programme-based approaches (PBAs) and budget
support operations.
The PRSP thus became the ‘master plan’ for development and poverty reduction
in many developing countries. However, to carry out these strategic
plans they have to be translated into medium-term policies and programmes,
which in turn have to be implemented through annual budgets. Successful
PRSP implementation thus hinges on a country’s administrative and managerial
capacity to effectively translate strategic priorities into annual budgets
and execute them accordingly, in other words, on the quality of the country’s
PFM system. However, a number of assessments and evaluations of the
PRSP approach (e.g. World Bank 2004b; IMF/IEO 2004; Booth 2003) clearly
show that most developing countries lack the required systems and capacities
to implement their strategy papers effectively. All studies conclude that important
improvements in domestic policy processes were made in cases where
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