The PRSP Approach and the Illusion of Improved Aid Effectiveness: Lessons from Bolivia, Honduras and Nicaragua


  • The article draws on fieldwork undertaken in 2003 and 2004 in the context of the ‘Evaluation and Monitoring of Poverty Reduction Strategies in Latin America, 2003–7′ study, which the Swedish International Development Agency (Sida) commissioned from the Institute of Social Studies in The Hague and for which the author has been contracted to investigate the role of the donors. Annual reports from this study can be downloaded from The author wishes to thank the members of the Centre for Public Governance of the Programme of Public Administration of Erasmus University, and in particular Patty Zandstra and Arthur Edwards, for helpful comments on an earlier version. This article was originally published in DPR 23 (4), July 2005, pp. 443–464, © The Author 2005.


Since 1999, poor countries that want to qualify for concessionary IMF loans and debt relief must elaborate and implement Poverty Reduction Strategy Papers. Donors claim that the PRSP approach will increase aid effectiveness since PRSPs will enhance broad country ownership and lead to better ‘partnership’ with donors, implying more donor co-ordination under government leadership. By examining the experiences of Bolivia, Honduras and Nicaragua, this article finds that the results are disappointing. The article also shows that, by emphasising rational planning and ignoring politics, the PRSP approach has unintended and sometimes harmful consequences. This leads to recommendations for changes of the approach.